Solar panels become a cash cow for some Texans


Despite Houston’s sweltering heat, Grady Hill hasn’t paid an electric bill since 2009.

He keeps his thermostat set at a comfortable 78 degrees when he’s home, but a combination of solar panels and an energy-efficient home have helped him make more power than he uses for most of the year.

That excess power goes to his electric company, Green Mountain Energy, which gives him credits that he taps during the summer months, when he tends to use more than he generates. He earns credits at the same rate he pays, 12.915 cents per kilowatt hour, for the first 500 kwh he generates. Green Mountain buys the rest for half that rate.

At the end of June, when his 3,200-square-foot home used 522 kwh, he had a credit balance of $288.82.

Yes, he wanted to be green, he says, but the savings are the real incentive.

Businesses see opportunities in such green and thrifty consumer sentiment.

Hundreds of customers have signed up for the energy buyback program since Green Mountain introduced it 2009, said company product manager Jason Sears.

Retail providers including Green Mountain and Reliant, both owned by New Jersey-based NRG Energy, also have introduced leasing plans to reduce the cost barriers customers confront if they buy solar panels. Sears declined to say how many Green Mountain customers are participating in the program.


Grady’s house is part of Discovery at Spring Trails, Houston’s first master-planned community participating in General Electric’s “ecomagination” home-builder program, which involves designing homes to lower carbon dioxide emissions and equipping them with GE products and appliances.

Discovery at Spring Trails has 264 developed lots and just under 900 acres to be developed, said Michael Casey, general manager of Land Tejas Spring Trails Ltd., the partnership developing the community.

Homes in the project initially came with solar panels on the roof or a detached trellis designed to provide both shade and solar power.

Those became optional after some potential homebuyers said they didn’t want the solar equipment, Casey said.

The partnership filed for bankruptcy earlier this year but said the bankruptcy is unrelated to its focus on green building. Casey said the partnership took the action because its lender, Amegy, moved to sell the loan to investors who wanted to take over the project.

“We filed because we needed to protect ourselves,” he said, declining to disclose the amount of the loan. Amegy declined to comment.

The developer is subject to two liens — for debts of $31 million to Forestar USA Real Estate Group and $8 million to FFS Investments — according to court documents the partnership recently filed.

July 2009: Bill was $40

When Hill and his wife bought their house for $300,000, it had double-pane windows, three feet of insulation in the attic and energy-efficient appliances. The Hills added a tankless water heater, ceiling fans, solar panels and a few other items for $60,000.

The five-kilowatt solar system cost about $22,000 after federal tax rebates, and the Hills also saved because the home was pre-wired for a solar system.

The couple moved in during the summer of 2009. The electric bill that July? $40.

But because of the high up-front costs, the solar industry has struggled to break into the local homeowner market even though many residents spend hundreds of dollars a month keeping homes cool in the scorching summer.

Craig Lobel, president of EcoEdge Consulting, an energy efficiency firm working with Discovery at Spring Trails, said it only makes financial sense to add solar after making less expensive investments. These include efficient appliances and light bulbs and radiant barriers to keep heat out of the attic.

New homes in Discovery at Spring Trails come equipped with those energy-efficient features and an electronic monitor that shows residents how much energy they consume and how much they generate if their houses are solar-equipped.

“You have to build the home efficient from the ground up,” Lobel said. “You can’t just put a Band-Aid on an inefficient home. After ?homeowners monitor their energy use for several months, many choose to add more solar panels to work toward being grid neutral,” Lobel said.

Grid-neutral homes will become more common as building codes require more efficiency and homeowners start to think of utility bills as long-term capital investments rather than expenses, said Joel Greenberg, an Austin-based energy auditor.

“A lot of efficiency pays back within five years. Solar can pay back within five or 15,” he said. “And if you make your home efficient first, you spend less on the solar.”

Ahead of the game

Aside from the costs, homeowners have also faced resistance from homeowner associations that say the panels are unsightly, hurt property values or violate deed restrictions. State legislation passed this year prevents homeowner associations from prohibiting the installation of solar panels.

The law is expected to bring the state more competition from industry players.

That means Grady Hill is ahead of the game.

“Electricity is not going to get any cheaper, and one of these days I’m going to be on fixed income,” said Hill, who is the director of a municipal utility district in Montgomery County. “My wife and I are going to be grateful we’re not paying a large electricity bill of $350 to $550 a month because that’s how much it would cost without these panels and other efficiencies.”

