Solar industry targets new homes

Solar panels are somewhat rare now, but they will be pretty standard on new homes in the future, advocates say.

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.

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