People often ask why I want solar and I always respond, “Why not? The sun is free.” Think of that earth-scorching summer heat. Why not turn it into something that can benefit me economically and simultaneously help save this planet for our grandchildren?
Today, because of global warming, dry days are drier, wet days are wetter, hot days are hotter and cold days are colder. Our air conditioners, furnaces and heat pumps are working longer each day and more days each year. The March 8, 2017 Rossmoor News recently reported the “bill shock” experienced by many Rossmoor residents due to PG&E’s recent rate increase. No matter how consciously you try to conserve, you still end up paying more every year. The impact of utility rate increases would be minimal if we all had solar panels on our roofs.
Cost of rooftop solar
Another frequent comment I heard about rooftop solar is “it’s expensive.” People may like the idea of harvesting free solar energy and they may also care about the environment, but are discouraged by the upfront purchase and installation costs. However, with the advancement of technology and the state and federal policies that promote renewable energy, prices of residential solar energy systems are no longer unreachable for many of us.
When California established the Million Solar Roofs Initiative in 2006, the ultimate goal envisioned by state policy makers was to make solar energy readily available and cost-competitive to the state’s residents and businesses. It was the most ambitious solar energy policy ever introduced in the United States. The initiative provided $3.3 billion in funding to support the installation of one million solar energy systems on homes and businesses over a 10-year period. That would generate an estimated 3,000 megawatts of new solar energy, equivalent to about 40 peaking power plants.
The idea behind the initiative was to use financial incentives to stimulate growth and demand in the solar energy market. Over time, as experience, innovation and competition grew, prices would drop. As prices dropped to a level where they could compete with investor-owned utilities, the solar industry would become self-sustainable and the incentives would discontinue. According to a 2015 report published by the Environment California Research and Policy Center titled “California’s Solar Success Story,” the average cost of a residential solar system was $9.68 per watt in May 2007 when the incentive program began. By June 2014, the average price had dropped to $5.32/watt. The price of a non-residential system was $8.86/watt in 2007, and by 2014, the price declined 50 percent to $4.32/watt.
Federal tax credit
In 2015, Congress extended the federal Solar Investment Tax Credit for residential homes for five more years. Taxpayers can receive tax credits equal to 30 percent of the cost invested in solar energy system if construction begins before the end of 2019. For example, if your total cost to have solar panels installed on your roof is $20,000 and the work begins between now and Dec. 31, 2019, you can get $6,000 deducted from the income tax you pay for the year in which the work started. So you basically get a 30 percent discount on the purchase price. The tax credit steps down to 25 percent in 2020 and 22 percent in 2021.
Cost vs. benefit
The financial benefits of going solar are now well documented. Many homeowners, including myself, see solar panels as an “investment” with strong rates of return. Utility rates will continue to rise and homeowners generating solar electricity can diminish ever-increasing electricity bills.
How soon a homeowner can break even on their solar investment depends on the capacity of their PV [PhotoVoltaic] system and electrical usage prior to the installation. Nationwide, the average time of return is five to 10 years. The system we had installed on the roof of our Danville home in 2010 would have paid for itself by next year had we not sold it and moved to Rossmoor.
Installing solar panels can also increase a home’s property value. Since a solar system reduces a home’s electricity costs, they make a home more attractive to buyers – similar to homes in good school districts and those with good home energy ratings. New York Times reported in February 2015 that a study conducted by the Lawrence Berkeley National Laboratory found that buyers were willing to pay a premium of $15,000 for a home with the average-size solar PV system.
Rooftop solar in condo communities
As Rossmoor residents may have learned, there are many obstacles in the path to acquiring residential solar power in condo communities. Efforts are underway to address some of those obstacles. Condo owners in larger buildings can also pool their resources and share the benefits, as is being done in Mutual 48. Due to limited space, these will have to be addressed in another column.
By Jennifer Mu
Jennifer Mu can be emailed at barnhartmu8833@ gmail.com.