San Diego County Adopts New Solar Financing Option for Homes
Good news for residents of San Diego County: a new program will soonmake it easier to finance the installation of a solar photovoltaic (PV)system. The Financing Initiative for Renewable and Solar Technology(FIRST) program will permit homeowners to borrow money from themunicipal government to install solar panels, then will allow them torepay the funds over 20 years through an annual surcharge on theirproperty tax bill. More generally, the approach is called PropertyAssessed Clean Energy (PACE) financing.
Originally conceived in Berkeley, CA, the new approach is catchingon. The League of California Cities and the California Association ofCounties has organized California FIRST, a government coalitiondedicated to encouraging municipal governments to adopt PACE financingfor solar.
Last Wednesday, San Diego County became the latest to enlist, when the Board of Supervisors agreed to joinCalifornia FIRST. “Sadly, our region has not even begun to tap into thepotential of rooftop solar,” Board Chairwoman Dianne Jacob said. “I amvery excited and very eager to plug into this program and get it offthe ground.”
At the outset, PACE funding will be available only for solar energyinstallations, though in the future other renewable energy and energyefficient applications may become eligible. The county will pay $25,000to join the coalition. Cities within the county must join, too, inorder for their residents to participate in the financing arrangement.
The benefits of PACE funding are three fold. First, upfront costsfor the homeowner are minimal: after an application fee, all that isdue in year one is the newly assessed property tax. Second, paymentsare amortized over 20 years and, presumably, the relative terms arebetter than what’s available from private lenders. Third, the debtstays with the property, not the property owner. This mean that, if ahomeowner decides to sell, the revised property tax assessment is theresponsibility of the buyer. While this may seem unfair from thebuyer’s perspective — no one likes higher property taxes, after all —remember that the property’s cost of ownership is lower because thesolar PV system reduces monthly electricity costs.
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