It redistributes wealth upward in a few ways…

The key to all of these is that a few lucky home owners get all the upside on this – that is, a class of people generally well above the median. The home owners here, are the “up” destination.

So where is the redistribution? Well…

First, it creates a new liability for Berkeley, regardless of what taxes are collected on these houses. Thus it dings our credit rating making money more expensive to the city. Berkeley could have used the credit here for something progressive but they didn’t.

Second, your darn right it attaches the costs to the houses and that’s a problem. As you point out, it arguably makes the homes in question a less attractive buy in what is increasingly already a buyers market. More importantly, there is no guarantee in this program that anyone is actually good for the 20 years of added taxes on the house. In today’s climate, that seems especially suspect. I’m looking at the number of vacant places in my ‘hood, the near completion condos up the street which one week the bankers paid a visit and the next week work stopped, and the squatters that just got chased away up the street. You can also reason that, over 20 years, fire or earthquake can take out some of these places. So, basically, the City’s guarantees here cost us all.

Third, of course there are the staff hours and administrative costs of the program which I don’t see well accounted for anywhere.

Basically, this thing appears to be green-wash-marketed development grant to a few people in possession of property well outside the means of most of us who directly and indirectly pay taxes in this town.

If you want to look at things “purely economically” then its simple enough that installing solar, if it makes sense, should add to the value of the home and so all benefit accrues to the owner – the taxpayers ought have no role here.

Well, ought not but: perhaps credit and money is so tight that, indeed, as a City we want to exercise collective might towards getting the city off the grid, right? Ok, in that case, the program should have been more along the lines that the City will finance installation of the solar panels on the condition that PG&E buys 100% of the power from the panels and pays the city until the investment is recovered with a fair return. After that, the home owner is free to enjoy the money savings of the remaining life of the panels. However, even this scheme is fraught with potential irrationality: we don’t actually know the panels are capable of paying for themselves and the administrative costs and maintenance liabilities would be a nightmare.

The program just *makes no sense* to me although it certainly does ding the tax dollars (direct and indirect) of those of us not so well off to use the program.

-t

The real benefit of this program is how it attaches the cost of the solar panels to the *house* instead of the purchaser. If you are an energy hog it might take 6 years to pay yourself back – but that means you’ve gotta stay in the house for 6 years to break even on this purchase. For more people the timeline is more like 10+ years, so buying solar panels is either a commitment to stay in your house for that time period, or to lose out, financially. With this program, that notion goes out the window, since you literally sell the ‘loss’ (i.e. debt) on the panels with the house. What I wonder is — is this a boon or bust to a potential home owner? It’s not cheap, on the order of $100+ a month added to your property taxes. My energy bill comes nowhere near that, so this would actually be a downside to a potential house, in a purely economic sense.

Believe me, I’m a huge fan of decentralized energy production, sustainable and carbon-neutral energy and all that. Those goals are absolutely critical. But I don’t see how this program just doesn’t redistribute some wealth in Berkeley upwards while dinging the City’s credit rating scores in pursuit of a program that will not obviously make a whit of difference for the environment.

-t