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December 10, 2006

The San Deigo Union-Tribune -- POWER FROM THE SUN
Solar Selling Point for New Homes Slow to Catch on.
by Roger M. Showley

New-home buyers, once they pick their site and floor plan, have a field day selecting flooring, countertops and all manner of upgrades that can easily add 10 percent to the purchase price.

Now, under the California Solar Initiative, they are likely to hear more about another option - photovoltaic cell (PV) solar-power systems.

It may not be as jazzy as a surround-sound home theater or as hip as a wine cellar, but it might appeal for another easily understood reason.

"It's an incredible feature for saving energy," said Brooke Bennett, a new sales agent at Standard Pacific's Avaron project in Del Sur along North County's state Route 56 corridor.

Standard Pacific and handful of other local big and small builders have been including solar systems as standard features on some of their projects for the last five years and Bennett said the buy response has been enthusiastic.

But when offered as an upgrade at a price around $20,000, almost nobody springs for it.

Bennett said the typical buyer at Avaron spends $125,000 to $180,000 on wood floors, crown moldings, luxurious wall coverings and other extras for homes prices from $1.4 million and sized up to 5,037 square feet. Solar, as an add-on option, wouldn't even show up as a rounding error in the mortgage, but it rarely makes the cut.

"I don't think people are quite as familiar with the benefits (of solar)," Bennett said. "Part of our job is playing educator and helping people see how much they can save."

According to the California Energy Commission, about 23,000 homes statewide have solar systems, but no more than 1,800 of them are newly built homes.

Under the solar initiative, the commission is responsible for increasing the new-home count to 300,000 by 2017 and it's doing it in three ways - marketing, rebates and mandates.

As of Jan. 1, builders who want to go solar may offer systems as an option or standard feature and receive a rebate. Edelman, a Chicago-based public relations firm, has been hired by the commission to sell the virtues of solar to buyers and builders alike.

Starting Jan. 1, 2011, builders of 50 or more homes in a subdivision are required under state law to offer solar as an option or features to all buyers. Rebated to builders will be slightly higher if the systems are standard rather than optional.

Joyce Mason, spokeswoman for Pardee Homes, said her company is currently including solar systems as a standard feature at seven projects in San Diego County but only on certain homes that have roofs suitable for installation.

"We're in a market where it's price sensitive," she added, "so we don't want to put a lot of things in a house that make the house so expensive that the buyer might not want to purchase the home."

But Jim Meacham, an energy consultant with CTG Energetics in Irvine and doing business in San Diego, said builders that include solar on all homes stand to gain a marketing edge in the current buyers' market where completed homes are sitting beggin for purchasers.

"What we're seeing is builders are really starting to understand this is a way to differentiate their product," he said.

That was the attitude of Ken Eaton, president of Eaton Development Co. and owner of Pacific Homes International, who put solar panels on all six of his townhomes now for sale at 29th and E streets in Golden Hill, ease of downtown San Diego.

"This will save (residents) $30 to $40 on their energy bills per month," said Eaton's marketing director, Tila Cota.

Kirk Mulligan, president of Clean Power Systems whick installed the 1.1-kilowatt solar systems on each unit, said there was one more incentive for going solar - the city of San Diego's expedited permitting process for energy-efficient projects.

"We were able to get a building permit in 90 days," Mulligan said, compared to more typical three-year time frame. "In today's real estate market as it's going down, the faster you can get these things done, the better. Shea Homes' San Angelo and Tiempo projects in Scripps Ranch were among the first new-home projects locally to include solar as standard feature in some models. The results have been written up in an 800-page report, being published online this month by the National Renewable Energy Laboratory in Golden, Colo. (www.nrel.gov)

Barbara Farhar, coauthor of the five-year study, said the solar homes sold for less, appreciated faster and experienced less turnover than a neighboring nonsolar development.

"If you like the house, this is, in a way, a deal-closer, icing on the cake," Farhar said, "and certainly after you live in it, you appreaciate the equipment aspect and savings on your utility bills. And of course, there's bragging rights and the feeling you're doing something for climate change."

Tim Coyle, senior vice president for government affairs at the California Building Industry Association, said installation costs may drop enough and consumers may be demanding enough by 2011 to promopt most builders to include PV systems as standard features.

"Don't lose sight of that - the customer makes the market," he said.