SARATOGA, Calif. -- Here in the Golden State, there's a burgeoning business in selling solar panels for the home. There's also a business in making it less of a headache.
Edward Lortz knows about the headache side. Two years ago, he began researching solar panels for his home in Potrero Hill, a San Francisco neighborhood that overlooks the bay.
He expected an avalanche of data, but he figured he could handle it. In his 30-year career as a marine engineer, "one of the complaints was that I overanalyze things. Still do."
Months went by. He gathered facts. Soon, the picture became so complex, he could only make sense of it in a spreadsheet.
"I had a lot of different bids that I was analyzing in terms of cost and design factors, the rebates and incentives and what cash outlay and what the tax credits would be. And cost per watt," he said. "So yeah, it was a pretty sophisticated spreadsheet."
So how did Lortz end up with the 2-kilowatt system that chops his monthly power bill to $5? Simple: He waited. Then he let someone else take the hassle.
This year, solar policies shifted: Suddenly, state and city incentives would cover more than half of the system's $17,000 cost.
Lortz was ready to move, but then he found someone willing to do the legwork for free: a company called One Block off the Grid, or 1BOG. This group had already negotiated a clear price with the solar merchant Lortz wanted, and it would take care of all the paperwork. All he had to do was sign.
Invitation to a headache?
Many in the solar business think Lortz's case is the exception, not the rule. Too often, they say, homeowners skip solar, even though it is a sound financial choice -- because the process can be a labyrinth.
"The way that solar is sold in the U.S. today is lengthy, complicated, and often a stressful process for an individual homeowner to go through," said Brad Burton, 1BOG's vice president of product and strategy. "There aren't very many sources of information you can turn to with accurate, reliable info."
Information matters in solar, because the arrays are so customized. The house's direction, the type of roof, and the shade from nearby trees are just three variables. The panels themselves vary widely in efficiency and cost. Then there's the paperwork: requesting permits from the city and the utility, and cashing in on state, local and federal incentives.
Now add salesmen to the mix. According to Burton, homeowners sometimes wince at solar because they have to rely on solar contractors for so much of this basic information, a discomforting conflict of interest.
1BOG butts in as the middleman. On the one hand, it wants to play the honest broker of information to solar shoppers. On the other, it tries to make solar more affordable by negotiating bulk rates with installers.
The goal is to expand the California home solar market, which already leads the country but lags its potential. According to Burton, the state's high electricity prices and incentives mean a home solar system pays for itself in six to nine years -- an impossible speed in the country's coal-powered regions.
"If you're looking at a payback that's longer than 10 years, a homeowner who's got any amount of motivation is probably not going to have that conversation with you," he said.
1BOG is working in 17 states, and each has a unique brew of incentives, utility prices and policies that make solar pencil out.
Incentives build a supply chain
California stands out as the country's largest market, with almost two-thirds of the country's solar portfolio. As in the rest of the country, residential solar systems are more common but much smaller, on average, than commercial systems.
Nevertheless, California's stiff renewables target -- 33 percent by 2020 -- means every contribution counts. Thanks to a generous state incentive for solar power, an entire supply chain is sprouting around home solar panels.
Hardware stores such as the Home Depot and Lowe's have increasingly sold solar on retail shelves, along with installation service. Dozens of companies, large and small, offer free home evaluations that end with a quote. A few companies, such as 1BOG, are trying to make the money, and the process, as easy as possible for regular Californians.
All face the same problem: a thicket of details and numbers that keeps Californians from getting home solar even where it's a smart financial move.
For example, one local chapter of the Sierra Club has devoted itself to exposing permit prices for solar in the Bay Area. In a 2008 study, it found seven cities with permit costs above $500 and 20 cities where permitting was free. The chapter's reports have moved some cities to slash or end their fees.
Finance presents another roadblock. A small photovoltaic system costs several tens of thousands of dollars before incentives, a hefty sum even for rich Californians. Yet banks have only dipped their toes in the lending market, as renewable energy is still gaining entry to the real estate world.
Major investments in money, and time
Tania Reuben, a Los Angeles-based writer who runs the website PureNaturalDiva.com, expects to have her family's 17-kilowatt solar array up soon -- but she's spending hours on the phone to make sure she can pay for it.
Financially, the system checks out. It's much larger than the average American solar array of 5 kilowatts; she expects it to supply at least 80 percent of the home's power. With incentives, it would pay for itself in seven years.
But her ambition takes organization. "A good amount of time, I mean, it's been an investment," she said. Since spring, Reuben said, she's been in constant contact with her bank, accountant and installer.
Right now, she's trying to convince the bank to give her more favorable loan terms. Reuben said the bank makes low-interest loans for cars and other home improvements, but solar panels aren't seen as having any collateral.
Moreover, none of her neighbors has a solar array, so she can't prove that solar would raise the value of her home. That raises her interest rate.
Reuben's website is about eco-friendly living. But even her patience is wearing thin.
"If this is how hard I'm feeling it is, and I have that extra reason to be committed, it makes me really concerned that the average consumer is going to run into a couple of roadblocks and then go, 'You know what? This is too complicated,'" she said.
San Francisco-based SunRun wants to snag consumers before they get there. Susan Wise, a company spokeswoman, said customers' top concern isn't money -- it's the trouble: research, permitting, maintenance and so on. "We thought, let's just do all that for the homeowner," she said.
Instead of selling solar systems to customers, SunRun leases them. Customers make a down payment of anywhere from nothing to several thousand dollars, then they pay a monthly fee for the solar electricity. The arrangement is designed to get consumers around the high front-end cost of solar -- and to slash their power bills over the life of the contract.
Wise said it's not just about money: It's about making solar easy for non-engineers. SunRun takes care of the permitting and financing, but the leasing scheme means it also owns the solar panels -- unless they work, it doesn't get paid. So SunRun insures and maintains the panels on its customers' homes. From the company's control room, Wise said, SunRun can sometimes detect a fault even before the homeowner does.
Catching up with Germany
While companies struggle to clear the way for solar in California, the simplest solar market in the world -- Germany's -- is trying to tame a solar boom.
German utilities offer a "feed-in tariff": Homeowners get 31 euro cents -- about 42 cents -- for every kilowatt-hour they generate from renewables. The program has exploded, adding 8,000 megawatts last year; German leaders want to trim the subsidy, since the grid can't continue to absorb that much growth.
Friedo Sielemann, the German Embassy's counselor for environment and energy, said the generous tariff has been the main driver behind solar. But he added that the process is far more accessible to everyday Germans than U.S. programs are to Americans.
The 31-cent subsidy is guaranteed for 20 years, which gives banks certainty and lets them offer cheaper loans. Utilities are required to buy the power, so there's no risk of a stranded solar panel.
Germans can learn about their home's solar potential from the German Energy Agency or solar companies; when they choose an electrician, he does the paperwork for the local utility.
There's one thing left: letting the federal grid agency know, so it can monitor how much solar is in the country. The form is online, and two pages long.
Correction: 1BOG is a for-profit company; an earlier version incorrectly called it a nonprofit.