More businesses should be able to take advantage of property tax financing to fund installation of renewable energy, as well as energy efficiency retrofits, through the Recovery Through Retrofit program recently announced by Vice President Joe Biden.
Some states and local governments already allow property tax financing for renewable energy projects. Typically a government fund provides financing for the project, which is paid back through higher property tax assessments over a number of years.
The new program appears to be based on the so-called “Berkeley model,” which was established in the California city in 2007 and allows improvements to be repaid over the course of 20 years via property tax assessments, reports SFGate.com.
Such financing is now available in 14 states, including California, New York and Texas, after state legislature’s passed laws easing the pathway for local governments to create such financing plans.
The attractiveness of the programs is that they eliminate the up-front costs of adding renewable energy or doing expensive energy efficiency retrofits. Additionally, current property owners would not be bound by the expense if they went out of business or decided to move to another location, as the costs of financing the improvement would be tied to the tax assessment for the individual property.
Biden’s plan is aimed at giving local governments the framework to easily set up such programs. Learn more about the plan here (PDF).