Crisis Fuels Solar Power Sales in Sacramento Area

Edmond Murray hadn’t sold a residential solar water heating system in nearly four years. But in the past month, his Sacramento company has sold 10. And he’s likely to ring up more sales as consumers stung by soaring natural gas bills and alarmed by the daily threat of power outages search for alternatives to heat their water and power their homes.

(condensed from the Sacramento Bee, Feb 13) “Two months ago, who would have thought,” said Murray, owner of Aztec Solar. “It’s happened so fast. I have had to dust off the old sales presentation manual. I’m putting together a plan to seize the opportunity.” Across town, Solar Depot has fielded call after call about installation of expensive home photovoltaic systems, which convert sunshine into electricity. Daily telephone volume is up 33 percent. “I have 20 to 25 customers that are serious about purchasing a system. If the crisis continues, we will see more people pay attention to alternative energy,” said Roy Mizany, vice president of Solar Depot, which has offices in Sacramento and San Rafael. Indeed, California’s energy crisis has rekindled consumer interest in sun power, fueled brisk sales for solar energy companies and rejuvenated an industry that for years has tried to make inroads into the mainstream consumer market. “We’re seeing a lot more retailers coming into the market,” said Sanford Miller of the California Energy Commission. “Because of the crisis, people are looking for alternatives. Suddenly, people are looking at solar in a different light.” Worldwide, more than $2 billion in solar products are sold annually with U.S. companies capturing about 44 percent of those sales. Solar and renewable energy use will double by 2010 and create more than 350,000 new jobs, according to the Solar Energy Industries Association, a Washington, D.C.-based trade group. Now, the prospects for even greater growth and sales are looming as the energy crisis drags on. Some early indicators of consumer interest in solar: A 3-year-old state-administered program offering rebates averaging 20 to 30 percent of the purchase price of a solar photovoltaic system has received more applications during the first two months of 2001 than it did for all of 2000. In Northern California, the rebates apply to Pacific Gas and Electric Co. power customers. Applications, averaging 250 a month for 2001, are expected to rise in the coming months. About $40 million remains in the rebate fund. “We’ll see this pot go down significantly by June,” Miller said. Energy Commission officials are being inundated with calls about a 5-week-old rebate program for new domestic hot water and pool heating systems and photovoltaic battery storage units. Caught off guard by the sudden surge in interest, state officials are scrambling to establish guidelines for the program, which has budgeted $1 million for rebates (of up to $750) this year. A six-day photovoltaic design and installation workshop in Sacramento is booked up. There is an unprecedented waiting list of 56 people for this week’s workshop, according to Solar Energy International, a Colorado-based, nonprofit educational organization conducting the course. “Our phones are ringing off the hook. People are losing faith and trust in their utility companies,” said Ed Eaton, an instructor at Solar Energy International. “The situation is really driving the industry into more production and more marketing, which will equate into more sales.” In the early 1980s, solar energy industry boomed and fledgling companies thrived in a market sparked by government tax credits and incentives. Then, many businesses struggled after the tax breaks were eliminated. Get-rich-quick companies vanished. “We have gotten black eyes from solar companies that have come and gone. They set up shop with marketing schemes,” Murray said. “I’m just a little bit concerned that we’re going to get more shysters (again) in this business.” Over the years, surviving solar energy companies stayed in business by installing pool heating systems, which proved to be more economical than natural gas units. On the other hand, solar water-heating systems, ranging from $3,400 to $4,000, were a tougher sell, especially when natural gas prices were low. In the past, solar hot-water heaters didn’t save consumers any more than natural gas units. The benefits of solar were purely environmental: No harmful nitrogen oxide and carbon dioxide emissions into the air and savings in fossil fuel use. At best, companies like Sierra Pacific Solar in Rancho Cordova sold a handful of solar hot-water systems every quarter. “That picture is going to change now. The return on investment for putting in domestic hot-water heaters is going to make sense,” said Mike Daly, president of Sierra Pacific, one of the largest solar contractors in Northern California. Along with the state rebate and savings on today’s gas bill, the solar hot-water system will pay for itself in about five years. “People don’t do anything unless they have pain,” Daly said. “They’ll spend money to get out of pain. The pain has arrived. They’re getting their (utility) bills now and we’re starting to get calls.” Homeowners also are exploring pricy photovoltaic systems, which range from $5,000 to $30,000 or more, depending on the power generating capacity. For an average 2,500-square-foot home, the system will cost about $25,000. More than 10,000 U.S. homes are powered exclusively by solar energy often in remote areas where hooking up to a utility’s power line would cost tens of thousands of dollars. Another 200,000 homes use some type of photovoltaic solar technology. In the Sacramento Municipal Utility District area, about 3,200 solar water heating and 450 photovoltaic systems are in place. “Interest is way up on photovoltaic system purchases. I’m getting 25 to 30 calls a day,” said Les Nelson, executive director of the California Solar Energy Industries Association. “But it’s important to realize that these systems are expensive. Whether that translates into people buying them remains to be seen.” New home construction could be a key market for the solar industry. But it’s tough market to crack, even with efforts by the U.S. Department of Energy. Under the Clinton administration in 1997, the federal government launched an ambitious initiative to install solar roofs on 1 million homes by 2010. The solar campaign received another boost last month from a Southern California developer. Shea Homes, the nation’s 10th largest home builder, unveiled a plan to install solar water-heating systems on close to 300 homes under construction in northeastern San Diego County. Photovoltaic systems will be installed on 100 of these. “The buyers are definitely interested in photovoltaics,” said Deborah Childress, a Shea Homes San Diego spokeswoman. Solar energy officials are banking on the Shea project to set an example for the rest of the building industry. “It’s hard to get developers to look at anything, but the bottom line,” Murray said. “If it makes sense, and they can sell their houses with solar on it, they’ll do it.”

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