Homebuyers who want to go greener with solar energy are left with a few main challenges, Nautilus Solar CEO Jim Rice said in an interview with HousingWire.
Once folks are through the mental gate on sustainability, Rice said that they have to overcome two things: The financial side and the technical side.
“People are more broadly accepting the asset class, and banks are coming into the market,” Rice said. As a result, people will own the system themselves and not have to worry about the lease.
A recent study on solar power in the residential market revealed that there is demand from homebuyers for solar energy homes, finding that buyers consistently have been willing to pay more for homes with photovoltaic energy systems. However, some homeowners complain leases on the panels obstruct property sales down the line.
The study – “Selling into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes” – found that buyers were willing to pay an average of about $4 per watt of PV installed – across various states, housing and PV markets, and home types. This equates to a premium of about $15,000 for a typical 3.75 kW PV system.
Rice explained that over this last decade he has seen a greater willingness to switch to solar energy. “You have this evolution of folks who are saying it is always a good thing to do,” he said.
Since 2010 to the end of 2014, residential solar facilities prices have cut in half as the idea becomes more widely accepted.
SolarCity (SCTY) recently announced that it created a new investment program with Bank of America Merrill Lynch (BAC) to finance an estimated $400 million in solar power projects in 2014 and 2015. Google is a big investor.
However, demand for solar power varies across the nation.
Rice ventured as far as to say that solar power energy is now normal in places like California, New Jersey, Massachusetts and Nevada, while places such as the Midwest still have a ways to go.
In places like the Midwest, the pay-back period is longer. But in California, the electric rate is around 22 cents for a kilowatt-hour, so the pay-back period could be less than five years.
Utah, Oregon, Massachusetts and New Jersey also see higher demand, but it's not because their rate is high but because they have more incentive to offset the cost.