September 5, 2014

Solar is the new gold standard in home improvements!

Remember in the early 2000s, when granite countertops became the foundation of nearly every kitchen renovation? Well, a new decade of home renovations has arrived and it looks like solar panels are the new granite!

SunPower Corporation has estimated that nearly six of the ten largest homebuilders in the U.S. now include photovoltaic devices (solar panels) as part of their construction. California, in particular, is leading this solar system renovation revolution. Two of its cities now mandate installations of solar energy systems in new home construction. According to Solar Energy Industries Association, the demand for solar panel installations will rise 56% this year alone!

Jim Petersen, chief executive of Peterson Dean Inc., explained in an interview:

In the next six months, homebuilders in California, and the expensive-energy states will be going solar as a standard, incorporating it into the cost of the home like any other feature.

The upfront costs of solar are a small expense for the large returns in energy savings down the road. And, if you install solar panels before the house is complete, the whole installation can be 20% cheaper. These very savings are challenging traditional acceptances of high electric bills, causing large-scale power companies, such as Edison International of California, to turn their heads.

In fact, power companies are struggling to keep up with the falling price of solar systems geared towards homes and other residential projects. According to a Washington-based solar association, the cost per watt in the first quarter has dropped to around $4.93, down 16% from last year.

Tom Werner, CEO of SunPower in San Jose, California, explains that “A 3-kilowatt system, enough to power a typical mid-size home, costs less than $15,000 and can be rolled into a mortgage…you embed it into your home mortgage, you’re cash flow positive month one”. Taking all of these benefits into account, the cost of solar is not far off from the $5,000 to $10,000 homeowners have been spending on upgrading their kitchen countertops.

According to Werner, solar is quickly becoming more than just an optional upgrade. “You’re going to see a transition from novelty, to granite countertops, to [the] mainstream option,” Werner told in an interview. “We’re rapidly [becoming] a ‘no-brainer.’ You just do it.” More and more homes subsist on the power generated by their own resources. With aid of federal and state incentives, those who choose solar today are spending less on electricity from than their neighbors who don’t.

Unfortunately, with more people choosing solar, the power grid is jeopardized. The revenue may not be sufficient to continue with its current infrastructure. Following suite, utilities are raising prices, which increases the burden to people who don’t own solar.

Petersen Dean, installed solar systems on about 7.5 percent of their roofs built last year, CEO Peterson said he plans to double this figure by next year He explained:

We’ve picked up at least a dozen new subdivisions since mid-March, and all of them have incorporated it into the cost of construction. Solar may indeed be the new granite.

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