December 29, 2008
Until now, to equip your home or business with solar power you had to come up with a lot of scratch up front. Unfortunately, that often left access to the technology to the financially well off, to the curious or to highly motivated tree huggers.
That appears to be changing. While the government casts about for a national energy policy, communities and utilities are experimenting with novel and more affordable ways to bring consumers and businesses into the sunlight.
The cities of Berkeley, Calif., and Boulder, Colo., are creating a national buzz with initiatives to allow property owners to install rooftop solar panels using city-backed loans. The loans are repaid over 20 years through special property-tax assessments. Utilities are also taking to the rooftops, though using a slightly different approach from the Berkeley fathers.
For example, Duke Energy and Southern California Edison plan to lease rooftop space from homeowners and businesses to install solar panels. They would retain ownership of the panels and run the generated electricity back through their grid systems. Rooftop models may not replace mega-solar farms. But the efforts, aimed at reducing steep infrastructure costs, show the public's rapid acceptance of solar technology -- alongside wind power -- as an alternative to dirtier, dwindling and increasingly costlier fossil fuels.
"This is sparking a solar energy revolution across the United States," says Neal Lurie, a spokesman for the American Solar Energy Society. "The up-front cost is the single biggest barrier for consumers who want to invest in solar technology."
Consumers, businesses and public utilities are also getting a break from the financial bailout bill signed into law in October. Among other things, it extends the 30 percent solar energy tax credit for eight years while authorizing $800 million in new, clean renewable energy bonds and removing the $2,000 cap on residential solar installations.
"There's more green to go green," Lurie says. "For homeowners that means the economics of solar are getting better every day."
The Berkeley plan, closely watched by cities throughout the United States and Europe, is leading the charge. A homeowner would hire a city-approved solar contractor to install the proper type of panels, depending on the size and shape of the home, at a cost of $15,000 to $20,000. The city would pay the up-front installation cost, less any state and federal rebates, and tack it to the homeowner's property-tax bill. The homeowner would have 20 years to pay it back. The city would keep costs manageable by financing the loans with low-interest bonds.
Economic Sense
The assessment, as well as the panels, would remain with the property and would be assumed by a subsequent buyer. The initiative passed by Berkeley voters to reduce the city's greenhouse gas emissions by 80 percent by 2050.
"It's the most important thing the city can do in the fight to reduce greenhouse emissions," says Mayor Tom Bates. The city hopes to raise $1.5 million to finance the pilot program, which would equip about 50 homes. If successful, the program would be expanded to encompass hundreds of homes.
One allure for homeowners is the chance to balance out the cost with savings on their monthly Pacific Gas & Electric bills.
But Severin Borenstein, director of the University of California Energy Institute, believes any savings is overblown. "As a financing mechanism I don't have a problem. But I'm worried they are going to tell people they are going to save money doing this, and for the vast majority of citizens that is not true." He notes the monthly cost to repay the city-backed loans is about $182, a bit more than the average monthly electric bill. Besides, he says, citizens may be adding cost to their mortgage for a device that depreciates.
Daniel Kammen, founding director of the Renewable and Appropriate Energy Laboratory at the University of California at Berkeley disagrees, saying that, in fact, citizens are increasing the value of their properties. "You can build in clean energy and pass it on to the next person who buys your property."
While the amount of initial savings may be debated, experts say the potential for future savings is less in dispute. That's part of the attraction for Boulder officials who recently approved a solar-panel initiative modeled on the Berkeley plan. "It's fair to assume that fossil fuel costs are going to continue to go up," says Lurie of the Boulder-based American Solar Energy Society. Lurie cited statistics that solar capacity has increased 41 percent per year since 2001, spawning millions of dollars in new investment.
"Technology will continue to drive down renewable fuel costs; so the economics make sense," Lurie says.
The rooftop revolution is not lost on utilities facing billions in costs to build gigantic solar farms and upgrade transmission lines. They also face state pressure to reduce emissions. Duke Energy plans to buy 16 megawatts of power from a solar farm to be built by SunEdison in North Carolina. Even so, it is investing in rooftop technology to test the savings potential. It expects that solar costs over time will come down while the cost of steel, concrete and other materials to build solar farms may keep going up.
So Duke wants to study the merits of distributing power generated from panels installed on existing homes, office buildings, malls and warehouses located in urban and rural areas. It's implementing pilot plan that will cost $100 million, include 850 sites and produce 16 megawatts, or enough to annually power 2,600 homes.
Utilities thus have two choices. They can build solar farms that serve a wide area. But that concept is expensive. Or, they can install rooftop panels, which don't need long transmission lines to work. But that offers a smaller scale of efficiency. Still, experts say the two models can complement one another.
Solar's expansion can be credited to innovation and progressive public policy. More green power is coming and probably to a neighborhood near you.
More information is available from Energy Central:
by Paul Wenske
Respond to the editor.
