A solar deal for you

With the latest rebates, using sunshine for power begins to make sense.

Long Beach Press Telegram

January 17, 2006

California's utility regulators have approved the biggest solar program in U.S. history, and within a decade there should be a million rooftops turning sunshine into electricity.

What the Public Utilities Commission did last week was to create subsidies for photovoltaic solar systems to be financed by a surcharge on gas and electricity bills averaging $12 a year per residence. The subsidies will be in the form of a rebate of $2.80 per watt of capacity installed, declining over 10 years to 25 cents in 2016.

But let's see what this actually will mean in your neighborhood. If you happen to live near the home of Alan and Norma Williamson in Cerritos, you've probably seen the shiny 4-by-8-foot panels on the roof of their two-story home. The panels have reduced their utility bills to zero.

That's unusual, but here's how they did it. The Williamsons installed a 6-kilowatt photovoltaic electric system for $14,000 (net after rebates); $13,000 worth of dual-pane windows to cut heat loss and gain; $2,000 in added insulation; a $5,000 heat-pump to replace their old gas furnace heating system and to supply air conditioning; and a $2,000 solar water-heating system, for a total of $36,000.

Since they drive a Toyota RAV4 electric vehicle, they simply plug it in to recharge at night at no cost, because they have earned credits from Southern California Edison during the day by generating more electricity than they used. For the past couple of years they have eliminated their gasoline costs of $200 a month, as well as their utilities, which averaged $200 for electricity and $100 for natural gas, for a total of $6,000 a year. At that rate, their system will be paid for in six years.

Most families don't go quite that far. More typically, they will buy a 3-kilowatt solar system for $25,000, which entitles them to a rebate of $8,400 ($2.80 per watt), and federal tax credits of about $2,000. Since they won't eliminate all utility (or gasoline) costs, it will take 10 or 12 years to recoup their investment.

One installation a couple of weeks ago in Belmont Shore of a 7-kilowatt system (the family has a swimming pool with a power-hungry pump) cost about $30,000, and will take about 10 years to pay for itself.

For most households, $30,000 is too much to pull out of the family savings account. But for the buyer of a new home, the cost of a solar system can be wrapped into the mortgage, and utility savings will offset the higher monthly payments.

For the homeowner, solar power has become a pretty good deal. For the air quality of California and prospects of energy independence, it is a very good deal.