Thanks to an overflowing sewer fund reserve, the rural, northeastern Oregon town of Pendleton is offering its residents $9,000 no-interest rate loans to help them go solar with little out-of-pocket costs. Through other funding its also offering businesses loans of up to $125,000 to go solar.

It’s the second year the city will offer the loans. In 2010, 56 homeowners went through the Solarize Pendleton program, with 39 of them receiving loans through the program, and the rest were able to finance the installations themselves, according to program manager Lindsey Hardy.

“Pendleton is a relatively small place. There are about 17,000 residents. On a per-capita basis, we’ve already done more than Portland and their Solarize Portland projects,” she said.

In 2011, the town will offer the loans to up to 75 residents, requiring $675,000 in funds from the sewer rate stabilization fund, with the community development fund paying the interest.

“We’re not allowed to use any of that money because it’s in bonds. We can’t spend it on other projects, but as long it’s being returned to the city, we can use it,” Hardy said.

Some additional funding will come from the $4,500 payments that last year’s recipients will pay as their first installment for the 4-year loan term.

“This year we also took advantage of money set aside for another project,” Hardy said. “We have started a loan program for businesses.”

Under that program, Pendleton is making $1 million available in $125,000 loans to businesses that want to install solar power.

The funds came from a delayed wastewater treatment plant project. The business loans are only for one year.

“They’re much more front-loaded,” Hardy said.

The program, which is based on the Solarize Portland program, is still in its pilot phase, Hardy said.

“We made it unique by doing it in a rural community,” she said. “I’d like to say we will do a third round in the future,” she said. But at this point, she’s unsure if they will.

However, other Oregon communities, like Beaverton, are taking up the Solarize model as well, according to Hardy. “

We hope the loan-funding program is something we can help create a replication scenario for, for other communities,” she said.

Image courtesy of Solarize Pendleton.