Rooftop solar: 3 simple ideas to maximize its growth potentials
Each one of us has a role to play in reaching a zero carbon future and one of the most practical steps for us is to start using rooftop solar. Unfortunately, for all the talk about their commitment to meeting COP26 goals and maximizing the use of renewable energy, governments and key entities such as banks and builders aren’t yet doing enough to make it easier for you and me to transition to rooftop solar.
Rooftop solar has a potential to reach at least 57% of 117M households in the US, from a current estimation of only 4%, which would generate a minimum of 1000 TWh which is about 75% of residential consumption. This underlines the need to tackle the shortage in rooftop solar more aggressively. Afterall unlike utility and commercial solar, it doesn't need huge swath of land clearing or nature’s disruption. The space is already there, just needs to claimed for solar.
And for those that just want a quick summary, here’s a snapshot of my main arguments on what can be done to accelerate the rooftop solar growth:
Banks: Offer mortgage incentives (eg. better rates etc.) for a Solar PV house
Let us all face it; human beings are in general a lazy bunch; it takes a lot to move a 200 lbs beast off the couch for something which doesn’t impact him that very second. How many people do you know who like the idea of putting solar on their rooftop but don’t have the “time or opportunity” to do it, no matter the economy of solar?
Banks can offer these 2 incentives to encourage homeowners to go solar:
1. Offer about ¼ % lower interest rate for mortgage
2. Provide options to roll in solar installations to the mortgage
Annually about 3.3 millions new homes gets build in the US or roof of an older home likely to gets replaced. If you add to the refinance, then the number goes up a few times, as a home gets refinanced multiple times during its lifetime. In 2020 about 13.4 Million single family home mortgage were originated (purchase and refinance together). A ¼ % lower mortgage interest would have presented a real opportunity to convert a good percentage of those homes to favourably consider rooftop solar.
a. The Math
Let us take the example of a house bought at an average US purchase price of 2020 i.e. at 390K @ rate of 2.75 % APR for 30 years (average rate as of today) with a 20% down payment.
Adding an average rooftop solar system of 8.5kw (to meet an average household annual electricity demand of 10,715 kwh ) would cost $11.800 after Federal and other discounts (per Tesla, one of the least cost providers in US):
As shown below with the banks offering ¼ % lower interest rate, even adding a solar system, would NOT increase the monthly premium, rather it would LOWER it.
Add to that the savings of electricity bill of $117/month (average electricity bill) and it starts to make a very very compelling case for people wanting to go solar.
Lowering the interest rate for energy efficiency is not a new concept. It is already being presented for auto loans (energy efficient cars) by some banks:
Lowering the interest rate for energy efficiency is not a new concept. It is already being presented for auto loans (energy efficient cars) by some banks:
b. Cost to Banks
Here is how we can ballpark costs to the banks. In the US annually we have around 375B US$ of single family loans refinances each quarter. Typically banks charge you 1 point if you want to lower your interests rate by ¼ %. Using that logic, the absolute maximum cost will be 3.75B US$ for all the banks together. Not a huge sum if you ask me as banks will also get increased loan amount (aka additional business) in return as the solar cost is rolled into the loan.
Builder: Take Solar into consideration while building and selling houses
Most of us unfortunately live in homes that weren’t designed for solar. That doesn’t need to be the case going forward.
a. Design roof to maximize its solar potential
Builders currently don’t take the solar capability into consideration while designing roofs. There are all sorts of vents, chimney, skylines etc. sticking outs of any roof all over its area. This is so because the current design is meant to optimize costs to the builder. An extra 10' of plumbing sticking out at the corner or at the ridge may look better, but it would cost another $50 to the builder and so it’s not laid out that way. These protrusions besides looking ugly waste valuable energy real estate that could otherwise be used to harness free green energy.
Let us look at one real example. The below picture shows a roof with all the standard obstructions e.g. vents, pipes, chimney etc. all throughout the length of the roof.
And then there is the setback requirement from the county (more on that in the third article), eg. 6' setback space from the top of the solar to the ridge and 3' pathways to the ridge. Once you take all those into consideration, on a 520 sq ft roof space, only 108 sq ft can be practically used to store six 325w panels. That’s 20% utilization. An absolute waste of such a precious and productive (money making) real estate.
Once all the vents are moved out to the ridge (a mere $400 extra cost), the same roof area now easily accomodate 12 standard size panels (3' X 6'), still meeting) the setback requirements, i.e. 100% gain just by moving the vents.
Not to forget the look and aesthetics of the roof offered by well aligned panels in a uniform layout.
b. Offer Solar as an option on a new home
I could never understand why this is not offered already. When you are building a home worth hundreds of thousands of dollars, a builder shows you all sorts of options ranging from faucet’s handles to countertop design and floor choice. But the most important thing, the one which will actually reduce the overall monthly payment to the owner, the Solar Panels on roof, is never presented. Why ?
The builders need to team up with the solar installers and like a zillion other offerings, need to offer solar as an option. A builder installed options will save the customers the hassles in dealing with yet another contractor, will provide the ease of financing (as it will be rolled into the cost of the house) and will definitely look way better than the one installed later.
Governments
Government obviously has a vast role to play in establishing the regulatory framework for rooftop solar but in this blog, I’ll focus on two irritants that people routinely face when it comes to the nitty-gritty of solar systems at home and that local governments can address — what’s the usable roof area of their home for solar panels and who can install it for them. Believe it or not, different regulations make the answers more complicated than they should be.
a: Break the monopoly of solar installers and let homeowners DIY (or hire independent accredited installers)
As things stand, homeowners are completely dependent on XYZ to install solar panels for them and there’s no technical or safety reason for this to be the case. Let’s look at the components of a solar PV systems:
- Solar PV panels
- Optimizer or microinverter (in some cases)
- Inverter
- Disconnect
- Electrical panels
All the connections on the roof happen as plug-n-play (mc4 connection). The rest happens on the ground or on the side of the roof (inverter, disconnect, and electrical panels). Once a system is designed (easy to outsource for a few hundred dollars and approved by the county, there is nothing here that a well educated homeowner or electrician can’t do. A few states eg. California, North Carolina do permit a homeowner to do this work if the system size is less than 3kw. In Australia, you can do the entire work yourself. No surprise the cost of solar there is about ¼th of US (source).
Permitting homeowners to do the solar install will not only lower the cost and spur growth but will also address the labor shortage problem. If homeowners are not obliged to hire a big solar installer, they can work as a general contractor and can hire services to design, structural analysis, roof work and actual installations from diverse sources to optimize their costs and to get the best value (warranty, service experience etc.) from their solar.
b: Reclaim the lost roof space for solar
More and more counties are now coming up with additions to building codes outlining fire setback requirements for the roof. These requirements regulate how much roof area and pathways to the ridge should be left to handle emergency access to the house.
I don’t know which lobby played a bigger role here, the gas industry lobby or the solar installer lobby but the end result is that these regulations are window washing at the best. Hundreds of square feet of valuable roof space is being wasted in the name of firefighter safety. Take the below snapshot of one such regulations from #MontgomeryCountyMD:
if a firefighter can safely climb up on the roof in 18" pathways as required in one case, shouldn’t that be all that is required in all cases. Add to that if one roof plane is unavailable , one needs to provide 6' setback vs 3' cover for missing setback on other roof (my own case). 6' long pathways to the entire length of the ridge were lost just like that.
The building codes need to be updated to be something that makes sense and is free from lobby’s interferences and maximizes area for solar panels installations while still providing structural safety.
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