California Home Builders, Buyers Balk at Price Tag for Solar Power

Feb. 5--John Hemingway and his wife have never considered themselves very environmentally conscious. So it was almost by accident they ended up in a super-energy-efficient home, powered partly by the sun.

Now Hemingway says it was one of the couple's best decisions.

"We feel so lucky. My experience with moaning about PG&E bills and trying to hold down costs, that's gone," said Hemingway, who moved into his new 2,250-square-foot East Palo Alto home last fall.

Hemingway is among a growing number of California home buyers living in newly constructed solar-powered homes. While solar panels are installed on just a sliver of the 180,000 new homes built each year, more builders are embracing the technology.

Solar-power industry officials are hoping the upward trend accelerates under Gov. Arnold Schwarzenegger, who has touted solar energy as a way to ease the state's power woes.

Solar power still faces strong resistance from builders, who bemoan its cost, and consumers, who often care more about fancy cabinets and countertops than photovoltaic cells. In 2002, new home builders sought state rebates for just 240 renewable-energy systems, most of them solar, according to figures from the California Energy Commission.

But last year, the number of rebate applications soared to 1,300.

"I think solar is in the seedling process," said Ken Allison, director of commercial sales for AstroPower, a national solar-energy system provider. "We really are in the early adopter stage. But it's not a novelty anymore. It's growing." Clarum Homes made solar electric power a standard feature on two of its local projects, one in Watsonville, the other in East Palo Alto, where the Hemingways live.

In Placer County, U.S. Home has plans to build the largest residential solar project in the country, installing photovoltaic panels atop 917 homes, clubhouses and maintenance buildings.

Centex Homes built a solar-powered "zero-energy" model home in Livermore 1 1/2 years ago to test energy-efficiency technologies and gauge consumer interest. The house was so efficient it produced more energy than it consumed, said Jeff Jacobs, project manager for the company's Northern California office.

Jacobs is a rare energy-efficiency evangelist in the building industry. ("It's the right thing to do," he says.) But he acknowledges the challenge of convincing home buyers and builders -- including his own bosses and co-workers -- of the merits of super-energy-efficient homes.

Most home salespeople do not know how to market solar energy to home buyers, Jacobs said. And most consumers don't demand it.

"But we want to develop that market," Jacobs said. "It puts us ahead of the competition, and it helps us grow as a company." Home buyers appear willing to spend more for energy-efficient homes -- to a point. A survey found that half would add $75 to $100 more to their monthly mortgage payment for energy efficiency, said David Springer, president of the Davis Energy consulting group. But just 10 percent were willing to spend $175 more.

The appeal of the Hemingways' house was mostly its price -- $595,000, including the solar energy system. The energy savings emerged as a surprise bonus.

Through December, the family of three was producing more electricity than it consumed, resulting in a credit on its PG&E electric bill.

Gas costs for heating and cooking hover around $50 a month.

"It's almost decadent," said Hemingway, 59.

Nonetheless, most building industry officials insist solar power is not yet cheap enough -- even with government subsidies -- for them to sell it to home buyers.

Market forces In a development 15 miles north of San Diego, Shea Homes made solar an option on 160 homes for about $10,000 to $12,000. Few buyers wanted it.

"Those home buyers that had the option wanted the granite countertops and the nice cabinets, not the solar," said Paul Barnes, Shea's director of acquisition and development in San Diego.

"Market forces have told us that they do not want it." Because of state laws, developers already are making homes far more efficient than just a few years ago. As a result, one building official questioned the need for solar panels.

"If you already have a low electricity bill, it's virtually impossible to make these systems pay back," said Bob Raymer, technical director for the California Building Industry Association.

But solar industry officials say prices will come down as more people adopt solar, and the technology will find its way atop thousands, if not millions, of new rooftops.

"We will get to the point where solar will be a very common part of most homes," said Glen Hamer, executive director of the Solar Energy Industries Association. "I can't say when we'll get there, but we will."