Two years after it unveiled a pioneering residential solar program, Berkeley has decided to close it down.

Only thirteen property owners signed up for the BerkeleyFIRST pilot program, Judith Scherr reports in the East Bay Express, despite it being cited as a model for other cities, and even countries, and receiving glowing reviews in the media.

The plan’s concept was that the city pay the upfront costs of photovotaic systems for homeowners — usually between $20,000-$40,000. The city would then raise the funds through bond sales, and property owners would repay the loan over 20 years as part of their property tax assessments. The savings on electricity bills should have been roughly equivalent to the increased property tax costs.

The sticking point was that the finances didn’t necessarily add up for homeowners. During the pilot, some Berkeley officials were even advising homeowners that they might be better off going to a bank rather than using the city’s program.

Read the full story in the East Bay Express here.

Tracey Taylor

Tracey Taylor is co-founder of Berkeleyside and co-founder and editorial director of Cityside, the nonprofit parent to Berkeleyside and The Oaklandside. Before launching Berkeleyside, Tracey wrote for...

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  1. Berkeley’s financing mechanism for PV was an innovative experiment. But there is now “solar leasing,” a private alternative financing mechanism that is in some ways similar to what the city tried out. Solar City, a company based in Foster City, is pushing this model. I don’t know too much about it but there is apparently a tax angle available to businesses which is not available to homeowners which make the business end of things work. The ending of Berkeley’s experiment is not the end of innovations on the financing side of residential solar power.

    The push for PV troubles me. Their financial practicality depends a great deal on large subsidies from both Federal and State governments. Solar power is not competitive without it. One of the justifications for the subsidies is that innovations to make photovoltaics competitive would not come about unless the market for it were big enough to spur private investment which would ultimately lower the costs. And indeed the costs have fallen but still not far enough.

    How long will heavy subsidies be needed to make PV competitive? I remember that during Jimmy Carter’s presidency, the same argument was advanced. And there were solar panels installed on the White House roof. (They were removed during Reagan’s term.) That was 30 years ago. True, the subsidy programs have waxed and waned over the years making progress uneven. But considering the extremely rapid technological innovation and cost reduction in other fields, particularly in semiconductors technologies, during the same period I wonder why photovoltaics has seemingly not advanced as fast.

    I think a kilowatt of electricity saved is worth just as much as a kilowatt generated. As long as we are throwing subsidies at the energy problem, one could make the argument that heavier subsidies for energy conservation is just as cost effective as subsidies for generation. And in the case of conservation programs, unlike generation programs, the subsidies could go to people of lesser means. PV subsidy programs inherently go to the better off homeowners with the financial standing to get bigger loans.

    Residential energy conservation doesn’t involve much in the way of shiny new things on the outside of the house. Most of it is pretty boring and not seen. But it can be very cost effective.

  2. I for one, was under the impression that the program was sold out immediately, so we never applied – we were very interested in the idea, but I’m pretty sure that when we looked into it, the message was that the program only had capacity for about 20 homes, and that there was no more financing available. I would bet that a larger scale project would attract more homeowners, especially if it is launched once the economy starts to pull out of the recession.

  3. Techies — even financial ones — almost always think that creating a workable proof-of-concept version of something is about 80% of the way to a fully functional application, when that’s really no more than 20% of the work. Failing to do the rest of the job — esp. not figuring out what potential customers needed to sign up in sufficient numbers — pretty much doomed this to failure. Like most technology projects in most companies and agencies everywhere.

    But we should not complain that this new idea was only picked up by the apparently-wealthy. That’s the usual way good new technology gets spread — at first the rich pay too much to get it first, then the rest of us buy later as the lowering cost curve meets our means and desires. Unfortunately we stopped this train before it could depart to the next, more well-configured, station. You could say we failed to think like a successsful startup company — but maybe that’s an unrealistic expectation for any government program.

    I’ve long said that Berkeley has had one supremely successful manufacturing sector — the manufacturing of innovation. But I can’t decide if it’s more unselfishness or incompetence that generally leaves it to other cities to harvest the fruit of our trees.