Contrasting the commonly held belief that solar panels are too expensive for the average homeowner, a new Environment California Research & Policy Center report quantifies the economic benefits of installing solar photovoltaic (PV) systems on California homes.

The report, “The Economics of Solar Homes in California,” was released December 13 at the Solar Summit hosted by the state Department of Resources and the Environmental Protection Agency.

California has much to gain from solar power. PV systems harness free energy from the sun when California needs it most—during high demand times such as the hot, sunny summer days when health threatening smog pollution is also at its worst.

In addition, if California were to become a PV leader over the next few years, it could realize significant economic benefits by tapping into the growing national and international market.

As Californians, we all benefit from increased reliability, protection from fuel price volatility, a cleaner environment and a more vigorous local energy economy when a significant portion of the electric grid is supplied by “homegrown” solar power. But solar power faces a number of hurdles that have prevented it from becoming more widespread. Homeowners considering “going solar” often contend with high upfront costs, information barriers, and difficult interactions with utilities that deter many consumers from going forward.

“However, our research shows that these barriers can be overcome and solar power can be made more affordable for residential homebuyers if California implements the right policies and incentives,” said Bernadette Del Chiaro, clean energy advocvate for Environment California Research & Policy Center.

A closer look

Environment California Research & Policy Center’s latest report, “The Economics of Solar Homes in California: How Residential Solar Photovoltaic Incentives Can Pay Off for Homeowners and the Public,” estimated the amount of money an average new homeowner would save over the course of the solar energy system’s life.

- On average, residents of the nine communities we examined could expect to save $4,500 over the lifetime of their solar investment, with savings of $68 in the first year (if the system is financed as part of a 30-year mortgage). The net present value of that investment would average approximately $1,500.

- The benefits a homeowner can expect from solar PV varies from place to place based on several factors—most importantly, the price of electricity.

These results suggest that an aggressive state solar PV buy-down program, coupled with other incentives and standards for the inclusion of solar power in new homes, could benefit residential homebuyers, utility ratepayers and the state as a whole.

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