The City of Berkeley's Financial Initiative for Renewable and Solar Technology (FIRST) is a game changing financial instrument. Berkeley officials brainstormed the idea of paying for residential solar panel installations with a City bond. Homeowners who agree to join the program pay off the bond through special assessments on their property tax. Under the program, which began on Nov. 5, 2008, the City will pay up to $37,500 per home for new solar panels. The homeowners get to choose solar panel brands and installers from a list approved by the City. The term of the bond is 20 years. After solar rebates and subsidies are applied to the installation cost, monthly payments for homeowners are around $120.

There are several novel aspects to this initiative. Even though this program is bond financed, no referendum was required because residents enter into it voluntary and if property owners don't want the benefit they simply don't pay for it. In addition, the bond district is ‘virtual' in that the participating properties are not contiguous and no line can be drawn around the district because it has no boundaries. Berkeley has some unique districting powers in its charter that other jurisdictions in California, which were incorporated under other statutes, do not. To address these differences, the California legislature expects to pass legislation in 2009 that allows all local governments to form "virtual" districts to finance voluntary solar projects.

There is very little precedent for this program but very high interest from governments, residents, and businesses. Across the nation and the globe, local governments are calling Berkeley to learn about the legal structure of the program. Even though the Berkeley program is relatively young, residents quickly claimed the first round of available loans. In anticipation of an expanded program, multinational solar corporations are opening offices in Berkeley and hiring workers at a rapid clip.

Pic: city of berkeley's website

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