NY Times: San Francisco Joins the Club of Green Financiers

By Gerry Shih

It was an idea born in the Berkeley mayor’s office in 2007, tried out in that city in 2008 and then implemented in eastern Riverside County, in one of those parched towns strung along Interstate 10 known for little besides the occasional music festival, the sprawling desert and 350 days a year of sun.

Now San Francisco is joining the fast-growing club of municipalities that sponsor a Property Assessed Clean Energy program.

The idea is that county governments front the capital cost for homeowners to make green improvements, such as installing solar panels or efficient furnaces. Homeowners pay off their debt through a slight annual increase in their property-tax bills.

Beginning March 1, San Francisco property owners who have paid their taxes on time for the past three years will be eligible for loans of up to $50,000 for such improvements. The loans are attached to the property (rather than the owner) and are paid back over no more than 20 years.

The creation of the San Francisco program, named GreenFinanceSF, comes at a time when federal and local officials are adopting a more direct approach to promoting energy efficiency, in some cases by helping homeowners and businesses with financing, and in other cases, by footing part of the bill.

On Monday, Mayor Gavin Newsom signed GreenFinanceSF into law. He and Supervisor Eric Mar first introduced the proposal in December.

“It helps home and property owners overcome the large up-front costs of major environmental improvements,” Mr. Newsom said today in a statement.

With the city still facing a half-billion dollar deficit, however, the mayor’s aides rushed to point out that the program, to be capitalized with $150 million, will be privately financed and will not affect the city’s budget. Instead, Renewable Funding, a for-profit, startup company in downtown Oakland, will administer the program at no cost to the city. It plans to dip into the bond market for capital as needed.

Since Berkeley and Palm Desert in southern California kick-started their pilot programs in consecutive weeks two years ago, the concept has quickly gained traction from coast to coast, with cities and counties in 12 states, including Sonoma County, Boulder, Colo. and Montgomery County, Md., in the suburbs of Washington D.C., rolling out similar programs.

Next up in California are Los Angeles and San Diego Counties, which will announce green financing programs this summer, said Cisco DeVries, the former chief of staff for Berkeley Mayor Tom Bates, who went on to found Renewable Funding.

In a somewhat similar vein, President Obama proposed a federal program in December — nicknamed “Cash for Caulkers” by commentators — that gives homeowners rebates of up to $12,000 on 50 percent of the cost of energy-related upgrades.

“There’s an enormous tailwind behind all of this,” Mr. DeVries said in a telephone interview on Monday.

http://bayarea.blogs.nytimes.com/2010/02/08/san-francisco-joins-the-club...