Imagine a world where energy consumption is less of an issue. Where home-owners know exactly what their energy needs are and can produce the kilowatts themselves. In this world energy companies actually pay or credit the customer for supplying them with power. It’s the world we live in right now thanks to solar technology. For remodelers the question becomes how to profitably tap into this current and coming market demand.
In 1977, Robert Chew of Rhode Island was a contractor installing residential solar systems and sunrooms. Then, in the early ’80s, federal incentives for solar electric systems were dropped and he was forced to make a decision. In order to stay in the solar installation business and other earth-friendly products, Chew founded RemodelWrights, a design/build residential remodeling firm. Remodeling would be a way to keep his solar business.
“In the late ’90s incentive programs started popping up again,” says Tory Chew, Robert’s daughter who runs SolarWrights in Rhode Island. “Because my dad had so much experience working with solar he decided to focus back on his solar business and started SolarWrights.”
Today SolarWrights runs four offices that include one office in Barrington, R.I. covering Massachusetts and Rhode Island, and three offices in Connecticut, all focused on residential solar solutions. Since 2003, SolarWrights has installed over 200,000 watts of solar electric projects and the company continues to grow.
Inside the Technology
There are two main solar technologies that are available in the residential market. First there are photovoltaic devices that convert sunlight into electricity using semiconducting materials. These are the solar panels that are generally associated with solar products.
The other technology is solar heating which includes water and air heating. This is done by moving either air or water through a panel of heat absorbing metal tubes. This is considered a preheating process and can be piped into the home, stored in tanks or run through radiant heating systems.
Kilowatts are how solar production is measured, and in 2004 the total of United States domestic shipments of photovoltaic cells and modules was 78,346 kW compared to 11,188 kW in 1995. Within that decade alone approximately 301,530 kW of cells and modules were shipped according to the Energy Information Administration, a statistical agency of the U.S. Department of Energy.
“A residential solar system is a real security factor for homeowners to know they’ll have enough power,” says Noah Kaye, policy and communications coordinator for the Solar Energy Industries Association (SEIA). “It’s kind of like buying a car that comes with all the gasoline you’ll need for the next 25 years.”
The SEIA reports that for the past five years the solar industry has seen a growth rate of 35 percent annually with production output being doubled between 2003 and 2005. But unlike the old paradigm of being completely off the power grid and using batteries to store excess power, the paradigm has shifted. In 2004, 82 percent of solar homes were on-grid installations.
“The peak time for power is midday when air conditioners are running and businesses are open,” says Kaye. “Remaining on-grid allows homeowners to feed excess energy back into the grid. The power companies then pay the homeowner or credit them should they ever need to draw power from the grid due to cloudy days or large energy use.”
Shifting the Trend
“There are three things pushing the residential solar market,” says Terry Bailey, senior vice president of marketing and sales for Evergreen Solar, “energy rates, subsidiaries and the amount of sun available.”
Residential solar products are continuing to grow in the marketplace as well as turn up on more and more homes. Solar is not something being pushed by manufacturers, but something consumers are asking for based to two main factors: economical and environmental. With information available at the touch of the keyboard, homeowners are educating themselves with the problems at hand and how they can solve them.
“We’re seeing a lot of people concerned over the cost of energy,” says Tory Chew. “With increased state and federal funding for renewable energy, it just makes financial sense for them.”
Chew also indicates that even though the demographic has changed focus from the environmentalist to the economist looking for solar, there is still the huge trend of green building that continues to fuel the market. Vic Abate, vice president of renewables for GE Energy, says that the two may actually go hand in hand.
“Economics have really pushed toward greener building,” says Abate. “Consumers are looking for more energy- efficient means of living that include green products. There is even a move toward self-sufficient, energy-free communities.”
It’s no secret that the sun can help out a homeowner in saving some money. Through generating solar electricity and heating, these systems can help to lower their monthly bills, but it still can be costly to purchase. More and more homeowners are opting to roll over the costs of these systems into their mortgages, allowing them to be cash flow positive on the first day of their mortgage.
