Municipalities are catching on to an innovative plan started by the City of San Diego to make solar panels more affordable to city residents, with a number of city governments expressing interest in the new financing scheme.

The San Diego Clean Generation Program, announced in December, will be the first of its kind in any major US city, according to San Diego's Mayor, Jerry Sanders. Under the scheme, the city will pay for residential solar panels, which householders and businesses will then pay for over time through their property taxes.

The up-front capital cost of installing solar panels can total around $25,000 after installation fees, material costs and inverter equipment is paid for. This scheme gives residents the chance to pay for it over 20 years, according to the Mayor, who added that because the panels are tied to the property, the cost would pass to the new owner if a house with installed panels was sold.

Payment under the San Diego programme would amount to roughly $150 a month on top of the existing property tax bill - a fee advocates of the scheme claim will be largely offset by savings on utility bills.

The scheme will not come into effect until July 1, but counties in Santa Fe, New Mexico are already considering rolling out the initiative, after the introduction of a bill by State Representative Brian Egolf.

The San Diego scheme will be conducted in partnership with a financing partner who will sell the loans as taxable bonds. It was made possible by Assembly Bill 811, which makes it possible for Californian municipalities to finance residential renewable energy projects.

The scheme is likely to act as a forerunner for a raft of green financing initiatives, both in California and further afield.

For example, last month the British Government said it was investigating similar legislation that would allow green home loans to be attached to a property rather than an individual, so that residents could install solar panels or insulation safe in the knowledge they would only pay for the technology while they own the property.

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