How to finance solar panels for homeowners

A promising initiative to promote renewable energy in homes has been started in Berkeley. The major barrier to installing solar panels is their large upfront cost and long payback period. Even if the savings are there in the long run, homeowners may not have the money upfront to buy solar panels, and they may not want to make a huge investment in a house that they could sell before the 20 years it might take to make their money back. Enter Berkeley FIRST which solves both problems by financing the costs with your property taxes:

Berkeley FIRST (Financing Initiative for Energy Efficiency Renewable and Solar Technology) allows property owners to install solar systems and make energy efficiency upgrades with no upfront cost.

Berkeley pays the upfront costs through the issuance of a new kind of municipal bond. The bonds are repaid from a new line item on participating property owners' property tax bills over 20 years. Participating property owners pay for only the costs of their energy project.

The program is 100% "opt-in" and property tax expenses remain unchanged for those who choose not to participate.

The result: solar and energy efficiency projects are paid for over a long period of time, in bi-annual installments. The interest rate is fixed. Property owners do not need to access their own capital or credit. And if the owner sells the property, the repayment obligation transfers along with the property itself.

(Via Gristmill.)