Rising energy costs and a healthy rebate program are making solar energy a hot commodity. But be wary of getting burned.
Take this power bill and shove it where the sun don’t shine. That’s what some energy conscious homeowners are saying, fed up with rising electricity costs, global warming, and dependency on foreign fuel. With hefty government rebates, generous state tax credits, and a healthy increase in home value, switching to solar energy is becoming a green choice in more ways than one.
“I did it completely for the environment,” says Kathryn Rogers, a Berkeley architect who had solar panels installed on her own home. “It’s just luck that it also happens to be a good financial move.”
Chris Parlette, a partner at Wilson Associates, is also an architect. He converted his North Berkeley home to solar power as part of a major remodel. “Cost was not a factor at all. Basically you’re either paying PG&E or you’re paying yourself.”
For most homeowners, cost is a factor, but as an investment, solar advocates say installing photovoltaic panels is competitive with stocks, bonds, and CDs. The savings in energy costs and the increase in value to the home almost always outweigh the investment cost.
The concept of owning your power versus renting is gaining in popularity as more homeowners learn how to take advantage of state incentives in combination with low-interest equity mortgage loans.
“It’s not like PG&E is free,” notes Kathryn Rogers, who purchased her solar equipment with a home equity loan. “If you have to make a monthly payment to someone anyway, why not make it towards an investment in your home.”
First developed by a French inventor named Auguste Mouchout in the 1860s to combat Europe’s dependency on coal, solar technology did not mature until the mid-1950s when NASA scientists began using it to power satellites in outer space. Solar power was valued for its abundant free power supply and its almost nonexistent maintenance costs. Then pioneers living “off the grid” in remote wilderness areas figured out how to construct and strap massive photovoltaic panels to their cabins in order to tap the sun’s energy. In the past decade, an increasing number of city dwelling homeowners have chosen to become power providers instead of power consumers.
Gary Gerber, president of solar design and installation company Sun Light and Power in Berkeley, says that solar energy took off after government rebates were introduced in 1998. Founded almost 20 years ago, his business has doubled each year in the past three years. “The rebates have really fueled the market,” says Gerber. “We’ve taken a relatively small amount of rebate money and have turned California into the third-largest solar utilizer in the world behind Germany and Japan.”
The sunshine state may be a great locale for solar energy devices, but most people still see the high ticket price of solar installation and shy away. On average, the California Energy Commission rebate program will refund around 30-40% of the installed cost of solar systems. Then there is an additional 7.5% state tax credit. The remaining net cost to the homeowner averages between $15,000 to $40,000 depending on the size of the system your home requires.
When paid for with an 8% home equity loan amortized over ten years, the after-tax monthly payment would be around $130. A family with moderate usage could easily have electricity bills much larger than this.
“Most people break down the monthly loan payment and compare it to their payment to the utility companies,” says Mike Hall, chief marketing director of Borrego Solar Systems, a company that has been installing solar equipment for 20 years. “Usually the after-tax loan payment is comparable to their utility bill.”
Solar systems, including hot water systems, paid for up-front, would pay for themselves in 12-14 years using the savings in utility costs alone, says Gary Gerber. A good-quality system lasts for 30 to 40 years with little maintenance.
Rebates and Tax Credits
It can be daunting to understand the California Energy Commis-sion’s rebates, the state’s tax credits, and the monthly energy savings from going solar. Fortunately, most installation companies will either hold your hand through the government red tape or do all the paperwork for you. Some companies, such as Sun Light and Power and Borrego Solar Systems, go one step further and only charge the rebated net amount for installation.
The California Energy Commission’s rebate system provides a discount of $2.80 per installed watt. Every six months–on July 1 and January 1–the rebate decreases .20 cents per installed watt. According to Borrego Solar’s Web site, a typical $30,400 home installation would earn a rebate of $9,800 under this program, at current rates. The state throws in another financial incentive by allowing a homeowner to write off 7.5% of the net installation cost. This further drops the installation price by $1,545, creating a net cost of just over $19,000 (this figure varies depending on the amount of power installed).
