PHILADELPHIA (Reuters) – U.S. demand for residential solar power installations is surging despite an economic recession, thanks to government financial incentives, some easing in credit availability, and increasing public recognition of its environmental benefits, industry executives said Tuesday.
Companies represented at the PV America solar conference in Philadelphia said the volume of their installations as much as tripled in 2008 and they see further gains this year as more people recognise that they can cut their electricity bills by at least 15 per cent with an array of solar panels installed on the roof of their homes.
Geogenix LLC, a New Jersey-based residential solar company with 20 employees, installed about 150 systems in the first six years of its existence until 2008, and expects to do about that number this year alone, said managing member Gaurav Naik. He predicted the company would install at least 300 systems in 2010 when it plans to expand into Pennsylvania and some surrounding states.
“There is unprecedented demand for residential solar systems,” he said.
Faced with a cost of about $50,000 for installation of a 7-kilowatt system on a typical 2,500-square-foot house, a New Jersey homeowner can defray the expense with a $12,500 rebate from the state and a federal tax credit of $11,000, Naik said.
After the first year, the homeowner can also expect a refund check for about $3,200 from the local utility in return for installing the solar panels, Naik said. The owner can expect to save about $1,700 a year in electricity bills, and should recoup the initial investment within five to eight years, he said.
According to industry trade group the Solar Energy Industries Association, there was an overall 16 per cent increase in solar capacity, including commercial installations, in 2008.
Jeffrey Wolfe, chief executive of Vermont-based installer groSolar, said the market has also been boosted by lower prices for solar panels due in part to an increase in the supply of the polysilicon, the raw material used for their construction.
Wolfe argued the industry is benefiting from a cultural change that is more accepting of the need to find alternatives to fossil fuels, in part because of last year’s surge in gasoline prices to more than $4 a gallon.
“People have seen what energy prices can do, and they have come to the end of their rope in denying climate change,” Wolfe said.
Companies are also getting creative in bringing the upfront costs of solar power down for customers. groSolar, for one, is providing financing to customers who are unable to front the $40,000-$50,000 price tag for a typical solar installation. Wolfe’s company now operates a lease program requiring a down payment of $1,000 and then regular monthly payments for use of the system.
In California, Arizona and Oregon, SolarCity installs systems without any down payment from the customer, who then pays a lease fee which typically ranges from $25 to $60 a month, said David Arfin, vice president of customer financing. The company owns and maintains the system but the homeowner benefits from the reduced utility bills, he said.
Arfin said the company’s business tripled in 2008, and it is hiring 100 new installers to help meet “massive” demand.
Naik of Geogenix said financing for solar installations has gotten easier for qualified borrowers since the first quarter of 2009. He cited one client with a high 740 credit score who needed to borrow $38,000 and secured a 10-year loan at prime plus 2 per cent by working with a financial institution that had previously done business with the company.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.