On November 6, 2007, the Berkeley City Council approved the concept of the "Sustainable Energy Financing District" by which the City would help property owners finance solar installations and energy efficiency improvements by creating a special tax that is paid through their individual property tax bills. Only property owners who choose to use this method of financing for such improvements would pay the special tax. On May 6, 2008, the City Council approved an amendment to the Berkeley Municipal Code (BMC) and created the Special Tax Financing Law (new BMC Chapter 7.98). The Special Tax Financing Law is the implementing legislation that allows for the creation of the Sustainable Energy Financing District.
The City was able to take advantage of the authority granted to cities under the Mello-Roos Community Facilities Act of 1982, which permitted land owners/developers, to form a community facilities district, a CFD to levy a special tax and to authorize bonds secured by that special property tax assessment.
The result of all this was the formation of the Berkeley Financing Initiative for Renewable and Solar Technonlogy (Berkeley FIRST) – a solar financing program operating in the City of Berkeley. It provides property owners an opportunity to borrow money from the City’s Sustainable Energy Financing District to install solar photovoltaic electric systems and allow the cost to be repaid over 20 years through an annual special tax on their property tax bill.
In November 2008, the City of Berkeley took online applications for a initial $1.5 million pilot program for its FIRST program. In just nine minutes, all possible spots in the pilot program were claimed and as of June 2009 38 projects have committed funding from the city. The pilot program will provide funding only for solar photovoltaic systems. Depending on future funding, it is hoped that Berkeley FIRST will ultimately be able to expand funding to solar thermal and other major energy efficiency projects.
As of June 2009, Berkeley is evaluating the completed projects and waiting until its September 2009 deadline for all pilot projects to be constructed. The project will then be unveiled on a broader basis. Future expansion of the FIRST program will include loans for energy efficiency improvements. The City is authorized to issue up to $80 million in bonds for potential projects.
- Full Text of Berkeley’s Special Tax Financing Law – May 2008
- Berkeley FIRST webpage
- Online Calculator to Estimate Cost or Savings of Installing Solar Under Berkeley FIRST Program – from University of CA Berkeley
- Municipal Property Tax Assessment Financing: Removing key barriers to residential solar [PDF] – by Claudia Eyzaguiree and Annie Carmichael, Vote Solar Initiative, October 2008 (Profiles the Berkeley FIRST Program)