At this point, there’s plenty of precedent for the bond-funded retrofit financing program that San Francisco Mayor Gavin Newsom suggested last spring, formally proposed in December, and then signed into law last week.
GreenFinanceSF, portions of which will be open to prospective subscribers beginning March 1, is one of several such programs that have been rolled out over the past couple years by municipalities throughout the country, including nearby Berkeley; Santa Cruz County, Sonoma County, and the city of Palm Desert, all in California; Babylon, on Long Island, New York; Boulder County, Colorado; Washington, D.C.; and Montgomery County, Maryland.
Homeowners and owners of commercial buildings who have been current on their property taxes for at least the past three years are eligible for loans of as much as $50,000 for both energy efficiency and water conservation upgrades. The loans are added to the participating property’s tax bill, with payment terms, up to 20 years, set according to the expected useful life of the improvements. Initial funding for the program is expected to total $150 million, including an American Recovery and Reinvestment Act grant and, as needed, bond sales.
SF’s special challenges
An example of the kind of weatherization-friendly financing mechanism recently endorsed by the White House, GreenFinanceSF is being administered by Renewable Funding, an Oakland, California-based municipal financing company that specializes in managing Property Assessed Clean Energy bond programs, whose proceeds are lent to homeowners for authorized energy efficiency improvements.
Newsom first mentioned the city’s ambitions for the program in March 2009 and unveiled a proposal in December, when the initiative was called the San Francisco Sustainable Financing Program, or SFP2. It is seen as one of the most powerful tools the city will have to address performance problems in houses and commercial structures that, in many cases, were built to relatively ancient construction standards.
The city is still identifying the types of improvements that will qualify for the program, although it is sure to include the installation of insulation, upgraded HVAC systems, energy efficient windows, and water-conservation upgrades. Financing for solar power installations will be available for properties that have first completed energy efficiency upgrades.