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Journalism of Courage
Switching to solar power may help to save the planet. Homeowners,however,arent so sure it will save them money. Energy costs may be lower than their existing electricity bills,but the initial expense of installing solar panels puts many people off.
Enter the city of Berkeley,California,which has just completed a pilot programme in which it lends homeowners the money to put panels on their houses. The owners repay the loans over a period of years through an extra charge on their local property-tax bills. The city raised the money to lend by issuing a Property Assessed Clean Energy PACE bond,a type of financing geared specifically to making properties more energy-efficient. In the past year 13 states have adopted legislation enabling municipalities and finance companies to issue PACE bonds. Another,Arizona,has a law pending. Berkeleys scheme is the only one so far directed exclusively at solar power.
Getting building permits was not always straightforward.
But supporters are undeterred. The bonds interest rate was so high in part because it was launched during the financial crisis,they say. The addition to the tax bill for the pilot programme,2,000-4,000 a year depending on the type of installation,is offset by savings on homeowners energy bills.
Bond investors can take comfort from the fact that tax obligations rank ahead of mortgage loans if homeowners get into financial difficulties. They also benefit from municipal bonds tax-exempt status. The state of California is considering expanding the programme by another 25m and taking it to surrounding counties. Renewable Funding,the investor in the Berkeley bond,says it is setting up similar agreements with other local governments.