“The technology costs are dropping,” says Marc Cortez, director of marketing for Sharp Electronics Solar Energy Solutions Group. “The costs are due to a raw materials problem with a short supply of silicon.”
There are several companies making contributions to the residential solar market — big name electronic and energy companies like Shell, Sharp, BP, Kyocera and GE for example, plus dozens of mid-size and smaller companies. But even with all of these companies manufacturing and inventing for the solar market, the call for these products is overwhelming.
“The industry is sold out,” says Abate. “Demand exceeds supply and subsidiaries only keep it moving in that direction.”
In the late ’90s, several states started enacting their own programs for renewable energy solutions. This returned a push toward solar products in parts of the country that had been lackluster for nearly two decades. Then as part of the 2005 Energy bill, the federal government instated a credit program for homeowners as incentive to look at renewable energy (see sidebar on pg. 45).
“One of the key components in the residential solar market right now is the retrofitting area,” says Kaye. “That is adding solar to an existing home and has been 95 percent of the market since the ’70s.”
One of the new technologies that homeowners are really latching onto is integrated solar roofing systems. These systems are low-profile modules designed for cement tiled roofs and take the place of several tiles, mounting directly to the roofing structure. These tend to be more aesthetically pleasing than offset solar panels and can blend more easily into the look of a home.
“We carry a 25- year warranty on our modules,” says Cortez. “That means the integrated solar tiles will last longer than the roof.”
Powering the Future
“I can see solar on a significant number of homes in the United States,” says Bailey. “Along with that, I see more variance on the solar products and more integrated systems.”
California currently dominates the U.S. solar market usage at 75 percent, but still solar only contributed to 1 percent of their renewable electricity generation market share according to the EIA.
Residential solar products continue growing in the market, and homeowners persist in looking to them for economical and environmental solutions. Besides California the regions that have focused on incentives and allowed solar to take off include the Northeast and Southwest. Finding out what an individual state offers its residents, plus the new federal tax credit, will certainly help in selling solar to a homeowner.
“More aesthetically focused systems that you can’t tell are there will win in the future,” says Abate. “Style is a big thing and we’ll see more systems built into the home instead of offset systems.”
Homeowners are already taking a bigger interest in their energy use. SEIA expects to see 1.5 million solar homes built over the next 10 years as more homeowners take advantage of the cost savings. A solar system allows them to monitor and be conscience of their usage, as well as supply power back into the grid.
“Solar use is growing,” says Abate. “But it’s still a small slice of the big energy pie.” |
Established in 1995, the Database of State Incentives for Renewable Energy (DSIRE) is an ongoing project of the Interstate Renewable Energy Council (IREC), funded by the U.S. Department of Energy and managed by the North Carolina Solar Center .
By visiting its website (www.dsireusa.org), consumers can click on their state to find any state or corporate run programs that they may apply for, whether they be tax credits or exemptions; rebates, loan or grant programs; or production incentives.
In addition to the state and corporate run programs, the federal government has inacted a personal tax credit. This is the first federally funded program in almost two decades in the United States.
The Energy Policy Act of 2005 (H.R. 6, Sec. 1335) establishes a 30 percent tax credit up to $2,000 for the purchase and installation of residential photovoltaic (solar electric) and solar water heating property. An individual can take both a 30 percent credit up to the $2,000 cap for a photovoltaics system and a 30 percent credit up to a separate $2,000 cap for a solar water heating system. A 30 percent credit up to $500 per 0.5 kW is also available for fuel cells.
Also available from SEIA is its Guide to Federal Tax Incentives. Designed to assist solar companies and consumers in claiming new federal tax credits for solar energy, this guide can be downloaded from its website (www.seia.org).
Source: Database of State Incentives for Renewable Energy (DSIRE)