Purva Patel

27 Responses

  1. Dan says:

    The report does over-simplify the economics of PV, but the financial benefit to the homeowner are obvious.

    The German houses mentioned above, actually refer to the PassivHaus principle. It’s not so much “100% energy efficient” but sets strict limits on primary and secondary heat loads, and an overall heat consumption of 125kWh per year. It doesn’t deal with electrical demands at all.

    Not that it is likely to happen in the oil state, but here in the UK (as in Germany before us) owners of PV systems get paid over 3 times the rate we pay for power, for every unit their PV generates.

    That has increased uptake and is guaranteed for 25years and has created a market for suppliers to install PV at no cost to the homeowner, who in turn benefits from reduced electricity bills as their home gets the PV output, with excess exported to the national grid.

  2. Texas Engineer says:

    Funny that the article did NOT mention the total cost to add the solar panels & associated wiring, nor the expected lifetime of the panels. It’s a stupid idea!

    Many years ago my neighbor had a passive solar water heating system installed. The normal house water pressure pumps the cold water up to the panels, the sun heats it, then when there’s a demand for hot water it flows into her 60 gallon hot water heater which almost never comes on because the water entering the tank is well over 150 degrees….total cost when installed (1983) including beefing up the roof to handle the extra weight: $4500….she’s made that back many times over in savings with no appreciable extra expenses. Works well all year round, even works on cloudy days (although not as well).

  3. ST says:

    What most people here fail to understand is that if you have a 30-year mortgage, and your system has a payback period of even 25 years, you save $ on day 1. A 25 year payback means 30 years of power from solar panels are CHEAPER than 30 years of electricity bills to the utility. Of course, no one owns their home for 30 years, and that’s why rolling solar panels into your 30-year mortgage makes sense. If you sell the house in 10 years, you get 1/3 the savings and pay for 1/3 the cost of the solar panels (generally speaking) and the remaining costs and savings are passed on to the next owner. It also avoids the reality that most people can not (and should not) put a ton of cash into an investment with a 15-25 year payback. With mortgage financing, solar pv is often more cost-effective than shelling out for utility bills every month.

  4. Tex1 says:

    I can’t understand why anyone would move to Discovery at Spring Trails, but opted out on using the energy-producing solar panels. Are these people slaves to the energy companies?

    Homeowner Associations think it doesn’t look good? Who gives a crap about how a roof equipped with solar panels look like when you can save thousands of dollars every year on electric bills! These people are morons!

    Imagine how much money we all would save if all homes are equipped with solar panels! We would add thousands of dollar to our pockets every year, and with the money we could use it to buy so many more goods and services, which in turn would boost the economy of our country and everybody would be living in a happier, more comfortable world!

    And equally important is the fact that we would break the chains of the greedy energy companies that are always trying to increase the rates every year and keep them from destroying the environment so that we could enjoy our planet instead of destroying it!

  5. saved says:

    I really like to hear about ways to save on energy, but this sounds like he is still very much in the hole and my guess is that he will never get out because of upkeep. Perhaps in the future these systems will become more economical and practical.

  6. bubbabobcat says:

    Indianpaintbrush, the article states that the state leglislature passed a law that prohibited HOA’s from banning solar panels.

    A lot of negativity on doing something positive. Sadly not surprising.

  7. Whatever says:

    I meant 25 years to break even for the $60K investment.

  8. Whatever says:

    $60K spent to make home energy efficient?

    $60K / $200 monthly electric bill (average I pay) = 300 months which equals 25 years.

    25 years to pay off $60K if I paid cash for this.

    BUT—my electric bill last month was $324. I am on track to pay the same or more this month. May still be worth doing on my next house if we build from the ground up.

  9. Art Vandeley says:

    After spending $82,000 to retrofit my home for solar power……… I’d break even in 23 years with my current avg. elec. usage. Hmmm something to think about LOL. Wonder how solar power would handle my new $43,000 electric car…. (the sarcasm runs deep with this one)

  10. Jackalope says:

    “Houston’s first master-planned community participating in General Electric’s “ecomagination” home-builder program” GE took taxpayer money and moved its solar operations to China. The CEO of GE has boasted that 80% of its capital has been offshored and will never return to the US. That’s why GE paid zero federal income tax last year. The CEO of GE was then rewarded with the title of “Jobs Czar” by Obama after moving 30,000 jobs overseas. Add to it this couple used $38,000 in other people’s money to go solar. PLus, at 12.5 cents/kwy, they’re getting robbed by Green Mountain Energy.

