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Charlotte Business Journal - 2008-06-04

Plugging into the sun (new window)

With solar power slowly rising for residential applications, home improvement has taken on a whole new meaning.

It's now possible to reduce a home's carbon footprint, slash utility bills and help the environment all at the same time. Moreover, state and federal tax credits make outfitting a house with solar technology a little easier on the wallet.

However, it's still a relatively expensive endeavor, and in some cases homeowner associations and the presence of tall trees can prevent some owners from utilizing solar energy.

Nonetheless, some industry participants say they're seeing an increase in demand for solar power in homes, including Jon Goode, the Charlotte operations director for Southern Energy Management. The company, which was launched in Raleigh in 2001, opened a Charlotte location in early 2007.

"We're installing systems just about every day in Raleigh, and things are starting to really pick up in Charlotte," he says.

There are two main types of solar-energy systems for residential use: solar thermal, for heating water, and photovoltaic systems, which generate electricity.

A typical solar water-heating system for a single-family home consists of two 4-foot by 10-foot panels mounted on the roof. The panels are connected to a 40- or 80-gallon tank, where the heated water is stored. The average cost for a residential system is between $6,500 and $7,000, Goode says.

Because heating water accounts for about a quarter of the average home's energy use, a solar system is generally considered the most economical and effective form of renewable energy.

A photovoltaic system is more complex and costly. It's typically used to supplement everyday energy needs and can provide back-up power in the case of an outage. A small PV system, which generates 2.4 kilowatts, costs about $30,000, Goode says. Four to five kilowatts are needed to power a 2,000-square-foot house exclusively with solar.

Current tax credits -- 30% of the purchase price after the first year for federal, and 35% from state over five years -- help offset the cost. But Goode says most clients don't invest in a PV system for tax purposes. "Most are just looking to do their part to help the environment," he says.

Case in point: Jennifer Pippin, owner of Pippin Home Designs Inc., which specializes in environmentally friendly residential designs.

Southern Energy Management helped design and install an extensive photovoltaic system for Pippin's home and studio in Sherrills Ford earlier this year. In addition to two solar panels to heat water, Pippin has 18 photovoltaic panels -- 12 on the roof and six in the front yard mounted on a pole -- that generate a total of 3.4 kilowatts.

"That's enough electricity to power about half of our household needs," Pippin says.

However, like many owners of PV systems, she doesn't use the homegrown electricity. Such systems can't provide the kick needed by an air-conditioner, and cloudy days make reliance on solar energy impractical.

Instead, Pippin sells electricity to Duke Energy Carolinas through a program sponsored by NC GreenPower, a nonprofit organization that advocates the use of renewable-energy sources.

NC GreenPower offers a subsidy of 15 cents per kilowatt-hour, and Duke buys the power for 4.5 cents per KWH. Duke's typical residential charge is 8.5 cents, so the homeowner's profit helps offset the cost of a PV system.

Most Charlotteans who use solar power don't have PV systems. Instead, they opt for hot-water systems.

"Solar thermal has been a huge growth market," says Erik Lensch, president and co-founder of Argand Energy Solutions, which installs solar systems for commercial, government and residential customers. "There's been some interest in PV systems, but because the price point is higher, it hasn't taken off in the Charlotte area."

Lensch says the increase in demand for solar energy comes mostly from homeowners, not builders. But that's likely to change -- earlier this year, the National Association of Home Builders announced a green-home certification program that includes solar options.

One approach doesn't rely on technology and is far less costly. Passive solar relies on how a house is placed on a lot, the siting of sleeping and living spaces and windows within a home, and the choice of building materials and design.

Passive solar considers the seasonal effects of sunlight on the comfort of a home's residents. Ideally, a home can be sited and designed to reduce the impact of the summer sun, and can rely on ventilation to cut the need for air conditioning. The low path of the winter sun is considered to allow sunlight to enter windows and heat a home.

Beyond price, there are other obstacles to using solar energy, most notably homeowner associations. "That's a big problem," Pippin says. "Most of the architectural guidelines for subdivisions don't allow you to put solar panels on your house. I've run into it time and time gain -- people just think they're ugly."

The presence of large trees can also prevent homeowners from going solar.

The time required for the energy savings to cover the cost of a solar energy system can also limit demand. For solar water heating, Pippin says the payback comes after five to 10 years.

For a photovoltaic system, Lensch says at least 10 to 12 years will pass before an owner breaks even. "But the folks who do PV do it because they want to make a commitment and statement," he says. "They're not really looking for payback."

Scott Spivak, president of Environmental Building Solutions, says his Matthews-based consulting firm offers guidance on solar power, but thinks homeowners should first consider other options to curb energy use.

"We try to do everything else we can first before we start talking solar," he says. The company emphasizes insulation, high-performance windows, airtight construction and sealed crawl spaces.

FAST FACTS
  • A full-scale photovoltaic system costs about $40,000. That cost is offset by federal and state tax credits.
  • Solar systems can't power air-conditioners, and cloudy days inhibit production. Most owners sell power to a utility.