Downside to California HERO Program?

[lkstaack]

Can anyone comment on the downside of the HERO Program?

I am planning on paying cash for a PV system. A local newspaper had an article about the HERO program, so I asked two solar installation Reps about it. One advised me not to use it because of the high interest rate (5.95% for five years). The other indicated that you can save money with it, depending on your tax situation. He had a HERO calculator and plugged in my Federal/State tax rate and other data from his estimate. The calculator indicated that I would realize a tax savings of $14,310 over five years with payments of $39,880 for a $29,504 system. It seems I would save $3,934. Does this seem likely?

The HERO Program, as I understand it, has a private financial company making 5-20 year loans for energy efficiency projects. People pay back the loans through higher property taxes and then the County pays the finance company. Although you pay through the nose for a high interest loan, you are able to deduct it with your property tax bill.

Anyone have first hand knowledge of this program?

[sensij]

Can anyone comment on the downside of the HERO Program?

Anyone have first hand knowledge of this program?

I looked at it a bit before deciding against it, but did not run the numbers as you have done. One other aspect of the program that you may have come across is that the loan can actually transfer to the new owners, in the event of a sale. That could be a plus or a minus, depending on your point of view. The specific details of the loan matter, it is also possible that the remaining balance would be due at the close of escrow.