This op-ed was featured in Noozhawk on June 14, 2018.
On May 22, Noozhawk published an opinion column by Ron Fink titled “New Solar Panel Rules Equal Higher Electric Rates” that contained numerous factual errors. The World Business Academy would like to correct the record and present the accurate facts.
The California Energy Commission recently voted to add new provisions to the California Building Standards Code. One is a new mandate that, as of 2020, all new homes and multifamily residences of three stories or fewer must be built with solar panels. This is part of a new direction for California to produce 50 percent of its energy using renewable sources by 2030.
Consider the following:
» The building industry and state political leaders from both political parties favor these new regulations.
» Regarding Fink’s claim that the mandate will drive up the costs of new houses, about 80,000 new homes are built in California each year and about 30 percent of them have solar panels because it makes financial sense.
Currently, the solar industry installs panels on roughly 150,000 new and existing residences in California each year. When building solar into new construction, there are no customer acquisition costs and no sales commissions. Solar panels also cost less when bought in bulk.
Only the first homebuyer absorbs any higher costs to include solar but, over time, the panels result in big savings that negate the up-front costs. On average, the cost of a residential solar system equals 5-7 years of electric bills. After that, it’s pure savings to the homeowner.
Furthermore, a home already possessing solar panels sells at a premium compared to a nonsolarized home.
» Research shows the premium solar adds to a home. The most well-known study was conducted from 2002-2013 by the Berkeley Lab. Homeowners who install solar not only save on their electricity costs but add value to their home without increasing their property taxes. Houses with solar attract homebuyers and sell faster, too. Solar has become a highly desirable feature, making houses with solar a big draw for homebuyers, especially the new generation of buyers.
» California’s new mandate takes some of the power from the utilities and, literally, puts it in the hands of the consumer, not the government as Fink incorrectly states. Consumers should have more choices and awareness over their energy use, and a solar system gives them direct control.
» Fink claims, “Regulators estimated the cost would be less than $10,000 per house, but a check of solar system prices indicates it’s really $34,800 for a 4-kilowatt system, the average size of a residential installation.” This is false.
According to Edison and the California Solar Initiative, a 4.5-kilowatt system costs about $17,000 — not counting the 30 percent federal tax credit allowed until the end of 2019 that further reduces the cost.
The investment tax credit (ITC), also known as the federal solar tax credit, currently allows you to deduct 30 percent of the cost of installing a solar energy system from your federal taxes. This tax credit is currently planned to be phased out for residential properties and will be lowered in steps to 22 percent. Under existing law, the final year to take advantage of the tax credit is 2021 for residential projects.
» Another blatant falsehood from Fink: “They will add future, very expensive, maintenance costs, too. Solar systems have a shelf life and must be replaced every few years, and the cost of replacement is equal to the cost of initial installation.” Most solar systems include a 25-year production warranty. They do not need replacing “every few years.”
Not only do the solar panels have a 25-year production warranty, but much of the other equipment, including racking and inverters/micro-inverters, is also warrantied for 25 years in most cases. Plus, as technology improves over time, so will the panels’ longevity.
» The reality is that most solar systems require very little maintenance. In a mild climate like Santa Barbara’s, cleaning the panels once or twice a year by spraying them with a garden hose is usually all the maintenance that is needed.
» Fink further claimed wrongly, “the ability of the home-grown system owners to sell back power to the public utilities has produced a glut of power that frequently has to be shed to other states to avoid damage to the power grid.” Only on a handful of days has California sold excess solar energy to another state, and the grid was never in danger. In fact, solar systems help stabilize the grid and make it more efficient. And, solar has prevented the need for natural gas “peaker” plants to be expanded or come online during times of very high energy demand.
It’s factually wrong and logically false to criticize renewable energy development by suggesting it could lead to higher bills, or to advocate for continuing reliance on fossil fuels. This false argument also ignores the fact that we all pay untold millions of dollars for the environmental damage and adverse health impacts caused by fossil fuel emissions.
The solar industry is certainly forcing change to the utilities’ outdated energy model, but the technology is here to stay, and utility companies will need to adapt just like the businesses that have researched the facts and elected to solarize their properties.
For several years, the No. 1 installer of solar for their buildings was Walmart and now it’s Target. Utility companies should embrace renewable technologies and join the movement toward a clean energy economy.
“I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”
— Thomas Edison, 1931