Solar Panels Give Power to The People Electricity crisis spurs new interest

Bernadette Tansey, Marshall Wilson, Chronicle Staff Writers Sunday, January 28, 2001

Rising PG&E rates make you feel powerless? Not Norman Pease.

Two years ago he installed a 10-kilowatt solar panel system on his Orinda roof and now watches his meter run backward on sunny days. His huge 40-panel system provides all the juice for his 11-room house and charges the batteries of his electric-powered Honda.

Pease is typical of the California homeowners who took the state up on a 1998 offer to subsidize the purchase of residential solar equipment. A well-heeled retiree strongly motivated by environmental concerns, Pease didn't necessarily need his solar panels to yield a quick financial payoff.

Even with the state assistance, the cost of an average home solar system is steep -- about $14,000 -- and until recently was projected to take 15 years or longer to pay for itself. Only a few hundred people signed up in the first couple of years.

But the economics of energy in California may soon make solar power an affordable option for mainstream consumers. Already, with rolling blackouts and the prospect of soaring electricity costs, homeowners of more modest means are flooding solar power companies with inquiries.

State rebates to cut the cost of the systems by 30 percent are being renewed, and the state's Energy Commission is considering more favorable terms.

Solar industry trade groups and environmentalists are lobbying the state to force utilities to buy the excess electricity a home-based system pumps back into the state's grid.

That means a homeowner with a solar system could, in theory, turn a profit. All in all, the deregulation debacle could turn out to be the best thing that ever happened to California.

"Three thousand more systems like this," said Chris Beekhuis, a 36-year-old San Jose resident with solar panels on his roof, "and it would get the state over the hump" from the energy crunch.

Beekhuis, vice president of engineering at efinance.com, is no back-to- nature hippie. He has an espresso machine, laptop computer, microwave, cell phone, halogen lighting and the rest of the accoutrements of the 21st century.

He considers his 2.2-kilowatt solar system, which cost $13,000 after state and federal rebates, a sound investment for the environment. But even ardent backers of solar say the cost, red tape with utilities and the state, and shortage of incentives pose major hurdles to widespread solar use.

"You need stubborn people like us to go first and sort out the details for everyone else," said Richard Eckman, a 38-year-old mechanical engineer who shares the San Jose home with Beekhuis.

Although more than 560 systems have been installed or are in the pipeline through the state rebate program, California consumers have used less than a fifth of the $54 million authorized through 2002. But a growing number are giving solar a try.

In sun-drenched San Diego, where utility rates first shot through the roof last year, more homeowners have purchased solar systems with the state rebate since June than had signed up in the first two years of the program.

And a major national builder, Shea Homes, has just announced plans to put solar electrical generators in all its new housing developments in San Diego.

In the Bay Area, solar power firms like Concord's Light Energy Systems are training new workers to keep up with the demand. The firm's business has doubled over the past year, and could double again in 2001, company spokesman Burke O'Neal said.

"I can't really imagine a better time to be in the solar business," O'Neal said.

Karen Campbell and her husband, Duane, started the company 20 years ago. They have seen government subsidies wax and wane, and have had to ride out the changes by diversifying their business to include services like solar pool heating.

Karen Campbell is reluctant to take on panicky customers now asking about solar systems solely to avoid high utility costs. She doesn't want them to regret installing a system later if state regulations and market changes restore lower rates from utilities and reduce the financial advantages of a home solar generator.

Like Pease, one of Light Energy's customers, many of the firm's clients choose solar because they relish declaring independence from Pacific Gas and Electric Co. and want to help wean the region from pollution-causing energy.

At Beekhuis' and Eckman's modest San Jose home, solar cells that convert sunlight to electricity rise a few inches off their sloping roof. No shade -- not even a stray tree branch or utility line -- crosses the panels to prevent them from operating at peak efficiency.

Beekhuis and Eckman hose off the panels about once a week, the only maintenance needed. If their use exceeds the power generated, they draw electricity from the power grid, like any other customer.

But when generation exceeds demand, their meter literally runs backward, pumping electricity into the grid. In the evening, they can draw power from the grid with credit for what their system supplied during the day.

Under California law, a utility may buy the excess energy produced by a home-based solar generator. But utilities don't have to -- and PG&E doesn't. It takes the excess energy for free.

That burns Eckman. "I think the law should go farther to say they should pay for the excess power, not because I want the money but because it would encourage others," Eckman said.

Harold Hirsch, a PG&E analyst, said that wouldn't make financial sense for the company. Only 170 PG&E customers are enrolled with the utility both to use and generate power. The company would need to hire extra people to keep track of billing and credits and to register the electricity with the state power exchange, he said.

"It becomes prohibitively expensive for us," he said. "There's a lot of overhead," while the amount of excess energy produced is small.

Advocates for solar power counter that the utility has no problem keeping track of every bit of electricity or gas used.

A state law that took effect Jan. 1 does require utilities to give those with solar generation greater credit on their accounts for producing electricity during the day, when demand is highest.

But it is the state rebate program, along with soaring rates, that may finally spread solar among average consumers.

The state Legislature in October extended the rebate program for 10 years, drawing on a fee added to utility consumers' bills. The Energy Commission is considering greater breaks for consumers than the current rebate, which cuts $6,000 off the cost of a fairly modest $20,000 system.

Solar advocates are submitting suggestions to make home systems even more attractive. Their ideas include low-interest financing, better outreach to make people aware of the benefits of solar power, and a mechanism to pay customers if they generate more power than they use.

Matt Freedman, an attorney for the Utility Reform Network, a consumer group, is lobbying for more incentives that would prompt large commercial users to install solar panels.

"We think the law is working but it doesn't go far enough," he said. Regardless of utility rates, the state could create an extra incentive for investment in clean renewable energy by offering a premium fee for every kilowatt of solar-generated power, said Ed Eaton of Solar Energy International in Colorado. Germany and Japan, which are aggressively encouraging home solar power, are offering such premiums.

For his part, Pease is considering doubling his solar capacity in Orinda so he can power two more of his three electric vehicles from home at a fixed rate that will not change with inflation, fuel prices or market forces.

"It's like buying stock in the stock market," Pease said. "If you do good, you've never bought enough."

GOING SOLAR

The California Energy Commission says interest in solar power systems is starting to climb in the Bay Area because of soaring utility rates. This table represents just over half the energy use of the average household without the use of such energy-saving measures as fluorescent lights.

Information on obtaining state rebates for solar power is available from the California Energy Commission at (800) 555-7794, or www.energy.ca.gov/greengrid Source: California Energy Commission

E-mail Bernadette Tansey at btansey@sfchronicle.com and Marshall Wilson at marshallwilson@sfchronicle.com

-- Swissrose (cellier@azstarnet.com), January 28, 2001

Answers

Great article! Wonder if any other states have rebate programs?

-- suzy (Itssuzy2@aol.com), January 29, 2001.

Arizona used to have a program along time ago when the Feds had a solar energy credit and the state also had a program but that was deleted. A large number of solar water heaters were installed during that time. In Phoenix, Tucson and Yuma area we could all do quite nicely on solar water heaters and save untold amounts of energy. But alas, our priorities are to pump and draw stuff out of the ground ad infinitum.

-- Guy Daley (guydaley@altavista.com), January 29, 2001.