In this scenario, a homeowner increases the value of their home by $20,000 and saves money on their monthly energy bill. How much is saved depends upon their electricity usage going in. The California Energy Commission’s Web-based calculator can help you estimate your potential savings (www.consumerenergy-center.org/renewable/estimator/index.html).
In the most ambitious solar energy legislation ever introduced in the United States, Governor Schwarzenegger proposed the Million Solar Roofs Initiative last summer. That plan–now pending before the Senate Appropriations Committee–would extend current government rebates to homeowners for another ten years at declining rates. The bill also stipulates that within 13 years, large-scale real estate developers must install solar energy on at least 50 percent of newly built homes. This two-part proposal is designed to encourage Californians to install one million solar energy systems by 2018.
Max Mayer is a field representative for Cooperative Community Energy, a co-op based in San Rafael that purchases solar equipment at wholesale rates for its members at savings up to 20 percent. CCEnergy also provides home analysis, solar design, and installation. Mayer says he was against Schwarzenegger’s first draft of the Million Solar Roofs Initiative because it “favored new home builders and did nothing for our clientele, who mostly install solar panels on pre-existing homes,” says Mayer. “And it didn’t have any quality control regulations. You could’ve had a million new solar systems but no guarantee that they worked.”
Schwarzenegger’s proposed version of the legislation spreads the rebates to both new and older homes and is less strict about requiring all new homebuilders to install solar energy.
Many people don’t know that the rebate money actually comes from PG&E customers. “There is a $2-5 per household charge buried in everybody’s PG&E bill,” says Gerber, of Sun Light and Power. “This money goes into a big pot and then the energy commission funds various energy programs with it. So it’s not actually state money that pays for the rebates. Ironically, the people who consume the most energy are the biggest contributors to the solar rebate program.”
Mike Hall is optimistic about the future of solar panels in California, especially because of California’s rebate program. He says that Schwarzenegger’s proposal would give manufacturers an incentive to invest in equipment to mass-produce solar panels and that will ultimately lower the cost to consumers.
“Without [rebates],” says Hall, “we couldn’t have stayed in business. Nobody knew what was going to happen and it created instability for the manufacturers. They didn’t know if there was going to be a market or not.”
Fossil Fuel Flak
According to the EPA, for every kilowatt of photovoltaic capacity installed, a homeowner can avoid releasing the 1,860 pounds of carbon dioxide a utility company would have generated.
And advocates of solar energy argue that if more homes were equipped with solar energy, it could help the U.S. to become a world leader and exporter of power, possibly even reducing the national trade deficit. Using renewable solar energy could help avoid the cost and quagmire of maintaining energy supply routes in politically volatile regions such as Iraq.
“In Berkeley, people are really into the principle of it,” says Parlette, who designed his Berkeley home.
“I’m not polluting!” exclaims Rogers, who enjoys being classified by the utility company as a “power producer.” She says, “The first time I saw my meter running backwards, I almost had tears in my eyes.”
One drawback for many people hoping to eliminate their utilities altogether is the fact that photovoltaic solar energy systems only generate electricity. Most people still use natural gas for heat, cooking, and water heaters.
For those also interested in eliminating the “G” from their PG&E bill, solar hot water systems are an option. For the average household, these systems cost between $4,000 to $8,000. Similar systems can be purchased to heat a pool or hot tub. Gerber’s Sun Light and Power business primarily manufactured and installed solar thermal hot water systems for nearly 20 years before solar electricity modules became more popular.
“Solar thermal systems are much simpler technology,” says Gerber. Unlike electricity-gathering solar panels, solar hot water heating panels have thin water pipes laid in a grid like fashion on the roof within the specialized solar panel. The water is directly heated by the solar collection panels and piped back into a hot water tank. This solar heated water can also be piped to radiant floor heating as an alternative to using fossil fuel for heating.
