Like the sun climbing over a California hillside, there’s a slow progress of municipal incentive programs for installing solar collectors and other energy conservation improvements.

The growth may be a little slower than proponents hoped in 2008 when the state passed a law empowering its municipalities to fund such programs and allow repayment of loans through property taxes.

“It didn’t help that the economy flipped on its head during the initiation of this program,” said Ross Clark, climate change action coordinator for the city of Santa Cruz, which is interested in offering residents solar incentives. “The bond market was crashing at the time they implemented the program.”

In mid-August, the city of Berkeley’s waiver on solar permits for residential projects lapsed. The city had appropriated $25,000 for that purpose a year ago.

“We’re a bit of a victim of our own success,” said Nils Moe, assistant to Berkeley Mayor Tom Bates on environmental issues, as the money was used up to waive the fees.

Mindful of the revenue crunch facing municipalities all over California, Berkeley policy makers are discussing ideas for extending the funding, Moe said.

The city has a map that is dotted with yellow diamonds for residential solar projects.

The Alameda County city was a pioneer last year with its Berkeley First program, a pilot project allowing residents to borrow from a Sustainable Energy Financial District. Residents are able to pay back the loans over 20 years through a tax added to their property tax bill.

The Berkeley program, as well as others started in the last year by the city of Palm Desert and Sonoma County, was empowered by a 2008 state law, AB 811, authorizing municipalities to finance alternative energy projects.

Berkeley’s pilot approved 38 projects. The period for owners to secure their financing extends through September. After that, city staff will do a comprehensive evaluation and talk about ways to make the program permanent, Moe said.

Also, Berkeley officials have talked about ideas for regionalizing the program, which might provide further economies of scale, said Moe, citing the Sonoma County program, which in addition to solar panels provides loans and incentives for water conservation measures.

Since starting in March, the Sonoma County Energy Independence program has received 461 applications, approved 322 and 242 are under contract, as of Aug. 14, said Jim Toomey, public information officer for the county. That adds up to $11.1 million in approved projects.

“Our program is about saving energy,” said Toomey. “We want to offer the ability for people to finance these improvement projects because typically it’s up-front money that’s the largest obstacle.”

The program is funded by a pledge of $100 million from the county and the Sonoma County Water Agency. The math works out that the program starts to generate revenue for the county on about $25 million worth of loans, as they are repaid with interest, said Toomey.

Sonoma County has discussed their program with other interested California counties, including Contra Costa, Los Angeles, Marin, Mendocino, Napa, Santa Cruz and Santa Barbara, and some out-of-state groups.

The city of Palm Desert, after the state passed AB 811, set up an Energy Independence Program in conjunction with local utilities. The program has committed $7.5 million to 220 projects (four commercial and the rest residential).

With the popularity of the program, officials have recently capped the program at $100,000 for any one project so as to spread the committed money, said Benjamin Druyon, energy project technician for Palm Desert.

The city is feeling the pinch and has begun talks with local financial institutions to fund the loans, Druyon said. There’s also talk of an incentive program in Riverside County, Druyon said.

Santa Cruz County has applied for a grant from the Environmental Protection Agency to help finance an incentive program for solar installations. If it fails to secure that grant, the county would be forced to offer consumers loans at such a high rate as to restrict the demand, according to a memo by Susan Mauriello, county administrative officer.

The city of Santa Cruz is watching developments. If the EPA grant fails, it may pitch in with other regional efforts, Clark said.

In San Diego, county government set up a web page earlier this year to give residents information about qualified solar contractors, the permitting process and contact information for local banks that have agreed to finance loans for solar panels. The banks are offering better interest rates than municipally financed loans typically do, said Dan McAllister, San Diego County treasurer-tax collector.

“I don’t envision us making the county investment pool available for this type of activity,” said McAllister. “We’re pretty conservative when it comes to investing the people’s money.”

Lance Howland can be reached at