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California Leading the Way in Residential (Home-Based) Solar Systems

 
エネルギーCO2削減 2011年7月6日

Rapid Access International, Inc.

June 2011

http://www.rapidaccess.com/

With the recent high fuel costs globally and the interest by consumers in using “green” technology, a new trend in the US is for consumers to generate their own electricity through home-based solar systems. Typically, these systems include the installation of solar panels on their homes or on their property and renovating their homes to use more energy efficient heating and cooling processes. In states such as California and other places, the local government is also stepping in to offer incentives to the consumer to earn money for the electric power they generate above and beyond what they need within their homes. The result is a “win-win” situation where the consumer is able to save significant money through the generation of their own electrical power needs as well as reducing the amount of fossil fuels burned to generate electricity. The electric utility company burns less fuel to generate electricity and actually “sources” green energy from surplus power generated by homeowners from their solar systems.

Background:

In the United States, California often leads the rest of the country in new trends and technologies. In addition to this fact, California also experienced one of the most catastrophic power crises in US history in the 1990s with the blackouts during the period of deregulation when ENRON controlled the electric power grid in much of the state. Thousands of homes lost power and experienced extreme energy shortages and blackouts. Californians remember that period well and that is one of the reasons they strongly support the ability to control their own electric power generation. The home-based solar energy market has grown significantly in the past few years due to the efforts of the California Solar Initiative (CSI). The City of San Jose ? the heart of Silicon Valley ? is a good case study to look at since it is populated by technically knowledgeable residents with a strong passion to save energy and create new models for energy generation and distribution. San Jose and most other major California cities offer one of the most comprehensive rebate programs in the United States. So, the amount of savings on California residents' electricity bill plus the rebates offered by both the US federal government, the State of California, and the electricity provider are significant and make it worthwhile for the resident consumer to install a home-based solar energy package on their home.

The Cost of Home-Based Solar Energy Systems in California

There are multiple programs an energy consumer can take advantage of in California and many other parts of the US. Depending on the size of the house, the price for installation of the home solar systems ranges in price from just a few thousand dollars to $30,000 and up. However, the rebate programs put in place by the state and federal governments can reduce this cost by 40% to 60% depending on the city and neighborhood where you live. Typically, the cost of installation of the home solar system is completely regained over a period of a few years through reductions in the price of the electric bill each month. The sales advantages of the home-based solar system is it reduces the carbon footprint of the consumer as well as the cost the consumer pays for energy sources such as natural gas used for heating as well as the cost of electricity for appliances, lighting and cooling.

In addition, the federal government allows for a tax rebate on the installation of the solar systems so there is an even greater savings on the tax bill each year. Residential users of solar panels are allowed to take a 30% tax credit through the federal government and the state of California offers additional rebates on top of that. If for example, a resident of California installs a solar water heater (means that hot water for the home is generated entirely from solar energy) there is a 30% rebate (money paid back to the client) for the purchase and installation of that hot water heater.

In California there are many new incentive programs available to residential homeowners to install solar energy in their home. These new programs include:

New Solar Homes Partnership (NSHP).PG&E has been successful in connecting nearly 30% of the nation’s solar customers to the electric power grid. (This statistic also shows that a majority of residential solar power users are in California since PG&E is based in California. Available to customers of PG&E, NSHP is a cash incentive for builders of new residential buildings. (This means that if a new home is built by a home developer or builder and they use solar energy technologies, the cost of the building the home can be significantly reduced based on the lower cost of energy use for the purchaser of the home).

Single-family Affordable Solar Housing (SASH) This program provides funds for low-income residences installing PV systems. Rebates for this program are so high that it’s essentially a free solar system to the purchaser of the solar equipment. To qualify for this program the residential client must be of a low income level.

Multifamily Affordable Solar Housing (MASH)Similar to SASH, the MASH program provides incentives for low-income multifamily residential dwellings. This program has already benefited 4,213 Californian tenants and property owners to date.

Property Tax Exclusion for SolarCalifornia currently provides 100% exclusion (means they don't have to pay taxes for their house) of property taxes on installed solar electrical systems and components. Systems must be installed by December 30, 2016. Also eligible are solar water heaters, solar thermal electricity and solar mechanical energy.

Energy Efficient Mortgage (EEM)Through a program offered by the federal agency Housing and Urban Development (HUD) the costs to install solar systems on homes can be added to mortgages without increasing the down payment required, thanks to the federal EEM program.

Financing Initiative for Renewable and Solar Technology (FIRST)The city of Oakland has developed a program that first began in Berkeley, where homeowners can pay an increased level of property taxes in exchange for upfront city-funded financing of their solar electrical installations.

Role of the Energy Company

In California, the energy companies provide a service called an “energy audit” and an inspector will come to the client's home and suggest energy efficient upgrades to the home based on solar power. Typically the audit suggests that a residential user should install tighter insulation around their doors and windows, provide duct sealing in heating and cooling vents, possibly replace the windows to a more energy efficient insulated technology, as well as the possibility to install new heating and cooling systems that are tied to the energy generated by the solar panels on the roof of the house. Solar based systems are not just the solar panels themselves, but also the technologies used within the house to take advantage of the solar technology. Simple solutions for energy efficiency in the home could involve putting plastic insulation over windows to keep hot or cold air from entering from the outside or running hot water for baths and showers at certain times within the day to take advantage of peak generation periods from the solar panels.

The energy companies provide rebates to the customer based on the amount of electric power generated by the home based solar system. For example, California energy companies and utility providers such as Pacific Gas & Electric or Southern California Edison will pay about $0.65 per watt of solar power generated by the individual as a rebate on the bill of the customer each month. Some electric utilities (Such as Alameda Municipal Power) will pay about $2.25 per watt of solar power based on increased need in that area, so the price for rebates can vary by location. Incentives for new solar systems are usually disbursed in one of two methods: as a single sum at the time of installation of the solar technology and based on estimated output of the system, or in payments over the course of five years based on the actual (measured) efficiency of the system.

The Cost of Solar Panels is Going Down

Due to the high demand for solar panels and the lowering of cost through outsourcing to countries like China, the cost of purchasing the solar panel technology and equipment is decreasing rapidly. The increasing popularity of solar or photovoltaic (PV) electrical systems is pushing for cheaper and more efficient technology in the market place.
In 2010 the cost of solar panels dropped by 40% from a wholesale price between $3.50 and $4.00 per watt to as low as $1.75 per watt.
Government and state rebate programs have driven the cost of installing a home-based solar system even lower.

The Opportunity

The State of California is experiencing much success with its programs for home-based or residential solar systems. Energy generation is based on green technology from natural resources (the sun) and there is limited reliance on fossil fuels so the carbon footprint is reduced. The residential user of solar energy will have significant savings on their utility bills and also have the capacity to sell additional power generated from their home based system back to the grid for an additional savings on their utility bill. The energy utility is able to increase its generation of solar power through small contributions from each homeowner and this reduces the amount of coal burned for electrical power or nuclear power used to generate electricity.

The only drawback is the initial cost of installing the solar technology ? and this cost is dropping dramatically each year ? but even the cost of initial installation is almost reduced to zero over time through savings on the residential customers electric bill if they have solar technology installed in their home.

Key Concepts and Sources:

California Solar Initiative: www.gosolarcalifornia.org
US Housing and Urban Development (HUD): www.hud.gov
Pacific Gas & Electric (PG&E): www.pge.com
Southern California Edison: www.sce.com
San Diego Gas & Electric: www.sdge.com
Alameda Municipal Power: www.alamedamp.com

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