More Sun for Less: Solar Panels Drop in Price

Aug 31, 2009 | 7:46 AM

INMAN SOLAR NOTE:  Prices are down, so now is a great time to ‘go solar’.  Historically, as solar prices drop, incentives will drop with them.  Why?  The states and utilities that subsidize these projects don’t want to give money away.  They set incentives at levels that drive just enough people to invest in solar to meet their renewable energy goals.  So now is a good time to get it while the gettin’s good.  Send comments to .(JavaScript must be enabled to view this email address) .  Thanks!

When Greg Hare looked into putting solar panels on his ranch-style home in Magnolia, Tex., last year, he decided he could not afford it. “I had no idea solar was so expensive,” he recalled.  But the cost of solar panels has plunged lately, changing the economics for many homeowners. Mr. Hare ended up paying $77,000 for a large solar setup that he figures might have cost him $100,000 a year ago.

“I just thought, ‘Wow, this is an opportunity to do the most for the least,’ ” Mr. Hare said.  For solar shoppers these days, the price is right. Panel prices have fallen about 40 percent since the middle of last year, driven down partly by an increase in the supply of a crucial ingredient for panels, according to analysts at the investment bank Piper Jaffray.

The price drops - coupled with recently expanded federal incentives - could shrink the time it takes solar panels to pay for themselves to 16 years, from 22 years, in places with high electricity costs, according to Glenn Harris, chief executive of SunCentric, a solar consulting group. That calculation does not include state rebates, which can sometimes improve the economics considerably.

American consumers have the rest of the world to thank for the big solar price break.

Until recently, panel makers had been constrained by limited production of polysilicon, which goes into most types of panels. But more factories making the material have opened, as have more plants churning out the panels themselves - especially in China.  “A ton of production, mostly Chinese, has come online,” said Chris Whitman, the president of U.S. Solar Finance, which helps arrange bank financing for solar projects.

At the same time, once-roaring global demand for solar panels has slowed, particularly in Europe, the largest solar market, where photovoltaic installations are forecast to fall by 26 percent this year compared with 2008, according to Emerging Energy Research, a consulting firm. Much of that drop can be attributed to a sharp slowdown in Spain. Faced with high unemployment and an economic crisis, Spain slashed its generous subsidy for the panels last year because it was costing too much.

Many experts expect panel prices to fall further, though not by another 40 percent.

Manufacturers are already reeling from the price slump. For example, Evergreen Solar, which is based in Massachusetts, recently reported a second-quarter loss that was more than double its loss from a year earlier.

But some manufacturers say that cheaper panels could be a good thing in the long term, spurring enthusiasm among customers and expanding the market.  “It’s important that these costs and prices do come down,” said Mike Ahearn, the chief executive of First Solar, a panel maker based in Tempe, Ariz.  First Solar recently announced a deal to build two large solar arrays in Southern California to supply that region’s dominant utility. But across the United States, the installation of large solar systems - the type found on commercial or government buildings - has been hurt by financing problems, and is on track to be about the same this year as in 2008, according to Emerging Energy Research.

The smaller residential sector continues to grow: In California, by far the largest market in the country, residential installations in July were up by more than 50 percent compared with a year earlier. With prices dropping, that momentum looks poised to continue.  John Berger, chief executive of Standard Renewable Energy, the company in Houston that put panels on Mr. Hare’s home, said that his second-quarter sales rose by more than 225 percent from the first quarter.  “Was that as a product of declining panel prices? Almost certainly yes,” Mr. Berger said.

Expanded federal incentives have also helped spur the market. Until this year, homeowners could get a 30 percent tax credit for solar electric installations, but it was capped at $2,000. That cap was lifted on Jan. 1.

Mr. Hare in Texas cited the larger tax credit, which sliced about $23,000 from his $77,000 bill, as a major factor in his decision to go solar, in addition to the falling panel prices. Sensing a good deal, he even got a larger system than he had originally planned - going from 42 panels to 64. The electric bill on his 7,000-square-foot house and garage has typically run $600 to $700 a month, but he expects a reduction of 40 to 80 percent.

