Solar powering up

July 22, 2006

Solar powering up

By Nathan Halverson

Tim McKernan, an installer with Solar Craft, looks over solar panels before a final inspection at a home in Rolling Hills in Fairfield. (Gary Goldsmith/Daily Republic)

FAIRFIELD - David Heacock believes in the power of the sun. Last February, Heacock, a Fairfield resident, had solar panels installed on his home.

"I tell people it is the greatest investment I've ever made," he said. "Just within four months we've already built up energy credits. In the first two months we had a bill of $72. Then the next two months erased that bill and now we actually have a credit of $9."

Heacock is among a growing number of residential or commercial property owners who are taking advantage of government tax credits and rebates. These government incentives have transcended solar panels from being merely environmentally friendly to being economically friendly.

"Of increasing importance, more people are buying on a strictly economic basis. Energy rates are continuing to go up and people are looking for a way to offset their electricity bill," said Richard Bennett, residential program manager of the North American division of BP Solar. "One thing that is driving this are the state rebates and federal tax credits. It's a fairly generous program."

BP Solar is a division of BP, formerly British Petroleum, which is one of the six largest energy providers in the world. BP has invested heavily in solar and now supplies Home Depot, which started a program about 2 years ago.

The federal tax credit program allows homeowners to take a $2,000 tax credit for installing solar panels. For commercial property owners, the tax credit is a much better incentive. Businesses that install solar panels can take a tax credit equal to 30 percent of the installation cost, which for larger installations can range into the six figures.

Also, the state offers a one-time rebate of $2.60 per watt of solar power installed. The rebate has a maximum limit of 30 kilowatts, or $78,000. These state rebates have been extended through 2017, but are expected to decrease 10 percent each year to offset the expected decline in the price of installing solar energy.

Christobal Estelita, a Fairfield resident, had solar panels installed on her house this month. The government incentives reduced her initial cost of $55,000 to $39,000.

"I am paying too much for my electricity and I know it will come down with this," Estelita said about supplying energy to her 3,200 square foot home. "I was paying almost $400 to $500 a month. And this way I can really save."

There is no set cost for solar panel systems, but in general a system will start at $15,000. The size and cost of a system is determined by how much energy a household uses per year. Professional installers determine that amount by examining how much energy a household has consumed during the last 12 months.

"It's not inexpensive, but if you look at it as an investment - the panels usually have 25-year warranties - it's worth it," Heacock said. "You can take out a loan and pay off that instead of paying PG&E."

Most people use a second mortgage to finance their solar panel system. On average, a system will pay for itself in 15 years, everything past that is a return on investment.

"I don't worry about PG&E rates going up anymore, because it doesn't affect me. And that's a nice feeling," Heacock said.