Part 2 of 3
SAN FRANCISCO— Solar is becoming “the new granite countertop” in today’s home market and is expected to soon become the mainstream option, says PetersenDean‘s Wendi Zubillaga, chief sales officer. GlobeSt.com recently caught up with Zubillaga to talk about all things solar, including the ROI for builders.
GlobeSt.com: Why is so solar so popular now?
Wendi Zubillaga: The net-metering policy was actually a major factor in bringing solar electricity into the mainstream. Before that point, solar required the additional expense and maintenance of a battery backup system where excess electricity could be stored. With the availability of grid-tied solar, the battery requirement was eliminated, which made solar significantly less expensive and easier for the average person to adopt. The solar industry, legislators, utilities and their governing bodies eventually put the net-metering policy into place, which enabled reimbursement for the electricity sent to the grid from individual solar power systems installed on homes and businesses.
GlobeSt.com: What is the future of solar?
Zubillaga: The price of solar is continuing to drop as utility rates continue to rise, thus creating increased demand for solar-ready homes. As such, more and more builders are offering solar as standard. Solar is becoming “the new granite countertop” in today’s home market and is expected to soon become the mainstream option. If a buyer has to choose from a home that has low energy costs versus one that doesn’t, it’s a no-brainer.
GlobeSt.com: What is the ROI for builders?
Zubillaga: Solar is financially feasible – which benefits everyone involved. Thanks to shorter paybacks – and great pricing – builders and homeowners especially can reap all the benefits and long-term value by installing solar, without having to use third-party or leases.
GlobeSt.com: What has to be communicated to the home buyers?
Zubillaga: Home buyers need to know that the ROI for them is also significant. The GeoStellar Solar Index shows that solar is a wise investment that can generate more wealth for homeowners in much of the country than bonds, CDs and other investments. In a total of 33 states, solar offers better returns on investment than 30-year U.S. Treasuries. And in 43 states, solar offers better returns on investment than five-year certificates of deposit (CDs), which typically return just 0.75% annually. As electricity rates rise, so does interest in solar power. Homeowners usually want to see a comparison of the cost per kWh for solar vs. the price per kWh being paid to the electric company (this is an average in tiered rate structures). The great thing about solar electricity is that calculating costs and savings can be done on a per kWh unit basis using simple division. From there, it is very easy to demonstrate lifetime savings and payback time frames for each customer. The current 30% federal tax credit is always a very exciting benefit to be communicated.
GlobeSt.com: What do the formulas for savings look like?
Zubillaga: We always advise against quoting actual savings to potential homebuyers. Each household has different habits and usage. Once a system is designed for a home, the homeowner is given the approximate energy that will be generated from their solar system. This number will give them the opportunity to look at a bill from their current home to see what they would have saved with solar. Thus, over the days, months and years, the customer recoups the investment through the production offset and corresponding savings. And as fossil fuel electricity rates continue to rise each year, the total savings through fixed energy costs leads to growing savings.
GlobeSt.com: Can homeowners sell the energy back?
Zubillaga: With the implementation of the net-metering policy, solar customers gain an even greater advantage. Not only does this policy grant solar customers the exact match of the retail electricity rate for any excess solar-produced electricity sent to the grid, but in some cases, it also allows homeowners to work backwards to “shave” electricity from the most expensive tiers off their bills first.
GlobeSt.com: What are the payback periods for home owners?
Zubillaga: 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.”
GlobeSt.com: What about resale values?
Zubillaga: 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 low 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.