Solar as a Standard Feature
Volume 5, Issue 14

As solar panel costs continue to fall, more and more builders are offering solar as a standard feature. Consumers are asking for it and building codes are requiring energy efficiency and renewable energy products for new construction. Solar power is a logical technology and is becoming so affordable that paybacks can be as low as three years. After that, the homeowner owns the power. As they say, ‘it’s the new granite countertop’ and people love their granite countertops. But a granite counter can’t pay your electricity bills, solar panels can.

We expect this trend to continue, especially since the return on investment for builders, developers and home owners is significant. We recently opened a new community with JMC Homes in Lincoln, CA that offers all new homes with solar as standard. The community has 150 homes with 1.5 kW Canadian Solar Standard on every home and the opportunity to upgrade to as much as 5 kW. The estimated annual energy savings for a home with a 5 kW system is about $1,700 a year or $142 per month. Tax credits totaling about $2,500 are also available for most homeowners.

In another example, Olson Homes recently opened Oakgrove Walk in La Verne, CA, also offering solar as a standard feature for all homes, which even exceed Title 24 standards by 15 percent. These homes also feature inset, solar electric installations and Eagle Tile brand S-curve and flat tile roofing material. Other green features include Energy Star appliances, low-VOC interior paint and space-saving tankless water heaters. These items, among many others, contribute to the overall environmentally-driven design of the community and are designed to be LEED Certified by the U.S. Green Building Council (USGBC). Each home features a 1.5 kW solar system, fully integrated and is pre-engineered to accommodate an upgraded system of 2 kW. The estimated annual energy savings for a home with a 2 kW system is about $965 a year or $80 a month. Tax credits totaling about $1,300 are also available for most homeowners.

In Palm Springs, CA, where the sun shines 350 days a year, Far West Industries recently opened the new mid-century modern community called Murano, offering all new homes with solar as standard. The community has 42 homes with 4.0 kW Canadian Solar Standard on every home. The estimated annual energy savings for a home with a 4 kW system is about $1,980 a year or $165 a month. Federal tax credits totaling about $2,500 are also available for most homeowners with solar roofing. Additionally, estimated 5 year savings can total up to $10,296.

With examples such as this, it’s very easy for builders to tie affordability and savings back to consumers, who are starting to demand solar more and more. Projects such as this also prove that it’s financially feasible – which benefits everyone involved. Thanks to great pricing and shorter paybacks, builders and homeowners especially can reap all the benefits and long-term value by installing solar, without having to use third-party or leases.

The ROI for customers is also significant, particularly since the price of solar continues to drop as utility rates continue to rise. “In much of the country, the Geostellar Solar Index shows that homeowners can actually generate more wealth with solar panels than stocks, bonds, CDs or other investments,” said David Levine, founder and CEO of Geostellar. “The index’s findings show residential solar power is not only viable, it’s a wise investment.”

According to the Geostellar Solar Index, the Northeast and Mid-Atlantic states offer the highest Internal Rate of Return on residential solar energy, with profits as high as 24 percent per year over the life of the solar array. By comparison, the S&P 500 has shown a 9.9 percent Compounded Annual Growth Rate over the past five decades. In a total of 33 states, solar offers better returns on investment than 30-year U.S. Treasuries, which have a current yield of 3.7 percent. And in 43 states, solar offers better returns on investment than five-year certificates of deposit (CDs), which typically return just 0.75 percent annually.

The payback periods have also dropped significantly. “Residents of the top states in the index can see their investment would be completely paid back in four to six years, and then receive free energy worth another five times that amount,” said Mark Wirt, Geostellar’s senior analyst. “The wide spread between solar and conventional electricity in some markets has created broader opportunities for third-party financing and zero-money down offers, where institutions become co-investors with the homeowner, providing upfront money and participating in the yields.”

And once a solar power system is paid off, it can add a tremendous amount of resale value to a home. People are keyed in to what solar energy does for their pocketbook and the efficiency of their home. If a buyer has to choose from a home that has zero energy bills versus one that doesn't, it's a no-brainer.

In addition, an increasing number of buyers looking to purchase new homes are opting for solar-ready residences. “You’re going to see a transition from novelty, to granite countertops, to mainstream option,” remarked Tom Werner, president and CEO of solar panel supplier SunPower, in a recent interview with Bloomberg.com. “We’re rapidly passing the equivalent of a ‘countertops decision’ to a ‘no-brainer.’ You just do it.”

Solar is economically advantageous not only for individual consumers, but also for the nation as a whole. The steady rise in demand for solar from American consumers has resulted in more work for solar installation companies based here. And with some installation companies making the decision to source American-made solar products, manufacturers based in the United States are also benefiting. It’s expected that the prices will come down even more in the years to come. Photovoltaic manufacturing in the United States may also increase significantly in the coming years as technological innovations come about that will level the playing field with China. This is good news for American builders and homeowners.