Solar industry targets new homes

SAN FRANCISCO--Solar panels are free, if you look at them through the prism of mortgage math, says Aaron Nitzkin, vice president of Old Country Roofing.

Integrating a 2.5-kilowatt solar system into a new home will add about $13,000 to $15,000 to the cost of the home, after rebates and credits, he said. On a 30-year mortgage with an interest rate of about 6.75 percent, the system would add about $105 per month to the cost of the mortgage but would cover 30 percent to 60 percent of the home's electrical needs, he said.

Homeowners in California's warmer climates, however, can expect to pay $115 a month or more on electricity if they don't have solar panels. In the hotter months, during which air conditioners are used the most, it could take $700 or more to power a house in the area. Solar panels could thus be a bargain. Plus, the additional mortgage interest associated with the solar panels can be deducted at tax time, Nitzkin noted.

"So when does the payoff occur? I say the first month," he said.

Solar panels are the new granite countertops, according to attendees at the PCBC (originally named the Pacific Coast Builders Conference) here this week. Fifteen years ago, granite countertops were an exotic, upscale option. Now it's nearly impossible to find a new or remodeled home that doesn't have stone counters. (The new status symbol for counters are those made from recycled paper).

The same will happen with solar, at least according to solar advocates, and in some ways, their optimism is founded.

To begin with, a survey conducted this month by Roper found that 90 percent of Americans think that solar electricity should be an option for new construction. That's up from 79 percent the year before.

"The average person is now starting to think of solar as a mainstream solution," said Ron Kenedi, vice president of the Solar Energy Solutions Group at Sharp Electronics, the world's largest solar-panel manufacturer.

Second, the construction industry is increasingly teaming up with solar-panel manufacturers to install solar panels in new homes. Centex is finishing up a home-building subdivision in Naples, Fla., where at least 89 homes will feature integrated solar systems from Sharp, according to Kenedi. On average, the solar systems provide 2.5 kilowatts of power and add about $20,000 to the price of a home, before rebates and tax credits. (After credits, the price drops to about $15,000.)

The average price of the homes, however, comes to about $600,000, so the monthly additional mortgage costs are somewhat low. Even with the depressed housing market, the solar homes are finding buyers, Kenedi said. They also come with a battery backup system in case of emergencies.

Similarly, Old Country, in conjunction with solar-panel maker BP Solar, has signed deals with Christopherson Homes and Tim Lewis Communities. Christopherson has already agreed to put solar panels on 157 homes and will likely expand next year, according to Nitzkin. (These homes will also come with solar-metering systems from Fat Spaniel Technologies.)

Putting in solar panels at the time of construction could help reduce the cost of going solar. About half the cost of a solar system currently is incurred by the panels and other equipment. The other half revolves around the installation. Installation costs are lower at the time of construction.

The federal government could further sweeten the pot by increasing the tax credits for solar panels. The tax credit from the federal government for installing a solar system is capped at $2,000. In Washington, lawmakers are debating whether to raise costs from $1 per watt to $3 per watt and to remove the cap. A 2.5-kilowatt system could thus result in a credit of $2,500 to $7,500.

[shane--2008]

too little too late?

solar should have been a required part of new homes for the last
decade. the panels would be much better today due to the
investment, and our power situation would be infinitely better
than it is now.

...instead we got enron and oil wars. thank goodness we take
the long term view!

meanwhile, people like me who want solar can't afford it unless
they buy a new home or take out a second mortgage.

i wonder how many solar homes the money america has spent in
iraq would have bought? oh well.

[powerclam]

too far, too left...

"solar should have been a required part of new homes for the last decade."
Required? No thanks.
I'm all for solar power, but as for govt REQUIRING it, that's a hugely bad idea. Ever hear of freedom? What if I'm waiting for the efficiency to reach a point I feel to be acceptable?
What if I have concerns about the materials they're made of?
What if I think they're hideous and prefer some other roofing material?

Your other comments regarding war and economy show you to be a "liberal" crypto-fascist with no sense of proportion or respect for others.

[suyts]

I wonder

if the solar homes are the right solution. Maybe they are. If everybody thought like you, we'd never know. The people that we are fighting in Iraq would be running our country by then.

[Inetsec]

Sounds great on the surface but.......

In all honesty I have not done any research on the subject of solar panels on homes, but I have seen a few installations around town.

The proponents claim that solar is a wonderful way to cut energy costs - that I will grant them as a fact, but what about the overall cost of ownership of a home?

Insurance, the cost of re-roofing, finding a roofing company to even touch solar panels, upkeep of the panels themselves, if the home catches fire how do fire fighters fight the flames.... the list goes on.

I think there may be a reason that solar has not caught on yet that goes beyond the initial outlay.

[regulator1956]

Lousy Math

Who pays $700 per month for electricity !?!?!

