SOLAR POWER 2007 – DAY 3: COST

What you want to know is how much it's going to cost. Pretty simple question, right? But did you ever ask a car salesman that question? Not so simple. (Some installers, like car salemen, are even going to offer you the option of leasing.) Buying a solar system is a purchase in the same general price range as a car, the 2nd or 3rd biggest purchase most consumers will ever make. So how much does it cost?

Before beginning, know this: Governor Schwarzenegger’s “Million Solar Roofs” plan (a.k.a. California Solar Initiative, CSI, a,k.a. Senate Bill 1, SB1) is a complicated matter. Installations fell off dramatically when it went into effect in January 2007 because of price point details and bureaucratic complexities. The Governor got it straightened out and the industry has come back but it has not yet fully adjusted to the complications. Expect whoever you talk with to complain (probably vigorously) about the rebate program – and then assure you it cuts your cost and tell you you’d better hurry up and buy your installation before the benefit diminishes.

About half of the cost is in the solar panel. The other half is in the hardware and installation. Brackets and wiring are improving all the time but are pretty standard. The single most expensive hardware feature is something called an inverter that turns the electricity made by the sun and the panels into electricity that can go into the grid. (Whenever you need more electricity than you make, it will continue to come from the grid, guaranteeing your power supply. The electricity you make that you don't use goes into the grid, reducing your bill.) If you want a battery storage system, that costs extra. (Like leather seats, computer navigation and satellite radio).

A 2.8 killowatt system installed by Borrego Solar near San Diego: All you need.

The good news: It may take longer than you expect to start making free electricity but system guarantees last at least that long, if not longer.

And everybody agrees that with no more serious maintenance than simply cleaning the panels 2 or 3 times during the hottest, driest, dustiest months, the system should last 2 or even 3 times longer than the payback period.

Solar Power 2007 – Day 3: Cost

WHO
Solar systems sales experts: REGrid Power (Rich Moore), Borrego Solar, Pacific Power (John Berry), REC Solar (Gabe Davis)

A Pacific Power gas station/minimart installation in Fairfield, Calif: Using every bit of rooftop.

WHAT
How much does it cost to do good for the world and get free electricity from the sun?What is the cost of a solar system for your home, your apartment building, your business or your commercial operation? And when does the utility company start paying you for the electricity you make on your roof?

WHEN
Today. And going forward.

WHERE
Under the sun. (Most utility companies in California, by the way, don't have "feed-in" tariffs" and consumers cannot profit beyond the limits of their utility bill on solar energy generated by their systems.)

WHY
- Like all good salesmen, NewEnergyNews’ experts answered the question with a question: How much electricity do you use?
- Electricity is measured in watts. Consumption is measured in watts/hours. Residences and businesses consume kilowatt-hours. Residences normally require a 3 to 5 kilowatt system. A gas station uses a 30 kilowatt system. A car dealership uses a 220 kilowatt system.
- Utility rates vary. Higher rates incentivize adoption but, more importantly, make payback quicker because the electricity that comes off the bill has a higher value.
- For more information on rates and utility programs, check with PG&E, LADWP, Southern California Edison, or San Diego Gas & Electric.
- The orientation of the surface on which the installation sits is critical. A south/southwest slope of the proper angle obtains the best sun saturation and maximizes solar electricity production. What is the best slope? Well, it’s complicated. Don’t worry about it right now. The installer can make adjustments and will tell you if the prospects of your situation are not promising.
- Though nobody will say so with any commitment because of the variables, the general consensus seems to be that the cost for an average home system of 3 to 5 kilowatts is going to fall in the general range of $8000/kilowatt, putting the cost (after state rebate programs) in the mid-$20,000s. Paying off such a system is likely to take 8 or 10 years. If rates are higher, it may happen in 7.
- Businesses are likely to need all the roof space they have. In very round numbers, the cost ranges from $7/watt to $8.50/watt. Payback for business systems is much better because there are much better rebates and tax incentives, though they are diminishing as more people buy solar and taxpayer funded incentives become less necessary.
- The industry is full of talk about silicon panels and thin film materials, new installation methods and new equipment, concentrating solar innovations and solar thermal innovations. Don’t expect system installers to show much interest. That’s like trying to talk robotics with the guy you buy your laptop from. Remember, you’re basically talking to a contractor. And a salesman.

A 4.5 kilowatt system installed by REC Solar in New Brunswick, New Jersey: With an estimated $1700+/year utility bill reduction and a life of 2 or 3 decades or more, how is this NOT going to move the house price up more than the system cost?

QUOTES
- Rich Moore: “Your utility company dictates your electricity rate and the size of your electricity bill dictates the system size…If [the buyer] is in any business or management position they’re going to think about payback.”
- Pacific Power: “Typical business system cost: 15% is paid with the electric bill, 57% is paid by tax incentives, 28% is paid by the California Solar Initiative rebate.”
- John Berry, Pacific Power: “The most maddening part of the process is the rebate structure and how much is available per watt keeps going down. In January it was 39c/watt, then it was 34c, then 29c, now it’s 26c and soon it will be 22c. Business seems to be slowing down as we drop down.”
- Gabe Davis, REC Solar: “This year should have been a perfect storm with Al Gore’s movie, the price of oil, all that...Sales should have been higher...CSI cooled off the market.”