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Solar Making A Splash In San Diego’s Energy Market

Evening Edition

Above: The sun shines brightly on San Diego's solar power industry. Environment California recently recognized the city as the state's top solar city and the amount of electricity created by solar installations will grow dramatically in coming months. However, KPBS Business and Environment Reporter Erik Anderson says there are some clouds on the horizon.

Aired 6/22/12 on KPBS News.

The sun shines brightly on San Diego's solar power industry. However, there are some clouds on the horizon.

— Stand on top of the new Southwest Marine Fisheries Service building in La Jolla in the afternoon, and it's easy to see why the sun will be generating power for the structure. The roof is bathed in sunlight. This environmentally friendly building will have a roof covered with photovoltaic panels.

Sullivan Solar Power Construction foreman, Cesar Chaidez
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Above: Sullivan Solar Power Construction foreman, Cesar Chaidez

Construction foreman Cesar Chaidez kneels near a rail that runs the length of on roof. This rail will help support more than 800 solar panels.

"We ground them here," said Chaidez. "All the modules to the spars. And from here they go ahead and carry them over and set them in place."

The panels will lie flat on the white roof and generate enough power to keep the lights on in 150 homes. That's a pretty typical commercial installation.

"As we build it out, from that side over, the entire roof area is going to be covered," said Dan Sullivan, president of Sullivan Solar Power. "There will be space around it so the system can be serviced, but for the most part, that's completely covered."

Solar Making A Splash In San Diego's Energy Market
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The San Diego company got into the solar installation business about eight years ago and has grown pretty rapidly since then. Sullivan's firm does six to eight installations a week. They range from small residential projects to larger commercial scale efforts, like the one in La La Jolla.

"In the beginning prices were between $8 and $10 per watt installed," said Sullivan. "Now prices are between $4 and $6 per watt. So there's been a pretty substantial decline in costs."

A homeowner looking to zero out a $160 a month electric bill, would install roughly 460 square feet of panels. Sullivan Solar puts the cost after incentives and tax credits at about $19,000. But not all homeowners pay that up front cost.

"Seventy-five percent of all new systems sold in the state of California are not owned by the customer, the guy paying the electric bill. It's owned by a 3rd party financier. And then they make monthly payments that are less than the avoided costs of the electricity," said Sullivan.

The Center For Sustainable Energy in California says the solar marketplace has changed dramatically and that change has happened quickly.

Solar Making A Splash In San Diego's Energy Market
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"Five years ago, many of the people who were going solar were doing so because it was the right thing to do," said Peter Hamilton, managing director of the Center for Sustainable Energy. "They wanted to go green. They were looking at very hefty capital investments -- $50,000, $60,000, $70,000 with limited financing options."

The high cost kept the potential solar market small. Then prices started falling and the cost of electricity went up.

"You have now some customers who may not even care about going green, may not care about having panels on their house or not, they're doing it just for the economic benefit," said Hamilton.

But issues remain. California regulators restrict the number of people who can sell their solar generated power back to the utility, home ownership rates are below average in San Diego, limiting who can install a solar system, and what pencils out economically today, may not tomorrow.

Even so, there are some major solar farms poised to come online soon.

"The first central station will be larger than all the rooftops we've done in the past ten years," said Jim Avery, San Diego Gas & Electric's vice president of power supply. "And we'll be adding one of those every several months."

Solar arrays could generate close to 10 percent of the region's power in a few years, if current trends continue. Right now the sun is responsible for about 2 percent of the region's power.

Video by Katie Euphrat. Sullivan Solar is a funder of KPBS

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