By Barbara Kessler
Green Right Now

Solar roofs make sense in many ways. They cut down on greenhouse gases, create local jobs, protect home owners from electricity rate hikes and provide the best, personal “energy security” money can buy.

A neighborhood in Fremont moves into solar power, a major step toward energy independence. (Photo: Erik Feldmeier.)

Yes, solar panels are the answer, or would be the answer, if they didn’t cost so much. If these glimmering technological wonders were affordable, Americans would be slamming down the doors of Walmart (which would surely be selling them if they were cheap) to grab some. Instead, we are perpetually scratching our heads about solar power, wondering: When will it be affordable? If I buy now will I miss the next wave of innovation and the price declines?

To try to sort out what’s possible, we took a look at one neighborhood in Fremont in the Bay Area where solar entrepreneur Klaus Feldmeier, a Silicon Valley semiconductor and solar equipment exporter, and his son Erik, shared the details of the solar installations they did for themselves and two of their neighbors.

Feldmeier equipped these three roofs with enough solar generation capacity to take them all into the lowest rungs of the PG&E pricing hierarchy. In other words, these homes will use the grid lightly, and will at times even send power back to the grid, essentially saving money both through their reduced energy needs and from dividends back from the power company.

Did we mention this is in California? The state offers both generous tax rebates for installing solar roofs, under the Go Solar California program, and also requires power companies to buy back excess power from eligible homeowners using solar power — a process known as net metering. Residents of California, where solar power was developed, enjoy these twin perks as well as federal rebates.

So Lesson Number 1: Live in California, or another state that has good solar deals. (See the 13 states with the best government incentives at a website named DSIRE.)

Feldmeier didn’t stop there, however. As an importer of solar panels, he found the best deal he could for his clients, and that turned out to be purchasing photovoltaic panels made in China.

These solar panels, imported from China, create a quality, yet affordable rooftop array. (Photo: Erik Feldmeier.)

Feldmeier knows that might not thrill the U.S. labor community. But it was critical to getting the price into a range that he believes puts solar in reach, for his neighbors and the market at large.

It would be nice if the panels were made in the U.S., he says, but the better pricing of the Chinese-made panels, brings the total project cost down to under $7 per watt, well below the $8 per watt (and up) that many other solar rooftop arrays cost.  “It makes it affordable. It makes it make sense to go solar,” he says.

And there’s no loss of quality, he says, explaining that Chinese solar panels are not like Made in China trinkets. Solar is a mature industry in China, which produces more than 65 percent of all panels used in the world, he says.

“They’re going into Europe, into Spain, into Italy and they’re coming to the US. These are extremely high quality panels,” Feldmeier explained, adding that one company he uses, Ningbo, has been in the business for 45 years in China.

In Feldmeier’s view, the horse is out of the barn on solar panels; competition is worldwide, and the consolation is that the installation must be done locally.

His company, Silicon Solar Group Inc., sources solar panels from three suppliers in China, where he learned his way around working as a Silicon Valley company executive. Feldmeier’s other company, Silicon International, ironically, exports American semiconductor and solar manufacturing parts to China (thereby employing American labor).

Go figure. It’s a global economy.

Key components for the overall package, though, do come from the U.S. The micro-inverters that help link and manage the multiple solar panels are designed and manufactured in the U.S. by Enphase. They allow a homeowner to pinpoint dirt or damage to solve any slack in performance. Panels can then be repaired or replaced separately, making today’s solar rooftop arrays much more manageable than some older designs, says Erik Feldmeier, who handles sales and marketing for the family business.

The Feldmeiers use a local installer for their projects, one they’ve vetted and feel confident about. They also feel that their ties in China are solid, and they are able to access the best products there thanks to Klaus’ 25-plus years in the silicon industry and Erik’s ability to speak Mandarin and Cantonese. The Ningbo panels have a strong guarantee against degradation, Klaus says.

Feldmeier's house gets solar panels that he expects will last more than two decades, well past their pay off point.

Now let’s talk ROI – that’s “rate of return” for those of you who didn’t get enough sleep last night.

Klaus Feldmeier has figured the estimated ROI on the systems he has installed on Monteclaire Court in Fremont to be under 8.5 years, no more, and possibly less. He figured conservatively, without factoring in any buyback through net metering from PG&E, which will surely occur.

The total cost of these projects would be eye-popping for most Americans. They were large scale, as residential panels go, being installed on $1 million-plus San Francisco-area homes. But after rebates, those costs slid down.

Each homeowner installed a system capable of producing between 8 to 8.7 KiloWatts. The upfront cost of the solar panels, with installation:  $46,000 to 52,000.

But with tax rebates, California’s solar rebate and the federal tax credit of 30 percent, the final costs came to around $30,000. The homeowners paid up front and didn’t use any special financing. (But remember, they’ll make up this cost in saved electricity bills within seven years if Feldmeier’s spreadsheets are accurate.)

So, Lesson Number 2 would have to be: Live in California, or another state that provides substantial supplemental rebates on the upfront cost of your solar project, and also have some savings ready to go, or wait until special financing for solar roofs, known as PACE financing, is put back in action. (Read about PACE financing here, and how it’s been held up by the mortgage industry concerns.)

At this juncture in our conversation, Feldmeier points out that many homes, say those half the size of these deluxe Bay Area mini-manses in his ‘hood, could get by with smaller solar installations in the range of $15,000 to $18,000 after rebates.

Now, in some neighborhoods, solar panels of any size might face homeowner resistance, such as an HOA-controlled neighborhood that’s not accustomed to seeing shiny roofs, or doesn’t fear rolling brownouts, like they’ve experienced in California.

Which brings us to Lesson Number 3:  Live in California, where people understand that solar roofs are beneficial, or another like-minded state. (Actually, Texas, New York, Pennsylvania and most of the most populous states offer state and/or local rebates, with the ironic exception of the Sunshine State, Florida.)

OK, enough lessons.

Adding a solar system, like adding landscaping, can enhance the appeal of a home, most people agree, and Feldmeier goes even further, while acknowledging that he’s biased, to praise not just the practicality but the aesthetics of solar roofs.

“I have to say that the installation that was just done (on Montclaire) makes the home look more beautiful,” he said. “We feel very good about it. One thing (that was a goal) was always, how can we help our community and society in general?

“And by going solar, you’re reducing the carbon footprint.”

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