My parents live in Phoenix and they top out at $300.

My house is in Southern California, so let's do my math:

The article states $105 per month extra on the mortgage to cover 30% to 60% of my needs. My electric bill is $80 to $150 for my 3,100 sq ft 1 story house - 3,500 sq ft of roof with the garage.

If my average is $120 per month, I'd save $36 to $72 per month. Of course, after 20 years, the solar panels need to be replaced and I'm still paying the $105 per month for another 10 years. The math shows I'm losing big money over time.

I realize that the cost of energy will go up, but if I dump my incadescent bulbs and get more efficient appliances, my usage will go down.

Will we put solar panels on the roof someday? Probably, but I doubt we'll do it to save money.

[Macsaresafer]

You're downplaying the cost of not adding solar.

When you say "I realize that the cost of energy will go up" you're
assuming that it will go up at roughly the same rate it's been going
up over the last 50 years. That's a huge mistake. We're nearing the
planet's maximum potential production of oil, and when we reach
that peak, production will steadily drop while demand continues to
rise. Energy costs (not just oil/gas) will rise dramatically.

[dondarko]

it's the way to go..

housing consumes as much as 60 of our grid and solar is a relatively inexpensive solution at this time (in the future it will probably be even cheaper). That would give Kyoto a thumb up their nose with a 60% reduction in emissions.

[suyts]

If only

it could deliver the promise. It has not. Solar power has been around for decades. Still nothing. Potential? Yes, delivered.... no.

[stlwest]

Will help Power Companies, payback period still too long...

If it reduces peak daytime load, then the power companies won't have to upgrade infrastructure or install new or expand present power plants.

Regarding initial outlay, if it is left up to individuals to pay money out of their pocket, you might as well forget it. Since the payback period for solar is so high, even with incentives. If I'm the guy in California and my calculations show under the best conditions that I may break even somewhere between 15 to 20 years. The solar panel might still go to 30 years, but they also might require maintenance and batteries almost assuredly would have to be replaced. Since it mainly benefits the utilities they should sponsor the low cost loans to implement.

I think sponsoring solar in the home is so much less efficient then sponsoring a big Solar Thermal plant.

What would be nice would be to have the government mandate that utilities provide renewable energy to clients who are willing to pay for it. So those who feel it is important can choose for a percentage or their entire bill to be from "clean" power generation.

Utilities with the help of government would also be wise to develop low intrest loans for energy efficiency projects. An energy analysis should be part of the selling process for homes, this would be to find truly inefficient homes and require either the seller or the buyer be required to bring the home up to a minimum benchmark.

[Button Boy]

Where are the tax incentives?

I'd like to install panels on my roof, but I am still waiting for Congress to give me a tax break. My software company has energy management software in the works, but again- no real incentives to develop it. How can I get those big government handouts like Haliburton does?

[stlwest]

Tax incentives are available for Solar - Now is the time in California

Federal has $2000 tax credit for individuals and for businesses 30% of the project cost, no cap.

http://www.energy.gov/taxbreaks.htm

For State by state incentives and loan programs for solar, as well as other programs.

http://www.dsireusa.org/

[suyts]

Why are you waiting for a

handout? If it is the cost-effective measure to take, then do so. If your company can really manage energy, then they should do so. The money will be returned if it is effective. Why should I, a taxpayer, invest MY money in something that isn't proven effective or even have the desired effect? Quit begging, get off of my teat, and do something on your own.

[Button Boy]

Tax breaks not well defined

Taken from the DOE web page (listed prior):
"The IRS will determine final tax credit amounts. As more information becomes available, it will be posted on our web site."

This makes it hard for me to justify spending $35,00+ on a solar installation when I get such a small amount back; and even that amount is not guaranteed.

[candyco]

Unfortunately, I pay almost $700 for electricity in the summer months in the house where I currently live!!! I am building a new home that I hope will be more cost efficient and am just beginning to look at solar panels.

[hansel_gretel]

Nice article. Thanks for sharing it with us. Mortgage costs are legion. For starters, one of the biggest mortgage costs is the mortgage itself, which is ample, then you have property taxes (which are ridiculous) homeowner's insurance, and then upkeep. The costs of buying a home are prohibitive, and mortgage rates don't make home ownership the easiest thing to do ? part of the ever diminishing ease of access to the American Dream. What they don't tell you is that you'll pay over twice what your home costs in interest ? how good a deal do you have now? And since the average family moves every 5 years, you'll technically never own your own home. No wonder mortgage costs send the average person running for payday loans. For more information, you can check out this link: http://personalmoneystore.com/moneyblog/2009/08/29/mortgage-costs-1/

[hansel_gretel]

http://personalmoneystore.com/moneyblog/2009/08/29/mortgage-costs-

1/