The charge is placed on the property rather than the individual, which is similar to a Local Improvement Charge (LIC).
The program includes financing for solar hot water panels, solar photovoltaic panels, and solar hot air panels. It is available to all property owners that are a not-for-profit business entity in the municipality, including non-profits and co-operatives.
The solar system is paid back over a ten-year loan and is similar to a Local Improvement Charge, which means it is paid through a separate annual bill from their property tax bill. The interest rate is fixed at 4.75%. The annual repayment to the municipality varies in the new program since Solar City is supporting various system sizes dependent on the solar technology and its application.
Generally, the repayments could be less than the cost savings offered by the solar panels. This financing covers the cost of administering the program and leads to the cash flow remaining neutral to municipality.
Innovativeness of Solar City:
- The municipality acts as combined contracting agent, advisor, and financing solution, which offers a simple process that is very attractive to residents.
- The program is wow risk to municipality and cost neutral to operate.
- Financing the solar system through the property doesn’t impact the individual’s credit rating or debt to income ratio and remains with the property regardless of the property owner.