Solar Housing Tracts Taking a Place in Sun

By ERIC BAILEY

June 26, 2001 12 AM PT

TIMES STAFF WRITER

SAN DIEGO —

Tom Day sees a lot to love about his family’s brand new house. Perched in a high-end subdivision on this city’s booming northeast fringe, the dun-hued Mediterranean boasts a castle-turret entry, a lofty master suite, a mesa-top view.

But aesthetics aren’t all that attracted Day. His new home will also help pay the power bill.

With photovoltaic panels atop a triangle of south-facing tile roof and a solar water heater perched along a western ridge, the two-story house is part of a quiet revolution taking shape in these times of energy anemia.

The Day clan just moved into one of California’s first solar subdivisions, a new home development that attempts on a mass-production scale to tap the sun’s energy--and offset residential utility bills that have been soaring toward the ozone layer.

For the solar industry, it is another important step in an uphill slog for respectability. Energy experts say solar’s future could well hinge on whether the building industry embraces it for the thousands of new homes, offices and commercial structures erected each year in the Golden State.

Several factors have conspired to make solar an option for builders.

The cost of photovoltaic panels, the thin silicon wafers that turn photons of light into electricity, has dropped dramatically in the last decade. Meanwhile, newly pumped-up government subsidies and skyrocketing electric bills in California have made solar energy tantalizingly competitive with electricity produced by smokestack power plants.

A study at Princeton University concluded earlier this year that two key states--California and New York--are ripe for explosive growth in solar. Both share the right combination of high electricity prices and white-hot housing markets.

In California, about 150,000 new homes are built in a typical year. If each carried a standard 2-kilowatt photovoltaic system, it would eliminate the need for a 300-megawatt power plant.

“I really think builders are starting to come around,” said V. John White, lobbyist for a solar coalition. “We need solar to be like a carpet upgrade or landscaping improvement.”

Tom Day and his family are some of the first home-buying pioneers to reap the benefits.

At his old house, Day saw energy costs soar to $500 one recent month. So solar’s clean, inflation-proof power was a no-brainer. Rolling blackouts are no longer a worry.

Building solar into new homes has distinct advantages over slapping panels on an existing roof, the standard practice for a generation.

On a new home such as Day’s, the system can be designed into the project from the ground up. Installation is less expensive, what with electricians and plumbers already on site. Costs to the developer, Shea Homes, were cut because the solar panels for the subdivision were purchased in bulk.

Day, meanwhile, avoided a huge upfront hit. To install solar on an existing home, the bill can rise as high as $20,000 or more without a government rebates. Day had to pay $6,000. Best of all, he rolled it all into the mortgage for his new home at a low interest rate. His electricity costs pencil out much better because of that long-term financing.

The system also adds resale value to his house, no small consideration in a state where homeowners tend to move about every five years.

More immediately, he looks forward to watching his electric meter spin backward on occasions when the system generates more juice than the family uses. On average, the 1.2-kilowatt panels should provide a third of the family’s electricity. And when the sun isn’t shining, the Days’ power comes off the grid.

“When we heard solar was available,” said Day, “we absolutely jumped at it.”

Industry Cites Reasons for Caution

But even with the energy crisis, builders aren’t diving wildly into solar. The reluctance springs from concerns about further hiking building costs, lingering questions about solar’s allure to buyers and legal worries in a state crowded with construction-defect lawyers.

Some buyers would still prefer vaulted ceilings and wood floors to a solar panel. Even at Shea Homes, which has seen its solar houses sell briskly, officials want more market analysis before fully committing to photovotaics for developments still on the drawing board.

“We hope to do more,” said Ryan Green, Shea’s community development manager. “But if we put in solar and people don’t want it, they’ll go somewhere else.”

Solar is a standard feature on 100 houses in Shea’s Scripps Highlands development. Another 160 offer it as an option to home buyers.

But a few never had a chance. Joanna Staikopoulos lives just up the street from Tom Day. Her home was in the development’s first phase, when solar wasn’t offered.

She’s dejected, but talks of approaching Shea to ask that panels be fitted after the fact.

“We would love to have it,” said Staikopoulos, a postal clerk. In her native Greece, she said, “every home has solar. It’s wonderful.”

At Shea’s solar subdivision, one of two buyers snap it up, said Pamela Beaird, a sales associate. And that’s without much prodding.

