Concern for the environment is coupling with economic opportunity in one Ahwatukee Foothills neighborhood where two men are convincing their neighbors to buy solar energy in bulk.
Greg Giordano and Sean Scherer have spent the past three weeks knocking on doors, selling neighbors on the idea of installing solar systems at the same time. They’ve worked out a deal with a local solar company to offer the neighborhood a discounted rate in exchange for guaranteeing them several customers.
Three neighbors in the neighborhood, located at the northwest corner of 48th Street and Elliot Road, are committed so far, and another two strongly considering it, Giordano said.
Giordano has a strong interest in the environment. He frequently rides his bike, is eagerly awaiting the release of new electric hybrid car models and has done extensive research on the benefits of solar energy: It reduces pollutants in the air since less energy has to be created, which in turn can have positive effects on people’s health; it lowers energy bills; it adds value to homes.
“You’re upgrading your house. You’re making it more valuable. You’re taking money out of the bank and putting it up there,” Giordano said, pointing at his roof.
He and his wife installed a 5-kilowatt solar system in October and liked it so much, Giordano decided to see if he could get other neighbors on board. Prices for solar systems are lower than they were a few years ago, but Giordano figured a group of neighbors could get an even better price if they asked a solar company for a group deal.
So Giordano and Scherer sat down with a neighbor who works as an engineer and had already installed a solar system to determine the highest quality types of panels and installations. They then approached several companies with their specifications and took a look at the deals they were offered.
“We thought it made good business sense right now,” Giordano said. “People who used to say, ‘Oh, solar is so expensive,’ should take another look.’”
That’s one reason Scherer is interested. Scherer and his wife have priced systems for their home a few years because of the environmental impacts. Cost kept them from putting up a system sooner, but many of the estimates they’ve received have come down two to three dollars a watt from what they were two years ago, he said.
On top of a lower up-front cost, Scherer expects his electric bills to be reduced $80 to $90 a month once his 5-kilowatt system is installed.
Between the environmental impact and the cost savings, there’s something about solar that appeals to just about everyone, Scherer said.
“For some people, it’s about the environment, the future,” Scherer said. “For other people, they want to know how much money they’re going to save. This works for either side.”
The price for solar systems is coming down for two primary reasons: supply is outpacing demand due to the economy and the price of silicon has come down, said Russ Patzer, CEO of Sun Valley Solar Solutions, the company the neighborhood is working with.
There are also incentives available for buying residential solar systems from most power companies and the government. Current Salt River Project rebates are $2.15 per watt installed, said Lori Singleton, manager for sustainability initiatives and technologies with SRP.
The maximum rebate is for 5 kilowatts, which equates to $10,750. Arizona also offers a $1,000 tax credit, and federal tax rebates cover up to 30 percent of the system after the SRP rebate.
So while the systems Patzer installs in Giordano and Scherer’s neighborhood will cost between $25,000 and $30,000 up front, depending on the type of panels residents pick, the systems will cost closer to $12,000 once all the rebates go through.
Typical households can realistically reduce their energy needs about 60 percent over the course of the year with a 5-kilowatt solar system, Patzer said.
The long-term strategy for the solar industry is to keep bringing prices down so systems become more affordable, Patzer said. But incentives will also continue to come down.
“If they wait five years to buy a solar electric system, it’s not like the system will be a third cheaper than it is today,” he said. “The price will be a third cheaper, but the rebates will be a third cheaper.”
Singleton said SRP started to reduce its rebates sooner than expected after experiencing high demand. SRP gave incentive rebates to 260 customers in May 2008 through April 2009. That jumped to 878 from May 2009 until now.
Singleton thinks lower costs, incentives, a focus on energy savings and cost are driving that popularity.
“We hope that the market is able to sustain itself without the utility incentives in the future,” she said. “We’re just waiting to see what prices do over the next few years.”
Still, the up-front cost is one thing that keeps a lot of people from installing solar systems, Patzer said. Some large solar installation companies work with banks to finance solar panels at a rate that about matches energy cost savings, but that’s not always available, he said.
Giordano would love it if a bank approached his group with an offer like that. He probably won’t benefit from the deal financially – he may add a solar shade structure to his backyard, but he’s already paid for his rooftop system – but the environmental impact will benefit everyone, he said.
Giordano also hopes this creates a “solar pocket” in Ahwatukee. Between the people who already have solar systems and the ones looking to install them, the neighborhood will have about eight homes in a two-block radius with solar systems by July, he said. That, in turn, could have another advantage.
“We’re friends with our neighbors around here,” Giordano said. “We thought that if we have like-minded people, we’d bring in (new residents who are) smart, fiscally responsible, environmentally-minded people.”
Patzer said that he has installed multiple solar systems at once in eight or nine neighborhoods, but he went to the neighborhoods with the deal. This is the first neighborhood that has come to him
“You can always get purchasing power by a large group of people,” Patzer said. “That’s basically what they did: they went to three or four install companies and said we can guarantee you this many customers.”
Giordano and Scherer hope more neighbors join their group. The systems going into their neighborhood will be installed in June, and neighbors can take advantage of their deal if they get in on it in the next two or three weeks. Giordano asked interested neighbors to contact him at firstname.lastname@example.org
But Giordano also hopes other neighborhoods copy their idea to approach companies about buying several solar systems at once.
“We want the whole country, the whole world to do this,” Giordano said. “But especially here, because we have so much sun.”