State-of-the-art digital homes come with—no pun intended—shocking electric bills. As oil, coal, and natural gas prices soar, alternative sources of energy start to look mighty attractive.

To boot, a smart house can never be a real smart house unless it is energy efficient. Of course, energy efficiency starts with sound construction and insulation. But it should also include the use of passive solar technology wherever possible. As energy costs go nowhere but up, it may soon begin to behoove builders to investigate and incorporate photovoltaic (PV) electricity generation systems into production homes.

BENEFIT ANALYSIS PV technology is expensive. And, in the past, reliability has proved iffy. Now, however, manufacturers routinely offer 25-year warranties on PV collection panels. Still, the power inverters necessary to convert the direct current output of the solar panels to alternating current are normally covered only by five-year warranties. That's a problem, says Joe Wiehagen, senior research engineer at the NAHB Research Center in Upper Marlboro, Md. He says he would like to see warranties that match those of the solar collection panels. According to Marc Cortez, director of marketing for the Sharp Electronics Solar Group in Huntington Beach, Calif., that isn't imminent.

PV systems retail for between $8 and $10 per watt of electricity produced, including the inverter. For a home in a sunny climate such as Southern California, a two-kilowatt system provides plenty of cost-free power, particularly during the warmer months when electricity usage soars. The cost: about $16,000 to $20,000.

The good news is that some states, notably California, New York, and New Jersey, offer rebates—some approaching 50 percent of the cost of the system—to whomever installs it. A builder could recoup much of the cost of the system upfront. And the homeowner would be eligible for up to $2,000 in tax credits under the new energy bill, which became effective Jan. 1, 2006.

In northern states, a four-kilowatt system would be more effective, which would mean $32,000 to $40,000. But when connected to the local electrical grid by a utility that offers net electric metering (in other words, a reverse meter that allows the home system to feed the grid at times of low demand), a homeowner's electric bill can be reduced substantially, sometimes to as low as $0.

BEATS BEING SHINGLE “There's a big dynamic out there that changes the whole perspective, particularly for production builders,” says the NAHB's Wiehagen. “Where the states have incentives, your payback is a lot faster.” Then there is the issue of aesthetics. Most PV systems still use large, rectangular arrays that sit atop a roof. But technology is slowly changing that. Sharp has introduced the ND-60RIUI 62-watt solar roof module. It integrates seamlessly with conventional cement roof shingles (it takes the place of five in a five-foot-by-one-foot rectangle). Triangular modules that fit well with hipped roofs are also available. Sharp handles design and installation for builders through its own subcontractors. Importantly, Sharp also handles warrantee issues.

Currently, 75 percent of the market for PV systems is in California, where builders such as Shea, Premier, and Pulte incorporate PV systems in some developments. But it is starting to spread east, according to Cortez, where the market is getting hotter. Sharp and a handful of other PV systems-makers are selling everything they can produce. This should not prove to be a problem for production builders, though, given the lead times necessary to plan developments, Cortez says.

In the end, incorporating PV systems into their homes should prove to be worth the investment to builders. The prospects of savings on utilities and of environmental responsibility for buyers for whom the quality of the environment is paramount could prove to be a powerful buying incentive.


Learn more about markets featured in this article: Los Angeles, CA.