Frank and Mary Smith spent three years looking for the perfect rooftop solar system for their Anne Arundel County home. Problem was, most of the products on the market looked like relics from the industrial revolution, throwing form out the window for function.
"We go to house shows a lot," says Frank Smith, "and most of the solar panels have a very commercial look with a racking system that sits eight inches to a foot off the roof. It was very important to us to have a visually appealing system."
But there was light at the end of the aesthetic tunnel, so to speak: Twenty-one sleek solar panels by Westinghouse Solar now lie discreetly secured against the roof of the Smith's Cape-Cod-style home. Integrated racking and wiring not only weatherproof the system, but allow it to attach nearly flush with the roof. "They look almost like skylights," Frank says. The 175-watt AC panels, which cost about $11,000 after incentives were factored in, account for 64 percent of the Smiths' electricity.
According to an analysis from American Design and Build, the energy-efficiency contractor in Bel Air that installed the panels, the system will pay for itself in seven years. Over the course of 25 years, the Smiths will save $122 a month on utility bills, or a total of $36,670.
"That's an almost 16-percent return on investment," Smith says. "There's nowhere else you can invest and get that kind of return."
Unlike solar panels that produce DC (direct current such as in a 12-volt car system) and which connect to a large central inverter, panels with AC (alternating current such as is used in 110-volt home wiring) feature built-in micro-inverters that convert DC power to AC power directly on each panel. Micro-inverters reduce the energy waste that occurs when power is conducted from a solar panel to a central converter. The AC panels also make more efficient use of partially shaded rooftops, because, unlike DC panels, a drop in the performance of one panel does not affect the other.
Parkton resident Gene Crocetti also appreciates the low profile of his Westinghouse AC solar panels, installed two months ago. However, he was especially lured by the cost per watt from the larger format 235-watt AC panel released this September, which provides better performance.
"Five, six years ago, I could have bought a solar system for the same cost, but with one-third the power," Crocetti says. The 39,235-watt panels are expected to account for 60 to 70 percent of his electricity, and he is already considering additional panels.
Spurred by technological improvements, solar-panel makers are now scrambling to create solar systems that win not just the ecological but also the aesthetic approval of homeowners. And while efficiency is increasing, the upfront cost is going down: The average installed cost of residential and commercial photovoltaic systems in 2010 fell by roughly 17 percent from 2009, and by an additional 11 percent within the first six months of 2011, according to a report by the Lawrence Berkeley National Laboratory. Combined with a 30 percent federal tax credit, state grants, and local property-tax breaks, residents incur a shorter payback on their investment than ever before. And once the savings have paid for the system, they not only benefit from free electricity, but can earn money by selling their Solar Renewable Energy Certificates (SRECs) and Renewable Energy Credits (RECs) to utilities.
All those incentives are fueling rapid growth in solar-panel installations: Nationally, photovoltaic installations by businesses, as an example, increased by 69 percent in the first half of 2011 compared to the same period in 2010, according to the U.S. Solar Market Insight quarterly report. And as a result of all that, the amount of renewable energy coming into the power grid is no longer an insignificant trickle: Maryland currently has 20 megawatts of solar generating capacity on its grid and is expected to reach 40 megawatts by early 2012, according to Doug Hinrichs, the program manager for commercial solar at the Maryland Energy Administration (MEA).
To help achieve that, Maryland offers a property-tax exemption on solar-generation equipment, as well as a Clean Energy Grant that provides up to $10,000 for residential photovoltaic systems.
While business and government are way ahead of homeowners in harnessing the sun, the amount of residential photovoltaic generating capacity is also on the rise, increasing from 0.6 megawatts in the first three months of 2011 to 2.5 megawatts by the end of June, according to the MEA.
The administration has helped underwrite 2,275 solar systems so far, awarding $11.4 million to date. The good news is that all but 32 of those are residential installations, according to Kevin Lucas, MEA's director of energy market strategies. Most are tied to the electric grid, reducing the amount of power that must be bought from local utilities.
Frank Smith has been so pleased with his system over the past year that he recently purchased 19 additional 185-watt AC panels.
"I want to get up to 100 percent," he says. "I don't want to take any energy from the grid."
When all was said and done, financial incentives brought the cost of Frank's initial 6.08-kilowatt solar system down from $24,476 dollars to $11,252 dollars.
And he may go farther than that and turn his home into a tiny version of BGE: Although he'll be producing 100 percent of his energy needs, he is already considering investing in even more 185-watt AC panels. That's because Maryland residents who generate more power than they use in a given month, receive a Renewable Energy Credit on their next monthly bill. At the end of the annual billing cycle, net excess generation goes to the utility, while the system's owner retains their cumulative renewable energy credits. And legislation passed in May ensures that excess generation carries over at the full retail rate.
And what about homeowners for whom the hefty upfront cost of installing is just too high?
A handful of companies—SolarCity, SunRun, Sungevity, and BGE—are offering the option to lease solar systems. Residents can put as little as nothing down and instead pay rent for the use of the system.
"It's really a power-purchase agreement," says Susan Wise, SunRun's spokesperson, explaining that customers aren't paying for the panels, but for the solar power the panels generate.
The savings customers receive on their utility bill more than offsets the payments they make to companies like SunRun. Meanwhile, the electricity generated by the panels powers the homes, taking some load off the electric grid.
"This is for the pocketbook environmentalist," Wise says. "They're not living in hovels in the woods making their own clothes. They look out first and foremost for their pocketbook, but they like when that aligns with doing something good for the planet."
For the time being, your tax dollars are at work for you here, too: The leases are currently subsidized by the state and federal governments. And the companies hope that offering affordable leases will help create the economies of scale necessary for solar to stand on its own when those subsidies end.
The cost of solar technology has not bottomed out yet. And experts are confident efficiency will continue to grow.
Wise says a lot can also be done on the non-tech side to eliminate soft costs, such as standardizing permit rules and fees to create a more streamlined process. Current fees across the industry add $1 billion to the cost of solar. "There's a lot of low-hanging fruit that could bring the cost of solar energy down," she says.
Wise expects that the cost of solar will move closer to grid parity over the next decade, meaning that it will cost the same as energy from the grid.
"People will eventually seek out solar energy as proactively as they might wireless Internet," she says. "Clean energy is the next technology revolution, and solar will be one big component of that energy mix."