“A lot of people call me because they are attracted to the solar electric modules,” says Gerber. “When they see what else is possible, they realize that solar thermal water systems are also a good way to go.
“My ultimate goal is to get my whole house off of fossil fuel,” adds Gerber, who has been a solar advocate since taking his first engineering class in solar energy at UC Berkeley in 1973. Today he teaches a class at the Building Education Center in Berkeley to educate homeowners about solar energy.
Gerber’s plan for complete solar energy usage on his own home includes converting to solar hot water, solar pool, radiant-heated floors operated by a heat pump, and solar electric washer, dryer, and stove. He installed additional solar capacity on his home to provide enough power to charge his electric car. “A lot of people don’t realize that their automobiles use far more energy than their homes,” says Gerber, who drives 65 miles each way to work. A complete set of panels also runs his Berkeley office and charges his car for the ride home.
Most homeowners who’ve gone solar opt for PG&E’s “time of use” utility plan, which charges the highest rates from noon to 6 p.m. It works this way: When the sun is shining during the day while you’re at work, your meter is running in reverse, building a credit with the utility company at the higher cost. Then at night, because you have not actually stored any energy, you buy the energy back at the reduced, off-peak rate.
This give-and-take to and from the utility grid allows a homeowner to build up credit during sunny summer months as PG&E buys your homegrown electricity at market rates. PG&E keeps a running tally of this earned credit and applies it during cloudy winter months when panels fail to generate enough power. At the end of a 12-month period, PG&E returns your credit to zero no matter how much unused energy is left.
Ideally, your solar panels should generate exactly what is needed over a one-year period; solar equipment installers need to see at least a year’s worth of utility bills when assessing a job. Installing more solar panels than your home requires can be an unintended gift to PG&E. “If you generate more electricity than you need, PG&E zeros out your credit at the end of the year. They’ll never write you a check,” says Max Mayer of Cooperative Community Energy.
Before calling solar contractors for quotes, begin by making your home as energy efficient as possible. Replace incandescent bulbs with good quality compact fluorescent lamps. Install occupancy sensors, and use efficient appliances that have EnergyStar ratings. Also make sure windows are properly sealed and walls are well insulated. Begin conserving a few months in advance to determine exactly how much power is needed.
Maurice Levitch, a Berkeley homeowner who recently installed solar panels, recommends getting at least two or three contractor bids just like with any building project. “It’s amazing how each one can come up with a completely different scenario for how much energy you need and how it should be laid out.”
You should also check that a contractor has a C46 solar license, says Claudia Wentworth, vice president and CFO of Quality Solar, a sales and installation company in Alamo. “And make sure your contractor offers both sales and in-house installation so there’s accountability,” she adds.
Before converting your house to solar energy, a solar professional should evaluate your roof to see if there is enough sun exposure. (This is an assessment of light versus shade exposure, not weather.) Small neighboring trees could pose future problems. An optimal condition is full sunlight all day, but a minimum of six hours should be adequate. If you have at least the six-hour minimum on the winter solstice, you should be OK for the rest of the year.
While a southwest orientation is probably best for the Bay Area, a roof orientation of south, east, or west can give great solar access. The energy difference between angles within this range might be only 10-15%. In lieu of adding costly frames to alter the angle of your solar panels, you can compensate by adding more modules. If you’re building a new home or an addition on your existing home, talk to your architect about designing for optimal solar capacity. Some commercial buildings use tilting panels that shift toward the angle of the sun, but few residential users opt for the high cost of these systems.
Besides getting a system sized to meet your energy demands, make sure the type of panels you buy matches your lifestyle. The large flat panels that you see on roofs are technically called solar photovoltaic panels. There are three basic types to choose from.
