Solar Improvements for the Home
Once homeowners commit to one form of solar improvement, they soon start inquiring about other options as well. Here's how to answer their need and grow your business.
While roofing skills are needed to install all forms of roof-mounted solar equipment, specialized skills are needed for individual solar applications. In the case of solar-PV systems, the lead installer should have a journeyman level understanding of household electricity, and of direct-current (DC) electricity up to 600 volts. And for companies providing a complete turnkey installation, the ability to tie in new equipment with the existing home is a must. For example, an older home with an outdated electrical infrastructure will require upgrades to accommodate a solar-PV system. Subpanels or new service panel upgrades will need to be installed. This will generally require stucco repair and matching paint to maintain aesthetic continuity.
And if the homeowner wants to install a solar-thermal water-heating system, the lead installer must have specialized plumbing skills, as well as framing and general-carpentry skills, in order to run water lines inside walls.
At Progressive Power Group, a company focused on solar improvements for the home, crews consist of three people with a diversified mix of skills, including electrical, framing, plumbing, and general carpentry. Rather than compete for large-scale solar projects in the commercial and utility sector, we decided to focus on residential installations when several of our existing customers, beginning in 2006, started calling on us to secure state and federal rebates for energy efficiency upgrades to their homes, including solar PV, thermal, and lighting.
The Solar Life of the RileysOur venture into diversified solar products begins with the Riley residence in Huntington Beach, California. The Rileys were frustrated with the lack of lighting in their kitchen, and we presented three options for them to consider: Install a bigger window above the sink, install more canned lights in the ceiling, or retrofit with a solar tube. A skylight was not a viable option; there was too much vertical distance between the roof and the kitchen ceiling. Installing a bigger window not only would be very expensive but would provide only a little extra light, since the exterior wall faced east; the kitchen would be lighter only in the morning. More canned lights would have meant higher energy costs, even with energy-efficient lightbulbs. So the decision was made to install a solar tube.
A solar tube can be thought of as a hybrid skylight. It is compact in size, inexpensive to install, and flexible enough to navigate obstructions in the attic. It consists of a domelike structure that is mounted on the roof like a whirlybird, requiring only a few patches to roofing shingles or tiles. In the ceiling, a small cutout holds a frosted-glass plate with a mirrored duct that connects to the roof-mounted dome. Light passes through the dome, reflects off the connecting duct, and provides light to interior spaces like the Rileys’ kitchen.
Estimating the cost benefit requires a few calculations, all of which are subject to local utility rates, the targeted profit margin, and the cost of alternatives such as windows or lighting. Contractor-related costs for installation are usually around $395 per unit, while the unit itself retails for $800–1,000. Ideally, a contractor would want to install a minimum of three units on one home to keep a crew of two people busy for one day. Estimating payback for the homeowner requires adding up the alternative lighting loads (converted to kW) and multiplying this number by the utility rate (in dollars/kWh) and the amount of time the owner expects to use the light (measured in hours).
Payback (years) = Retail cost / (Load kW x $/kWh x Hours of use) / 365
For the Rileys, the new solar tube in the kitchen offset the equivalent of five 75W lightbulbs for about four hours each day. Since utility rates average about $0.25/kWh in their community, installation of the solar tube resulted in an annual savings of about $137 with a payback of 6.2 years.
The next solar improvement for the Riley household consisted of installing 14 grid-tied solar-PV modules to reduce electric consumption from the local utility. Solar PV has dominated the press over the past few years, when it comes to solar-related technologies. Therefore, we will only highlight the basic payback formula and some professional practices that may help readers to differentiate among the various kinds of contractors who install them. Near our offices in Garden Grove, California, we have seen an explosion of contractors entering this field—from fewer than 10 in 2007 to over 150 in 2010.
To figure payback for solar PV, one must know how much daylight is available for energy production, the quality of the solar modules and inverter converting the sunlight into kWh, and the cost of the installation net of rebates and tax savings.
Payback (years) = Net retail cost / (Daily kWh production x $/kWh) / 365
Experts in solar PV are going to great lengths to differentiate themselves from newer competitors these days. For example, some companies are now giving warranties on energy production measured in kWh rather than manufacturer specifications measured in kW at standard test conditions. So if a company provides a warranty on an average production of 15 kWh per day during a one-year period, and the system produces less than 95% of that energy, the solar installer will correct the problem at no additional cost to the homeowner. However, extra guarantees rarely come at a discount from qualified installers, and homeowners should expect to pay a 5% premium if they want these guarantees.
It has been our standard practice at Progressive Power to provide energy production warranties in addition to manufacturer warranties for solar PV. However, with the increase in local competition and the influx of inexperienced contractors driving prices down, we have had a difficult time getting customers to pay a premium for these warranties. At the end of the day, we wind up with lower profit margins and higher liability. But in lean times, continuing to fund operations has been paramount in creating a business with traction and longevity. The extra bells and whistles on our product have certainly given us an edge on the competition and prepared us for the future.
Solar tubes and solar PV complement each other nicely. One trims electric consumption by providing natural daylight to dark interiors, while the other powers such necessary creature comforts as HVAC, refrigeration, evening light, computers, and TVs. But what about offsetting the cost of water heaters requiring natural gas?
Once homeowners commit to one form of solar improvement, they soon start inquiring about other options as well.
Getting into hot water
Popularized in the late 1970s and early 1980s in California, solar water heating is a simple technology, with low enough costs to provide a lifetime of use and return on investment. Vaillant Solar Systems of Del Mar, California, manufactures a thermal system that uses high-density salts to heat coils in a water tank. The heated saline solution in the tubing creates a natural convection loop from the roof to the tank and back to the roof, minimizing the electrical load on the pump. The result is a very efficient process for heating water for showers, the swimming pool, or the spa.
Solar technology goes beyond heating water and charging batteries to providing electricity and interior light. And contractors with a diversified crew—one with the electrical, plumbing, framing, and general-carpentry skills—can offer their customers all these solar options and install them in a professional manner. In the end, the contractor benefits by keeping the crews busy, and the homeowner benefits from lower utility bills and an improved lifestyle.
Chris Staskewicz is co-founder of Progressive Power Group and has been involved in the solar and energy industries since 2001.
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To learn more about Progressive Power Group, go to www.propowergroup.com.
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