Selling the Source

By Marilyn Michelson | Nov 15, 2006
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Solar power for the residential market

Using solar energy to complement or replace a home’s power supply is expensive and requires difficult financial and technical decisions on the part of the electrical contractor and the customer. Because of the high cost of semiconducting materials, the initial expenditure of installing a solar energy system is its main disadvantage. It can take eight to 10 years to get a return on a person’s initial investment, and not everyone considers this when they are opting for an alternative energy solution. There are a few facts that can help you decide whether you want to include this service along with what you already provide.

The basics of technology

First, a solar energy system that enables the electricity generation is independent from the power grid supplied by a local utility company. As an example, if photovoltaic (PV) panels are installed near or on a home, they are designed to interconnect with the existing utility service. Full-time sunshine is not a key factor to enable solar collection. Germany, not noted for sunny weather, is one of the biggest users of solar energy.

PV panels, a charge controller, a battery and an inverter are all required components for a typical solar powered electrical system, which produces common 110/220-volt power. The solar cells are located in the panels that are mounted on the roof to convert sunlight directly into DC power. The inverter converts this DC power into AC that can be used in the home.

PV panels can be wired in series or in parallel to increase voltage or amperage respectively. The panels charge the battery, and the battery provides DC voltage to the inverter. The inverter is the device that changes DC power stored in a battery to standard 120/240V AC electricity (also referred to as 110/220).

The battery in a solar power system should have sufficient capacity to supply needed power during the longest expected period without sun or during extremely cloudy conditions.

Residential markets for solar

The residential solar market is dominated by retrofits. During a restoration is a good time for thinking about installing new power sources and upgrading home amenities. However, new home construction is a growing solar power market in California and other states where “green home” developments have become very popular among consumers.

Electricity is also needed for battery charging, campers, boats, remote houses, water pumping, backup power plants, pool heating, domestic hot water, space heating, etc., and solar may just be the perfect solution for these installations.

Presenting solar in the best light

Before getting into this industry, find out whether you have access to potential customers for the technology. As mentioned before, solar power represents a substantial investment, and the contractor or marketer needs to develop mechanisms to find higher income locations.

You could then present the economic factors to customers to see if they are interested. Consider mentioning the length of time it will take customers to get a return on their investment, but also stress that they alleviate these costs. Explain the federal tax credit—capped at $2,000 for residential systems—and other incentives available from various states. The incentives provided by the state or federal government allows them a payback within a reasonable amount of time.

What’s their motivation?

There are two main reasons for installing a residential solar power system. The most obvious is foregoing high electricity costs makes for better savings in the long run. In addition, the utility district will generally provide local rebates where the upfront costs can be lowered. You can find information on the Internet about rebates throughout the United States. See the Database of State Incentives for Renewable Energy at It shows rebates and incentives by state and utility districts.

There are other purposes for motivating curious customers. It may be that the customer was attracted to green energy solution, perhaps because it would reduce smog or the country’s dependence on foreign sources of oil and gas. It is a way to preserve the environment for the next generation.

The customer may also be able to sell solar electricity back to their utility, which is a simple, affordable way to generate their own power while helping offset some of the initial expenses. But how do they do this? According to Solar Depot Inc. in Petaluma, Calif., (, “A net-metering law, in place in virtually every state now, ... allows the solar system owner to send power that they generate back to the utility grid and receive a credit at the price they would otherwise have been charged for that power. This way, they build a credit when they are not at home consuming power. They can use this credit later when they are home, thus allowing them to ‘net out’ their electric bill ideally.” This can substantially reduce system costs. Net metering rules by state can be found at

If money is no object for your potential solar power customer, you may be able to appeal to the consumer’s desires to have something no one else has. Some consumers—often called the early adopters—will purchase a high-end system just to be the first.

Realize that a person’s rationale for wanting solar energy for their home is usually weighted by the idea that they can fix their electric prices for the future (30–40 years) at today’s cost, with proper financing. Since the cost of electricity has been increasing steadily every year, solar energy allows one to go solar and generate one’s own power, and once the cost of the system has been paid off, they are generating free electricity.

Training and planning for the future

You’ve found your customers, you’ve made your pitch. Now they are interested. What’s next? Get yourself certified in the solar business. The North American Board of Certified Energy Practitioners (NABCEP) is a well-recognized volunteer organization in this industry. The NABCEP works within the industry with credentialing and certification programs for solar electric installers and for solar thermal installers. Those applying for a PV Installer Certification must meet one out of seven prerequisites, and one is that they are an existing licensed contractor in good standing in solar or electrical-construction related areas with one year of experience installing PV systems. See for full details.

It is also important for the contractor/installer to be able to provide some kind of service agreement to their customer. Discuss the services you will provide, how long they will be in effect, how you will be available to troubleshoot a problem, and what costs would be. Be able to explain who will be responsible for maintaining the customer’s system and what kind of training the contractor/installer will provide.

Learn about rebates, for they are complex. For example, the Sacramento (Calif.) Bee recently had an editorial about the state rebate program designed to give billions of dollars in rebates in exchange for 1 million solar roof installations over the next 10 years. That Solar Initiative was approved by the Public Utilities Commission but has been reduced in its value and scope. To keep up with what is going on in your state, can help. It also contains information about construction standards and contractor licensing.

High-powered futures

Even though costs are high now, there may be a good future for solar. As explained on, “The Securing America’s Energy Independence Act [a bill recently introduced to the House and Senate], home owner solar credits would be extended for eight years, through the end of 2014. And the credit, now 30 percent of a system’s cost, would be fatter. Now, it is capped at $2,000 per system. Instead, it would be calculated at $1,000 per half-kilowatt. With a typical system of 3 kilowatts, that would translate into a $6,000 tax break. The credit would even be given to taxpayers stuck in the Alternative Minimum Tax.”

Find those who are interested in generating their own power or who want to reduce their energy costs by selling power back to their utility. Find the markets in your area, and see if you have access to potential customers. Converting to solar energy is expensive and incentives are needed. But for the right audience, the technology can be just what they want.            EC

MICHELSON, president of Jackson, Calif.-based Business Communication Services and publisher of the BCS Reports, is an expert in TIA/EIA performance standards. To contact her, see or e-mail [email protected].





About The Author

Marilyn Michelson, president of Jackson, Calif.-based Business Communication Services and publisher of the BCS Reports, is an expert in TIA/EIA performance standards.





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