A “Stand Alone System” is for those that want to be off-the-grid and still run their appliances during blackouts–an option commonly used by people who live in remote areas. This system uses a large battery bank to store collected power and does not qualify for the rebate. Many people don’t like these systems because batteries are expensive, toxic, and require more maintenance.
The most common is the utility “inter-tie” system which saves you money because you can build credit with PG&E. It pays itself off over time. This is similar to the Stand Alone System except it is connected to the utility grid and has no battery.
A third option is the inter-tie with battery, used mostly by people in areas with frequent blackouts or who run equipment that needs continual operation.
Many people are put off by the space-age look of gleaming black panels on their vintage homes. Fortunately, new designs help to integrate the panels directly into the building itself, making them more invisible from the street. Maurice Levitch says his panels are so well integrated into the architecture and design of the house that they are barely visible from the street. To him, this isn’t a good thing.
“I like to show off my panels,” he says. “I always walk people up the street so they can get a better view.”
Levitch says that not enough solar installers pay attention to aesthetics during installation. “It’s important that the panels are laid out in a balanced and appealing way. If you have to move a vent to make it look better, it’s better than putting the panels at unappealing angles.
“Talk to your contractor about how you want it to look,” he says. His contractor drew a plan on the roof so that Levitch could visualize the results before they actually installed the system.
As more homes and remodels are designed with solar energy in mind, solar energy systems will likely undergo their own design changes to integrate them into the look of the home. While some older panels look like alien crafts that landed on a home’s roof, most people choose solar energy for the cost savings and for the environmental benefits. With today’s more affordable systems, there may be an alien object on the roof in your future. l
–––––––––––––– Amy Gillespie is a freelance writer who covers environmental and social issues in the San Francisco Bay Area.
The following is a listing of some Bay Area solar companies and green design architects. To check which solar companies have a C46 solar license, visit the Contractor’s License Board at www.cslb.ca.gov.
Alcor Solar, solar pool heating systems, Concord, (925) 825-5658; www.alcorsolar.com
Arkin Tilt Architects, integrated passive and active solar design, 1101 Eighth Street, #180, Berkeley, (510) 528-9830; www.arkintilt.com
Borrego Solar Systems, solar energy systems and services, 727 Allston Way, Suite B, Berkeley, (510) 843-1113; www.borregosolar.com
Cooperative Community Energy, a buyer’s solar cooperative, 534 Fourth Street, Suite C, San Rafael, (415) 457-0215 or (877) 228-8700; www.ccenergy.com
Diablo Solar Services, solar pool heating systems, 5021 Blum Road, #2, Martinez, (925) 313-0600; www.diablosolar.com
Earth Star Electric, solar electric design and installation, Oakland, (510) 547-7848
Levitch Associates, green design build architects, 1029 Heinz Avenue, Berkeley, (510) 845-6941; www.levitch.com
Light Energy Systems, solar energy systems and services, 965 D Detroit Avenue, Concord, (925) 680-4343; www.lightenergysystems.com
Power Light Corporation, commercial solar design, manufacturing, and installation, 2954 San Pablo Avenue, Berkeley, (510) 540-0550; www.powerlight.com
Quality Solar, solar energy systems and services, 108 Crest Avenue, Alamo, (925) 935-7861; www.qualitysolar.com
Sogno Design Group, architecture and sustainable design, 1335 Santa Fe Avenue, Berkeley, (510) 526-2720; www.sognodesigngroup.com
SolarWinds, solar energy systems and services, Concord, (925) 685-1565; www.solarwinds-energy.com
Sun Light & Power, solar energy systems and services, 1035 Folger Avenue, Berkeley, (510) 845-2997; www.sunlightandpower.com
T & T Solar Service, solar energy systems and services, pool installation, 8452 Deervale Road, Dublin, (925) 828-4411
Wilson Associates, architecture, design, and construction, 755 Folger Avenue, Berkeley, (510) 883-0868; www.dswdesign.com