Bright buy for new homes as solar becomes US standard
SOLAR panels are the next granite countertops: an amenity for new homes that's becoming a standard option for buyers in US markets.
At least six of 10 largest US homebuilders led by KB Home include the photovoltaic devices in new construction, according to supplier SunPower. Two California towns are mandating installations, and demand for the systems that generate electricity at home will jump 56pc nationwide this year, according to the Solar Energy Industries Association.
"In the next six months, homebuilders in California and the expensive-energy states will be going solar as a standard, and just incorporating it into the cost of the house like any other feature," Jim Petersen, chief executive officer of the PetersenDean, the largest closely held US roofing and solar contractor, said in an interview.
Lashing panels to roofs during construction is about 20pc cheaper than after a house is built. Homeowners who can afford the extra $10,000 (€7,543) to $20,000 cost in return for free power threaten the business of traditional utilities such as Edison International of California or Kansas' Westar Energy.
Power companies are losing business because they can't cut their rates in line with the tumbling prices of residential solar systems. Those cost about $4.93 a watt in the first quarter, down 16pc from a year earlier, according to the Washington-based solar association. That was sparked by the 18pc slump in prices for solar panels and related hardware in the same period.
A 3kWh system, enough to power a typical mid-size home, costs less than $15,000 and can be rolled into a mortgage, said Tom Werner, CEO of SunPower.
"You embed it into your home mortgage," he said.
That's similar to how some buyers decided to pay $5,000 or $10,000 for a kitchen countertop that would be from natural materials and would outlast a Formica-style top.
"You're going to see a transition from novelty, to granite countertops, to mainstream option," Mr Werner said. "We're rapidly passing the equivalent of a 'countertops decision' to a 'no-brainer'. You just do it."
As more homes generate their own power, typically with the help of state or federal subsidies, they're buying less electricity from traditional utilities.
PG&E, California's biggest, has said this jeopardises the power grid because there's less revenue to maintain the infrastructure. In response, utilities are raising rates, a burden that's slightly heavier for people without solar power. In California, they may eventually pass on as much as $1.3bn in annual costs to customers who don't have panels.
The price crunch has also clobbered many manufacturers, pushing some of the biggest in Germany and China to protect themselves from creditors and restructure debt over the past two years, including Solar Millennium and Q-Cells.
PetersenDean installed photovoltaic systems on about 7.5pc of the 100,000 roofs it built last year. Mr Petersen said he expected that figure to double this year.
"We've picked up at least a dozen new subdivisions since mid-March, and all of them have incorporated it into the cost of construction," he said.
KB Home has built about 1,800 homes with rooftop solar since 2011, according to Steve Ruffner, president of the company's Southern California unit. It's currently developing 22 communities in the most populous state that include panels as a standard feature, he said.
Our buyers told us that's the way they wanted to go," Mr Ruffner said. (Bloomberg)