June 1, 2007 10:07 AM PDT
Solar industry targets new homes
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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.
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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.
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.
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.
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.
"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.