A new way to bring solar power to the people

This is very cool.

One of the major obstacles preventing many homeowners from installing solar panels on their roofs is, well, it’s expensive. At least in the short term. True, the panels may pay for themselves over the course of several years, especially if they reduce the amount of electricity you need to buy from the utility (or, much rarer, if you can sell excess power back to the grid). But the upfront costs can be formidable for many people.

Two years ago, however, the city of Berkeley figured out an easy financing trick to get around this problem—the city itself just issues a bond to pay for the upfront costs of installing the panels, and the homeowner then repays the government over the course of 20 years via a small line item on the property-tax bill. (This way, if the home is sold, the costs of the panels get passed on to the new owner getting the benefits.)

It’s a small policy tweak, but quite sensible. No mandates, no regulations, just offering homeowners an extra option if they choose. So it’s not surprising to hear that, as Kate Galbraith reports today, the idea’s been proliferating like crazy: This year alone, eight states have followed California’s lead by giving their municipalities permission for this sort of financing, including Colorado, New Mexico, Ohio, Oklahoma, Texas, Vermont, Virginia, Wisconsin. (Apparently, a lot of cities need permission from the states before they can mess with property-tax bills.)

Yes, Texas – HB1937, which passed the House by an 87-51 margin and the Senate 30-1. The text of the bill indicates that the state has given municipalities the authority to do this, the technical details of which are summarized here.

“Property tax financing” allows property owners to borrow money to pay for energy improvements. The amount borrowed is repaid through an increased property tax assessment over a period of years. Texas enacted legislation in May 2009 that authorizes municipalities to offer property tax financing for energy improvements. Contact your city or town to find out if financing is available for renewable energy and/or energy efficiency through special property tax assessments.

To participate, a municipality must develop a plan that includes the boundaries of the financing district, arrangements for financing the program, and the time and place for a public hearing regarding the proposed program. Municipal programs must specify the following:

  • Eligible renewable-energy systems and energy-efficient technologies;
  • A method for ranking requests from property owners for financing through contractual assessments if requests exceed the authorization amount;
  • Specification of whether the property owner may purchase the equipment directly or contract for the installation;
  • The maximum aggregate dollar amount of contractual assessments;
  • A map of the boundaries within which contractual assessments will be offered;
  • A draft contract specifying the terms to be agreed upon by the municipality and a property owner;
  • A method for ensuring that property owners who request financing have the financial ability to fulfill financial obligations; and
  • A plan for raising the capital required to pay for work performed, which could include amounts to be advanced by the municipality, the sale of bonds, any reserve funds, and the costs incidental to financing, administration, and collection of the contractual assessment program.

An assessment imposed, interest or penalties on the assessment constitute a lien against the lot until the assessment, interest or penalty is paid.

The law doesn’t take effect till September, and it’s not at all clear to me how one would go about pursuing this. I’m not even sure who in, say, the city of Houston one would contact to inquire about it. I may ask around and see what I can learn. In the meantime, if you have any knowledge of how this would work, please leave a comment. Thanks to Kevin Drum for the link.

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9 Responses to A new way to bring solar power to the people

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  3. Craig says:

    The only downside to this is if the state or the federal gov starts a REC program. The municpality keeps the REC’s.


    The local town is responsible for fixing and maintainence – good luck with that ! On Long Island it took 10 years to get a system repaired.


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