Understanding Solar Electricity

In order to break into the solar business, which is projected to rise over the next decade, you need to be familiar with the basics.

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As a small-business owner and electrical contractor working throughout the Southeast, Kelly Provence always has been interested in finding ways for homeowners to conserve energy. He'd encourage them to invest in window upgrades, insulation improvements and appliances stamped with the ENERGY STAR seal.

But since he started researching the possibilities of solar-powered homes, Provence discovered a remarkable and relatively untapped power. "I became very fascinated, very quickly," Provence says. "It gave me the feeling that, as an individual, I can create my own energy—and store it. That's a very powerful feeling."

In 2002, he launched a business solely devoted to such projects, Dahlonega, Ga.-based Solairgen Inc. And, while he still needs to do traditional electrical jobs, he's finding enough demand to do several solar home projects per year, with sales-per-job ranging from $20,000 to $100,000. "Customers are starting to understand that the energy savings may not pay for the cost of the installation," Provence says. "But they want it anyway. It's a good, clean source of energy, and it's power that will never shut off on you. In the north Georgia mountain country where I'm based, that matters. During a storm, power will go out and it can take a long time to get it restored with traditional energy."

New Generation
While it's widely considered a newly expanding market niche, solar residential builds are starting to catch on. Since 2003, more than 200 electricians and other installers have been certified by the North American Board of Certified Energy Practitioners (NABCEP) for photovoltaic (PV) installation. That's the technical term for what's more widely referred to as solar panel jobs, most commonly associated with roof-based installations. Via a public-private partnership program now known as the Solar Powers America program (and formerly known as the Million Solar Roofs Initiative), more than 350,000 homes have had solar roofs installed since 1997, when the program began.

What's driving the interest? For certain, many customers fit the classic mold: environmentalists with a stated social awareness. But the new generation is looking to have control of their own power resources, as natural disasters such as Hurricane Katrina have left countless homeowners in the dark for far too long. Starting this year, the federal government is allowing homeowners and businesses up to $2,000 in tax credits for solar installations. "It's an incentive," says Richard King, the photovoltaic research and development team leader for the Solar Energy Technology Program at the U.S. Department of Energy. King also oversees Solar Powers America. "Worldwide, the growth of photovoltaics is really taking off," he says. "Germany will pay more than 50 cents per kilowatt-hour to end users who generate solar electricity from photovoltaics. People there are getting these systems installed in droves. They're literally getting checks in the mail from the utilities instead of the other way around. In the United States, we're starting to see some growth in sales, too. The cost of conventional power is going up, and the cost of solar panel installation is coming down."

King estimates that a 2,000-square-foot home can be solar equipped for as little as $24,000. But it would take homeowners many years to recoup that cost. He and others in the PV industry advise electricians to make this clear to potential customers before agreeing to do a job.

Understand This Niche Market
Still, those associated with the PV industry expect costs to keep coming down, and the demand for solar roof panel installation to increase. With a national tax credit, markets may begin to spring up all over the country. But the first step in getting into the solar business is getting proper training. In fact, there have been some problems associated with electrical contractors jumping into the niche field as a result of demand without such training. "There are several organizations that provide training," King says.

These training centers will get you on a roof and show you how to properly install solar systems. A PV system either can be grid-connected, or stand-alone using battery back-up. Training is important because there are a few common errors that are easy to prevent. Solar systems need to point toward the sun. They can't be shaded, and electrical lines need to be brought into the house from the roof and correctly interconnected to the grid. There have been home projects where the electrician installed the panels in the shade or they made the connection positive to negative instead of negative to positive. If electricians aren't qualified, they can make a simple but costly mistake.

The Malta, N.Y.-based NABCEP remains the certification board recommended by energy officials. While certification is voluntary, it is becoming a useful marketing tool. Among other requirements, the NABCEP solar PV installer certification requires a written exam, as well as experience in the field and/or board-recognized training. Application and certification exam fees are $250, with a recertification fee every three years costing $200.

In his area, Provence is finding that customers are warming up to the concept of solar heating. It helps that manufactured panels pack up to 200 watts of power now, as opposed to 55 watts in the earlier days. And, aesthetically, the PV industry has come a long way—all the better to get the project approved by today's ubiquitous covenant committees. "Now, these panels look just like any asphalt shingle on a roof," Provence says. "It blends right in. My customers aren't really old hippies. Many of them are in the tech field. They know how much power we require all the time. They've been exposed to the need for remote energy. They've educated themselves on solar, and they want to get involved with it."