SOLAR POWER COMES OF AGE / Light-sensitive panels today are a boon to the wallet as well as the environment

San Francisco Chronicle
Light-sensitive panels today are a boon to the wallet as well as the environment

Dana Perrigan, Special to The Chronicle

Sunday, April 15, 2007

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During the disco days of the 1970s, a few brave pioneers began installing solar panels on the roofs of their homes. With the enthusiasm of the newly converted, they explained to their incredulous neighbors that the flat, black objects would harness the power of the sun to provide the family with hot water.

The neighbors, no doubt, reacted much as if their acquaintance had insisted on demonstrating his newly acquired magic skills by sawing his wife in half: They nodded their heads in wary approval — and made a silent vow to immediately install a more secure lock on the side gate.

Now, 30-odd years later, California is the third-largest market for solar power systems — behind Germany and Japan. Eighty-five percent of all systems installed in the nation are here. Due to a growing concern for the environment and rising energy costs — as well as the economic incentives provided by state legislation and federal tax credits — droves of homeowners and business owners are following in the footsteps of those early pioneers.

A further sign of this booming trend is that some developers have even started incorporating solar power as a standard feature in their new subdivisions.

“Some of them have had to be dragged kicking and screaming into it,” says Gary Gerber, president of Sun Light & Power in Berkeley, “while others have seen the advantages and recognized that this is actually a sales tool for them. Once that gets going, they’ll all jump on board.”

Aaron Nitzkin, vice president of Old Country Roofing’s solar division in Vacaville, agrees.

“What’s really driving the growth now is competition,” Nitzkin says. “It’s the next granite countertop. In five to seven years, all roofing companies will be doing solar — or they won’t be in business.”

The largest roofing contractor in Northern California, Old Country Roofing built its first solar roof in 2001 in Sacramento. Since then, the company has installed several hundred. Two months ago, it opened a solar division.

“Basically,” Nitzkin says, “we put our toes in the water and learned the market. I believe that in five to seven years, solar will be standard on all new homes.”

The largest developer of residential properties in the East Bay, Lennar Bay Area Homebuilding, recently completed the first community of new homes in the Bay Area built with a roof-integrated solar electric system. Located in Danville, the 77 homes range in size from 3,673 to 4,243 square feet and are priced at about $1.3 million.

The company is building an additional 250 homes equipped with solar power systems, priced at $900,000, in San Ramon.

“I think consumer demand is increasing as people become more aware of the technology,” says Bill Kelly, general manager of the new-home division of San Jose’s SunPower, which designed and built the solar power systems for the Lennar homes. “I don’t know of any other feature in the home that provides monthly savings to homeowners.”

It’s also a boon for the environment. While the early solar power systems were primarily thermal and provided hot water, most of those now being installed are photovoltaic, which generate electricity. A government study concludes that, when compared with electricity produced by fossil fuels, each kilowatt of solar-produced electricity offsets up to 830 pounds of nitrogen oxides, 1,500 pounds of sulfur dioxide and 217,000 pounds of carbon dioxide each year.

Even for those who aren’t especially concerned with the environmental benefits of solar power, the economic benefits are impossible to ignore. The cost of a system for an average home, says Sun Light & Power’s Gerber, is about $29,000. Subtract about $7,000 for the state rebate, which is currently based on how much electricity the system is capable of producing. Subtract an additional $2,000 for the federal tax credit, and the cost is reduced to $20,000. Over the 25- to 30-year life span of the system, the homeowner will save — based on current electrical rates and a conservative estimate of a 6 percent annual inflation rate for future costs — about $60,000 in electricity. After subtracting the system’s cost, the bottom line is $40,000 in savings.

The bottom line is also influenced by the tier rate system used by utility companies. Excess electricity produced by a homeowner’s solar power system is funneled into the utility’s grid. The homeowner receives a credit based on when the electricity was produced. If it was produced during the peak hours of summer, the homeowner is credited at the higher rate of about 45 cents per kilowatt-hour. That credit offsets power used by the homeowner during winter months, for which he or she pays only about 14 cents per kilowatt-hour. “You save about three times what you spend,” says Gerber. “That’s what a lot of people don’t get.”

Sherry Boschert, the owner of a 1,200-square-foot home in San Francisco’s Inner Sunset neighborhood, has been getting it for quite awhile now. Boschert, who is also president of the S.F. Electrical Vehicles Association, upgraded her old system with a 4.8-kilowatt unit in 2002. Now, less than five years later, Boschert has nearly recouped the $27,000 she spent on the new system.

The system even provides all the electricity for her electric car.

“Once you start making electricity from the sun,” Boschert says, “you say, ‘What else can I plug in?’ ”

While the bulk of new solar power systems are retrofits on existing homes, Gerber says, an increasing number of businesses are seeing the advantages as well.

Give Something Back, an office supply company that — modeled after Newman’s Own — donates its profits to nonprofits, installed a 50-kilowatt solar power system at its 20,000-square-foot headquarters in Oakland. The $450,000 cost of the system was ameliorated by a $167,000 rebate and $80,000 in federal tax credits.

“Economically, it’s very, very viable, says the company’s president, Mike Hannigan. “It cuts our energy costs in half. It’s probably saving us $1,500 a month.”

Initially, Hannigan says, the company expected to recoup the entire cost of the system in 10 or 11 years. Now, with rising energy costs, he expects it will take half that time.

“What was originally a decision based on environmental reasons turns out not be inconsistent with the corporate mission,” Hannigan says.

Urban Pacific Properties, which manages Mission Plaza apartments in San Francisco, expects similar benefits on its recently installed 47-kilowatt system. Owned by Mission Plaza Limited Partnership, the 132 units are home to 180 elderly and disabled residents and their families. Urban Pacific had installed a solar thermal system to provide hot water back in 1982. When it became time to replace the roof, management — hoping to reduce its monthly $5,000 electrical bill — decided to also add a photovoltaic system.

“Once we get into the summer months we’ll be able to see how much more efficient it is,” says Kereen Stoll of Urban Pacific Properties. “Electricity is the biggest cost for Mission Plaza.”

In a couple of years, Gerber expects that half of the 150,000 single-family residences built in the state each year will be equipped with solar technology.

“I think a huge percentage of future development will be solar powered,” he says. “It’s in its infancy now.”

One of the founders of Sun Light & Power in 1976, Gerber — a former mechanical engineering student who left his master’s studies program at UC Berkeley to work with an architect who was designing solar homes — remembers its conception.

“It was so unbelievable. Our main business was educating people about what was possible,” he says. “Most of our customers back then were pioneers — just as we were pioneers.”

A mini-boom sparked by the oil embargo of 1979 came to a screeching halt with the election of Ronald Reagan. The new president eliminated the tax credit for alternative energy that President Carter had enacted. To add insult to injury, Reagan had the solar power system removed from the White House roof.

State legislation passed in 1998 — which was mostly about allowing utility companies to recoup their losses related to the abandonment of nuclear energy — earmarked 10 percent of $500 million allocated for all renewal types of energy for solar.

“So that was really the beginning of what’s turned into a stampede,” Gerber says. “It was all started with $50 million, which is a pittance when you think about it.”

Gerber, who struggled through the lean years, says his company did about $12 million in business last year.

“Solar has become more popular,” he says. “People aren’t as afraid of it. They don’t question it. It’s not the iffy proposal it once was.”

E-mail Dana Perrigan at perrigan2000@yahoo.com.

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