joshua brock environmental specialist city of san diego

Financial Pros and Cons of Residential Solar Installations: A Residential and Municipal Perspective

Joshua BrockEnvironmental Specialist

City of San Diego

Outline

Background– Goal of the survey and focus groups

– The Process

The Survey– Who we surveyed and who responded

– Review of results and what they mean

Focus Groups– Breakdown of the 3 groups

– What we learned

Bringing it all together– What this means for residents

– What this means for a municipality

Background

Background & Goals

Department of Energy, Solar America Initiative Grant

What can the City of San Diego do to increase the penetration of Solar PV in the market– Identify challenges and barriers customers face

– Find out what motivates residents to install a PV system

– Examine how a PV system affects the value of a property

The Survey

Who Participated?

Residents and Businesses that had installed a solar PV system in the last 10 years;

2000 surveys mailed, option to reply online or by mail;

641 responses or about 32%

The QuestionsHow many years have you occupied the property?

Who purchased the solar system for this property?

How did you find your solar installer?

Were you satisfied with the installation process?

What, if any, were some barriers you encountered?

Would you have installed your solar system without a rebate offered?

Did you do any energy efficiency upgrades before or in conjunction with your solar installation?

Are you more conscious of your energy use after installing your solar system?

Have you had questions or comments from your neighbors about your solar installation?

Do you feel you are saving money on your electric bill as a results of your solar installation?

Did any of your friends or relatives install a solar system due to your example?

Would you expect your solar installation to increase the value of your home? If so, by how much?

0-2

3-4

5-6

7-8

9-10

11-1

2

13-1

4

15-1

6

17-1

8

19-2

0

21-2

2

23-2

4

25-2

6

27-2

8

29-3

0

31-3

2

33-3

4

35-3

6

37-3

8

39-4

0

41-4

2

43-4

4

45-4

6

47-4

8

49-5

0

51+

0

10

20

30

40

50

60

70

Building Occupancy Time Histogram

Years Occupied

Num

ber o

f Res

pond

ents

Personal Reference

Yellow pages / Internet search engine

Professional Reference

In-Store Display

Other (please explain)

Fair / Home Show

California Center for Sustainable Energy (formerly San Deigo Regional Energy Office)

Self Install

Print Ad

Radio/Television

Direct Mail / Cold Call

0 20 40 60 80 100 120

108

101

46

35

35

28

22

12

10

8

0

How did you find your solar installer?

None

Permitting

Inspections

Cost

Installer

Roof Orientation

Availability of Solar Panels

Other

Shading

Electric Panel

Home Owner's Association

Inverter

0 50 100 150 200 250 300 350

286

44

34

30

25

22

17

16

14

10

8

5

What, if any, were some of the barriers you encountered when installing solar?

2001 2002 2003 2004 2005 2006 2007 20080.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

Average Barriers per Response

Total City

2001 2002 2003 2004 2005 2006 2007 20080.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

Average Permitting Barriers per Response

Total City

Cost

General In-terest

Savings

Installer

Functionality

Payback Period

Satisfaction

Aesthetics (Positive)

Aesthetics (Negative)

0 50 100 150 200 250 300

262

145

218

91

84

119

116

36

11

Have you had questions or comments from your neighbors about your solar installation regarding the following

choices?

Yes28%

No72%

Did any of your friends or relatives install a solar system due to your

example?

$1,000 or less

$2,001 - $3,000

$4,001 - $5,000

$6,001 - $7,000

$8,001 - $9,000

$10,001 - $11,000

$12,001 - $13,000

$14,001 - $15,000

$16,001 - $17,000

$18,001 - $19,000

$20,001 - $21,000

$22,001 - $23,000

$24,001 - $25,000

0.00

5.00

10.00

15.00

20.00

25.00

30.00

Normalized expected increase in home value($/kW)

What We Learned:

Personal references and Google not NPR and direct mailings;

Incentives and Tax Credits drive the market;

Perceived value of about $5,000/kW installed;

On-going training for Installers and Permitting/Inspections staff;

Residents may not understand why energy efficiency is important;

The Focus Groups

Who Participated

Real Estate Professionals (Sales, Appraisers, Brokers)

Municipal Permitting/Inspection Staff

Homeowners with a PV System

Solar Installers Meeting

Focus Group Results

Real Estate Professionals– Market does not value PV system as high as their costs

merit

– Bills showing energy savings needed to value the system, but older systems are looked at as a liability

– Most real estate agents do not highlight a PV system as a selling point

Municipal Permitting/Inspection Professionals– The Fire Departments role needs to be better defined

– On-going training for city staff and installers needed

Focus Group Results, Continued

Homeowners with a PV system– Generally very happy with system. Like having a

stable bill

– Want to install more but need a financial incentive to do so.

Meeting with Solar Installers– Costs of permits not an issue

– Would be willing to pay more for quicker permit processing and inspection

Bringing it All Together: The Residential Sector

Pro’s – Stable utility bill and protection from rate increases

– TOU tariff could help reduce payback if exported kWh is properly valued

Con’s– Failure to perform meaningful energy efficiency

upgrades early on could mean future upgrades increase system payback

– No guarantee that a PV system will increase the sale price of your home.

Example Energy SavingsSolar Only

20

Sample Home: 1500 Sq Ft 3Bd 2Ba

Location - TierrasantaHome Value - $ 467,500Annual Prop Tax - $ 5,049

PV System Size (AC) - 4.50 kW

Energy Efficiency - NoneFinanced Amount - $ 36,638Loan APR - 7.00%Positive Cash Flow – Year 1 Average Monthly Savings - $ 236.55Monthly Tax Increase - $ 288.20

30% Federal Tax Credit

Replace Inverter

Loan Paid Off

Example Energy SavingsSolar and Energy Efficiency

21

Sample Home: 1500 Sq Ft 3Bd 2Ba

Location - TierrasantaHome Value - $ 467,500Annual Prop Tax - $ 5,049

PV System Size (AC) - 2.40 kWEnergy Efficiency - Lighting, Insulation, HVAC, Windows

Financed Amount - $ 36,433Loan APR - 7.00%Positive Cash Flow – Year 1 Average Monthly Savings - $ 304.34Monthly Tax Increase - $ 286.59

30% Federal Tax Credit Replace Inverter

Loan Paid Off

Bringing it All Together:A Municipal PerspectivePro’s

Permit costs are not an issue from the customers perspective

AB-32 and local Climate/GHG goals

Green Jobs & more disposable income

Con’s

We may be missing out on $$!

Rebates/Incentives still driving the market

Undertrained permitting & inspection staff plus inexperienced installers professionals can cause harm

Thanks!

Joshua Brock

Environmental Specialist

City of San Diego

858-492-5033

Jbrock@sandiego.gov