Calif. town mulling tax incentive for solar energy

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BERKELEY, Calif. -- City leaders in Berkeley, Calif. are expected to make a major leap forward Tuesday by becoming the first in the-nation to allow homeowners to pay for solar energy systems through their property taxes.The City Council is slated to approve a new tax district that residents could join voluntarily to finance solar energy systems for their homes. The city would reimburse the homeowner for the installation and material costs, and the homeowner would pay back the money at a fixed rate over 20 years. The advantages for homeowners are that the city can borrow money at a lower interest rate than an individual can and that the tax program would stay with the house if the homeowner sells.Cities and counties throughout the United States, eager to reduce greenhouse emissions, have been watching Berkeley's progress with the plan, which has been delayed by the slow economy and difficulty in finding a financial institution willing to invest in the program. City staff members have been negotiating with several institutions and will announce their selection next week. "If this works, it'll be the most important thing we've done to fight global warming and climate change," Mayor Tom Bates said. "But the devil's been in the details."On a typical $22,000 solar energy system, residents would pay about $180 a month, based on a 6.75 interest rate, after state and federal rebates are issued. At some point the homeowner would save more on their electricity bill than they're spending on the solar tax, if energy rates continue to climb.Berkeley City Hall has been flooded with interest from residents and other municipalities, but the program is probably not right for everyone, said Deputy City Manager Christine Daniel."People have to look at this for their own reasons," she said. "It depends on how much power you use, the economic side, how interested you are in climate change or an array of those reasons put together."San Francisco, Santa Cruz County, Palm Desert, and Galt in California, plus Boulder, Colo., and the state of Colorado are among the agencies that are close to establishing solar financing districts, based on Berkeley's model."Cities all over the state are struggling to reduce emissions, and this is a way they can really make a difference," said Cisco De Vries, who drew up the original plan as Bates' former chief of staff and who now works as a public policy energy consultant. "I have yet to meet a city that thinks this is a bad idea."Berkeley has set particularly tough emissions goals. In November 2006 voters passed Measure G, which mandates the city to reduce its greenhouse emissions by 80 percent by 2050.(E-mail Carolyn Jones at carolynjones(at)sfchronicle.com)(Distributed by Scripps Howard News Service, www.scrippsnews.com.)