Mr. Berger predicts that with panel prices falling and the generous federal credit in place, utilities will start lowering rebates they offer to homeowners who put panels on their roofs.

One that has already done so is the Salt River Project, the main utility in Phoenix, which cut its homeowners’ rebate by 10 percent in June. Lori Singleton, the utility’s sustainability manager, said the utility had recently spent more than it budgeted for solar power, a result of a surge in demand as more solar installers moved into Arizona and government incentives kicked in.

California has been steadily bringing down its rebates. An impending 29 percent cut in rebates offered within the service area of Pacific Gas and Electric, the dominant utility in Northern California, means that “with the module price drop over the last few months, it is pretty much a wash,” Bill Stewart, president of SolarCraft, an installer in Novato, Calif., said in an e-mail message.

Even if falling rebates cancel out some of the solar panel price slump, more innovative financing strategies are also helping to make solar affordable for homeowners. This year about a dozen states - following moves by California and Colorado last year - have enacted laws enabling solar panels to be paid off gradually, through increased property taxes, after a municipality first shoulders the upfront costs.

Some installers have adopted similar approaches. Danita Hardy, a homeowner in Phoenix, had been put off by the prospect of spending $20,000 for solar panels - until she spotted a news item about a company called SunRun that takes on the upfront expense and recovers its costs gradually, in a lease deal, essentially through the savings in a homeowner’s electric bill.
“I thought well, heck, this might be doable,” said Ms. Hardy, who wound up having to lay out only $800 to get 15 solar panels for her home.

Pasted from http://www.nytimes.com/2009/08/27/business/energy-environment/27solar.html?_r=1

EPA: “Greenhouse Gases a Danger”

Jun 1, 2009 | 3:39 PM

March 23, 2009, 2:10 pm
E.P.A. Proposal Calls Greenhouse Gases a Danger to the Public
By Kate Galbraith

INMAN SOLAR NOTE:  You probably are on board already with the dangers on carbon emissions.  What is significant about this article is that it lays the foundation for carbon taxation, which will likely have a profound effect on all sources of energy.  Send your comments to .(JavaScript must be enabled to view this email address) .  Thanks!

The Environmental Protection Agency has sent a proposal to the White House that would label carbon dioxide a danger to public welfare - a key precursor to regulating greenhouse gas emissions as pollutants.  The long-awaited finding, sent to the Office of Management and Budget, stems from a 2007 Supreme Court decision in which the agency was found to have the authority to regulate emissions that contribute to global warming.

If finalized, the proposal would permit the agency to begin such regulation - which the Obama administration has signaled is a priority.

In an e-mail message to Green Inc., White House representatives asked us to clarify: “The President has made clear that to combat climate change, his strong preference is for Congress to pass energy security legislation that includes a cap on greenhouse gas emissions. The Supreme Court ruled that the E.P.A. must review whether greenhouse gas emissions pose a threat to public health or welfare, and this is simply the next step in what will be a long process that engages stakeholders and the public.”

“This issue is clearly on a fast track,” said Frank O’Donnell of Clean Air Watch, who welcomed the news. “There’s absolutely no doubt about it because this is cleaning up unfinished business from the prior administration.”  A draft document obtained recently by Greenwire outlined the E.P.A.‘s proposed approach, which, according to the document, suggested labeling carbon dioxide as a danger to public health and welfare.  The Washington Post reported Monday that a finished proposal had been sent to the White House on Friday.  The proposal, said Mr. O’Donnell, “sends an unmistakable signal that the Obama administration is moving forward on this issue and it will certainly have a backstop ready if Congress doesn’t act.” He was referring to the possibility that Congress could pass cap-and-trade legislation to limit greenhouse gas emissions.  If the rule is finalized, “It will essentially trigger an obligation and an intention to do some regulating, including motor vehicles and electric power plants,” Mr. O’Donnell said.

Charles Territo, a spokesman for the Alliance of Automobile Manufacturers, said that the auto industry would submit comments during a public comment period before the rule is finalized.  “Regardless of whether or not an endangerment finding is made, manufacturers believe that fuel economy and greenhouse gas emissions standards should be set at the maximum feasible level,” he said.

He also argued that any emissions standards should be set at a “cost-effective” level.