“I don’t try to push it,” Beaird said. She also avoids estimates of power or financial savings. The calculus can vary so widely depending on a homeowner’s energy use, Beaird said, “we don’t go there.”

Though the development community forges cautiously forward, subsidies from the state and some utilities are slicing away a big chunk of financial risk.

The Sacramento Municipal Utility District offers one of the nation’s most aggressive solar programs, and has stimulated several new-home projects. Solar is also spilling into adjoining counties. Last week, U.S. Homes announced plans to build the nation’s biggest solar subdivision, with photovoltaics on 917 homes in nearby Placer County.

The Sacramento utility district can put a 2-kilowatt system atop a customer’s roof for $4,800--about a quarter the unsubsidized retail rate. That subsidy program helped lure a photovoltaic assembly plant to the capital city, boosting availability of panels.

In Los Angeles, the Department of Water and Power accomplished a similar feat, offering incentives that helped convince Siemens Solar Industries to build a plant in town.

But the biggest constraint in California remains a lack of manufacturing capacity, said Don Osborne, the Sacramento utility district’s renewable generation superintendent. “Anything we can do to stimulate new production is going to help lower the costs for PV and help our subsidy dollars go further.”

Or be eliminated entirely. The goal of solar advocates is to expand the U.S. market so photovoltaics can compete without the government subsidies that have long been a prop.

Such market-building is no easy task. The solar industry has seen boom and bust cycles before, most notably when subsidies evaporated after the 1970s energy crisis. Some boosters fear a similar scenario when the current problems fade. Instead of blindly ratcheting up production, company executives are putting a premium on sustainable business growth.

Howard Wenger, a vice president at Delaware-based AstroPower Inc., one of the nation’s largest photovoltaic manufacturers, compares PV to development of the personal computer: “The first ones were very expensive, but they got more efficient and prices came down. We need to follow the same path.”

Mixed Signals From Washington

Meanwhile, Washington is rife with mixed signals about solar. Congress is now eyeing a 15% tax credit. But the Bush administration’s new energy policy focuses on fossil fuels. Moreover, the president irked solar advocates by threatening to slash funds for renewable energy research.

In California, conflicting agendas also rule. Though state lawmakers are pushing further subsidies and loans for solar, Gov. Gray Davis has focused on traditional power sources to drag the state out of the current mess; 95% of the new energy production will be fueled by natural gas.

“This approach is frightening,” said Daniel M. Kammen, director at UC Berkeley’s Renewable and Appropriate Energy Laboratory. “If we learned anything from the oil crisis in the ‘70s, it’s that diversity is our only insurance. We’re setting ourselves up again for crisis.”

Instead of erecting smokestack behemoths, the state should help build an army of rooftop solar systems and windmill farms, Kammen said. “It would be like turning off Niagara Falls and replacing it with a bunch of little waterfalls.”

Kammen and others say government needs to do more. Solar boosters want a federal mandate that power producers generate a portion of their electricity--perhaps as much as 20%--from nonpolluting sources like solar, wind and geothermal.

Changes in energy billing could also help. Solar fares well under the growing practice of “real-time pricing,” charging more for electricity used during peak hours. Photovoltaics work best in the afternoon when demand is highest.

Though residential customers aren’t now subject to such peak pricing, large commercial buildings face it, making solar an option to cut costs. One company, PowerLight Corp. of Berkeley, expects to see a 400% increase in production of its commercial rooftop panels.

“There’s this perception that PV is not ready for prime time,” said Kari Smith, PowerLight’s regulatory affairs manager. “We want to demonstrate to the state that it’s viable and ready to go.”

Some of the nation’s biggest utilities haven’t been much help to solar. Among the testiest sticking points has been net metering--the practice of letting homeowners sell excess solar electricity back to the grid.

Private utilities have long feared that rooftop solar could dent their balance sheets. Though about 30 states, including California, now permit net metering, most allow a homeowner to sell back only enough electricity to break even. Many also cap the total amount of net metering at 0.1% of a utility’s total peak demand, further hindering the potential growth of solar.

Much of that could be rendered moot, solar boosters say, if builders get into the game in a big way. Factories would sprout, production would skyrocket, prices would fall.

“It’s akin to landing the Mayflower,” Osborne said. “It’s the settlement of a New World.”

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