Tools help homeowners go solar
By Tanya Rose, Contra Costa Times
Source: San Jose Mercury News, 25 April 2008
http://www.mercurynews.com/ci_9060225?nclick_check=1
Almost four years ago, fish shop owner and Brentwood Mayor Bob Taylor installed a $60,000 set of energy-saving solar panels on top of his Tidewater Court home. He now runs his backyard Koi fish pond through the system — that’s two water pumps going around-the-clock, plus indoor electric appliances, running off of solar power. Last year, his electric bills totaled $538, down from about $6,000 per year in pre-panel days. “I have no regrets, even with the panels being so expensive,” he said. He got a $20,000 rebate as part of the California Solar Initiative, which was instituted in 2007 by the state and is available to every homeowner. That, plus other discounts, brought the cost of the panels down to $23,000.
Although solar power has grown almost 50 percent in the past couple of years, it makes up less than 1 percent of U.S. power generation, and that’s because of the exorbitant costs, experts say. But financial tools such as rebates, tax credits and other creative partnerships are making going solar more appealing to homeowners.
Taylor, like most who use solar panels, is not completely off the power grid, but his Pacific Gas & Electric bills are about $40 per month — down from $400 to $600 monthly. That’s because solar energy, which emits no global-warming gases, provides power in the middle of the day when cost is highest. That’s also when people need and want power the most. “I got in before it was popular,” Taylor said. “And I’m gonna have this baby paid off in five years instead of the seven or eight years they were projecting.”
Taylor is one of more than 2,000 homeowners throughout Contra Costa and Alameda counties to have roof-top solar panels, and thousands more throughout the state who have gone solar. Some of the financial incentives used by these homeowners have been around for awhile, and some that are just emerging so that people can buy the panels for still less.
Two months ago, a company called Sun Run opened in Silicon Valley, offering to install panels on houses for less than the regular price. The company owns the panels and continues to own them, then simply charges a monthly fee to the homeowner to use the equipment, much like a car lease. Sun Run also pays for ongoing maintenance and folds that cost into the monthly fee. This set-up is called a power purchase agreement, or PPA, and it is one of the new tools designed to conquer obstacles stopping the average homeowner from going solar. “Even though you’re paying this monthly fee, it’s cheaper than what (Pacific Gas & Electric) charges you each month,” said Jay Hermon, a solar consultant with the company REC Solar.
Here’s a sample PPA situation: A homeowner in Walnut Creek whose electric bill is normally about $225 per month would pay $11,000 for the installation of the panels. Then, he would pay a company such as Sun Run $68 per month for use of the panels and maintenance costs. The PG&E bill would still be about $70 per month — because this person would not be completely off the power grid — and that bill plus the monthly Sun Run fee would total about $140 per month. That homeowner would save about $85 per month with solar panels.
“And the company doesn’t make money unless the panels are producing power, so they really have an incentive to fix your equipment if it breaks down, and keep it clean.” His company has partnered with Sun Run to get in on these deals, he said. Hermon said that with utility rates going up, and solar panel prices expected to drop by half in a matter of years, hurdles are becoming lower and lower.
“Every time PG&E’s rates rise, you basically make money,” he said. “The big thing is to hedge against the electricity rates. The way to look at it isn’t in terms of years to pay it off, but what is the return on the investment? It really beats other things, it’s stable, and it’s only going to get better.”
Brentwood’s Bob Taylor, for example, saved about $16,500 in electricity bills in three years. “It’s a sign of the times,” Hermon said. “In five years, it’ll be a whole different ball game but the U.S. is still way behind. We’re 9 percent of the worldwide solar market.” REC, Hermon’s company, installed 764 systems throughout the state in 2007, compared with 455 in 2006 and 225 in 2005.
While Contra Costa has had 780 residential systems installed, Alameda County has 1,259 — the third highest concentration in the Bay Area, according to a recent study by the Northern California Solar Energy Association. And Alameda County is No. 1 out of the Bay Area’s nine counties in terms of the highest number of watts generated by systems, at almost 30 million watts.
Other methods of bringing down the price include teaming with other homeowners, in grass-roots fashion, to buy in bulk. That pushes prices down 15 percent to 25 percent, Hermon said.
Residents in downtown San Jose got together as a group in January 2008 and are having panels installed now. They started the Downtown San Jose Solar Project and blogged about the experience at sanjosesolar.blogspot.com. REC is getting ready to install a multiple-home project in Livermore, and next month, it will start on a 40-home installation project in Walnut Creek.
There also are municipal efforts afoot. Elise Hunter of the Berkeley-based nonprofit group Build It Green said her organization is involved in a city-sponsored effort in Berkeley to get homeowners hooked up with solar panels. “One of the misgivings people have is that you have to know you’re staying in your home for many years to see a return on the investment,” she said. “But with this Berkeley initiative, the city pays the entire cost of the panels and then you as the homeowner pay the city back through property taxes.