Spring Real Estate 2006

Publication Date: Friday, April 28, 2006

Giving back to the grid
Government support lightens renewable energy load

by Cyrus Hedayati

When John Armstrong purchased his photovoltaic solar system, he decided that helping the environment was worth the cost; any financial pay-off was just gravy.

After several years on the fence, he purchased a home system, capable of generating 3 kilowatts of energy, and an additional system to heat his pool. He had them installed in December 2004, and hasn't received an electric bill since, but his savings on energy will take 25 years to pay for the initial cost of the system, he said.

"I may not be able to justify it to an accountant in dollars and cents, but if I can factor in my happy points, it's worth it," he added.

Armstrong and other Palo Alto residents are turning to renewable energy sources such as solar electricity and geo exchange heating for their homes, thanks to simplified technology, rising natural gas prices, and in the case of solar power, financial assistance from both the local and federal government. The average 3 kilowatt system costs in the range of $28,000, but government aid can soften the blow, said Kurt Newick, who has installed solar panels for the past 25 years.

Palo Alto Utilities currently offers rebates on home solar power systems at $1.50 per each watt the system can generate, up to $10,500 for 3,000 watts, or 3 kilowatts. However, 3 kilowatts is only 60 percent of what an average home uses in electricity, said Lindsay Joye, marketing engineer for the City of Palo Alto Utilities. This policy fits the city's tight budget, but also encourages residents to get their energy consumption down, she said.

Residents can also receive a federal income tax credit for 30 percent of the price of their system after local rebates, up to $2,000. The government also cannot raise property taxes on a home for installing solar power.

"You could invest the same amount of money in a new kitchen, but then your property taxes would go up," said Joye.

The simple design of solar-power systems allows for easy installation during the construction of the house or for retrofitting, and it's easier than ever for homeowners to install their own systems, Newick said.

A solar electric system features panels, preferably on the roof for maximum exposure to sunlight, on aluminum, stainless-steel rails. The panels connect to the inverter, which connects to the house like any other appliance.

However, said Brian Sullivan, solar program director at Palo Alto Hardware and contractor for Armstrong's system, most customers should hire someone to do the installation for them.

"By the time you get all these panels together, you're dealing with a lethal amount of voltage," he said.

The only maintenance required, said Newick, is keeping the panels clean. The panels should be slanted, he said, so the rain washes them in the winter. If the panels are flat, collected water could lead to rusting.

When the system is plugged in and the panels are generating energy, the home's electricity meter runs backwards, earning energy for the city that Palo Alto Utilities will pay for in energy credits. At night or during severely cloudy days, the energy credits buy back electricity at the same rate.

It's important to think of a solar electric system as not powering any one appliance in your house, said Sullivan, but as reducing the amount of work your electric company has to do to power your house.

If the credits do not cover the home's electricity, the owner pays the difference, but if the credits are more than enough to pay the electric bill, they automatically pay for other parts of the home's utility bill, such as gas, heating and water. Particularly efficient homes could pay nothing on their utility bills during peak sunlight months, Joye said. However, Utilities resets every home's energy credits annually, preventing home owners from gaining too many credits over a long period of time.

"If a family goes out of town for a year, leaves their system on, and generates a ton of energy, they can't use those credits to pay for their utility bill," Joye said.

Even with the savings a solar power system can generate, it is difficult to predict how long a system will take to pay for itself, said Sullivan. Several factors, including the cost of electricity in the future, and how much energy the home uses, determine how cost-effective each system is.

"It's like trying to predict the miles per gallon of your car," he said.

However, making an educated guess, Joye said most systems installed in the Palo Alto area will take 15 to 20 years to return on the investment.

Because the technology takes so long to become profitable, said Newick, many Palo Alto residents have purchased systems with mainly environmental benefits in mind.

"The beauty of solar electricity is that it's the only known way to generate energy without moving something," he said. "So it doesn't kill anything."

The most important environmental benefit of solar, Joye said, is that it reduces the need for fossil fuels, which cause greenhouse gasses and global warming. Solar energy also requires no water, Newick said, which most other energy sources use in excess.

Russel Siegelman had similar priorities when he installed a geo exchange heating system in his house. Since having it installed during home construction, Siegelman has used his system to heat both his house and his pool.

Geo exchange systems use the Earth as a source for heating and as a vacuum for placing unwanted heat. By sending heat underground, geo exchange systems also act as cooling units.

Even though the city has yet to provide financial assistance for the technology, the buy back can be faster for geo exchange heating systems, said Jerry Brown of Palo Alto Utilities, if installed on homes lying beyond the reaches of conventional gas lines. These homes, like those in Palo Alto southwest of Foothill Expressway, primarily use relatively expensive propane heating, so the savings from a cheaper alternative can be huge, he said.

Through holes near 7 inches in diameter and 300 feet deep, the system's tubes extend from the house into the ground where they push and draw air. A 3,000-square-foot house requires anywhere from five to 10 pipes, said Brown, which merge into a larger pipe that filters the air as it enters the home.

The systems also require a compressor, which can generate or suppress heat, but because the earth's temperature stays at a constant 52 degrees, said Brown, the compressor does less work than an air-conditioning system.

Aside from the air filter, which should be replaced annually, the systems require little maintenance, said Brown, because there is no gas or combustion. This also makes geo exchange much safer than standard heating.

The lack of gas also makes the systems environmentally friendly by reducing the use of fossil fuels.

"When you use less energy, it benefits everyone," he said.

However, Joye said, all homeowners can save plenty of energy, and spend less money on their electric bill, whether they use alternate energy or not. Efficiency methods such as using fluorescent lights, can greatly reduce utility costs.

"Future generations win if we take action today," she said.

Armstrong shares her attitude, and said he wishes more people would find ways to conserve energy.

"The more we do it (use renewable energy), the more we pave the way for the future," he said.