A Question of Cost
Solar power is affordable to most American homeowners, although many of them don’t think of it that way. Since the tax credit was implemented in 2006, the cost of installing solar has dropped 73%, according to the SEIA. The average price of a residential PV installation is now $3.55 per watt—nearly 50% lower than in 2010. Though costs vary considerably from state to state, an average-size residential system costs between $15,000 and $20,000 before the 30% tax credit. Folded into a 30-year mortgage, the monthly payment is often less than an average utility bill.
“The tax credit is a huge deal,” says Eileen Whiting, sales and marketing manager for Salt Lake City-based Garbett Homes, which builds solar-ready homes and has seen take rates—the percentage of buyers opting for solar—of 90% and 40% in two recent communities. She says it’s critical to educate customers on the benefits and affordability of solar power.
“We sit down with buyers and go over the worksheet with them and explain how to apply for the tax credit,” she says. “It’s a lot of money in buyers’ pockets. So it’s really a no-brainer for most people.”
Consumer Awareness
Even with the growth of solar, most production builders only offer renewable energy options as upgrades—if they offer them at all. Some large firms that make solar systems available include KB Home, Bozzuto, Pardee, Beazer, and Shea. Scottsdale, Ariz.-based Meritage Homes offers solar as an option on every home it builds, says C.R. Herro, the company’s vice president for environmental affairs, and the customers who choose solar have crossed over from “early adopters who wanted to save money … to people who see the improved technology and rising cost of energy and selfishly just want to make money for themselves. I don’t think there’s any going back,” he says.
Meritage’s customer take rate for solar varies significantly by state and shifts as local tax incentives change, Herro says. In Arizona, it’s fallen to about 5% since state tax incentives have been removed and some regions have started charging fees to connect solar systems to the grid. In Texas, where incentives are non-existent, solar is “not top of mind for consumers.”
In general, solar is just off most average consumers’ radars, Herro says. “The value is there—we got there about three years ago—but now it’s a matter of building consumer awareness.”
Customer education was a key reason why Meritage chose San Jose, Calif.-based SunPower as its sole solar supplier. It took some of the work of selling solar off of Meritage’s salespeople. “As a builder, we have 50 important things to talk with buyers about before we get to solar,” Herro says. “Solar often got lost in the process. SunPower gave us a partner to educate consumers in parallel with their home-buying decisions.”