  11. Peter says:

    My belief is that it wouldn’t take much for the legislator to make rules against solar panels invalid in HOA covenants.

  12. A guy says:

    $60,000 to enhance an already energy efficient home to self sufficiency? Assuming no repair or replacements (a stupid assumption if there ever was one), that would be a 15-20 year payback on my electric bill. Once you factor in maintenance, I’m not even certain if there would BE a breakeven point. That’s not even counting the rebates they got from the government coming out of our pockets.

    Trying to present this as economical is simply stupid.

  13. The article doesn’t explain just how much the taxpayer-funded subsidies were for the solar panels. While PV systems probably result in net environmental benefits, it is a real question whether the benefits are being achieved in a cost effective manner through such subsidies.

    And even with subsidies it looks like the payback period is 10-15 years, maybe longer.

    An interesting experiment, but not yet ready for everyone.

  14. Indianpaintbrush says:

    I read about some new solar panels made from paper the other day which would be much less expensive to use. All fine and dandy, but if your HOA doesn’t allow them , what’s the point?

  15. Peter says:

    Mark, if you decide to do panels, check out the link I posted earlier. It will litterally cut your panel cost at least in half. Sure there will be work involved; however, you’ll have a better understanding of the panels, be ablet to fix/maintain them better yourself and allow you to invest the savings in better batteries, controllers, etc.
    Additionally, make sure you research it well. Many people don’t understand that if you have a decent sized system, you’ll need a battery room that needs to be cooled (in Houston). Make sure you buy the right invertor and controller so that as you add panels, you don’t have to resize these expensive components.
    I might be extremely pecsimistic on solar power, but that’s because I’ve learned about it due to my enthusiasm. I dream that panel efficiency (which is the largest problem) improves and drops in price. Trust me, if I could find a way to install a 10-kilowatt system for $10,000, I’d be all over it. It’s not that I’m against solar power, it’s just that I’ve done my research and found that at the moment it’s a poor investment if you don’t have the disposable income to put into it. I’m buying a lottery ticket today, and if I win, I’ll commit to the largest solar power system my house can handle.

  16. Mark says:

    Man puts his money where his mouth is, which is seen as so exceptional in our society that it makes the news. Yes, you can get a better return elsewhere, duh. Yes, this is not for everyone, ok. But he lives his ideals, good for him. My next task today is to google ‘discovery at spring trails’, I’d like some panels on my next house, partly to offset my electric bills, partly to be more self-reliant and take personal responsibility for my energy consumption. Til then, I’ll keep the ac set at 80 while I’m at work, and the bills under $100.

  17. ntangle says:

    Depending upon efficiency a 5 ton unit is going to need between 5.5-kilowatts and 10-kilowatts.
    Given their penchant for eff., it’s a good bet that their a/c is at least 13 SEER. Even at that eff., the power demand is “only” 4.6 kW.

    1 Ton = 12,000 BTU/h
    5.0 T = 60,000 BTU/h
    Power = (BTU/h) / (SEER)
    60,000 / 13 = 4615 W = 4.6 kW

  18. Sugie186 says:

    I’m with Peter! The cost is just frontloaded and extended with maintenance. I’m thankful that people like the Hill’s are paving the way for the rest of us though. I will hold off though. It’s not cost effective just yet and those tax breaks and government incentives are not something you can depend on; nor should you! Buy your own dang system. I’d rather the money be invested in research. Or possibly it already has…. I wonder what Nasa could introduce to the market.

  19. Bryan says:

    I work for one of th big energy providers, so I do these cost break downs all the time. In 08′ when prices for the house were higher in the 13 cent range, my solar panel would have cost approx $20K to install and get up and going. They last about 20 yrs, and the pay back was about 20yrs, so it was a break even. Now that electricity has dropped to the 8 cent range the pay back is even longer. My house is 1600 sq ‘ built in 55’. The pay back on the panales if I sold the house would not of helped either. In short, you can take the $20K and get a better return somwehere else like a remodel in a bath or kitchen. New home pre-wired would be a little different but it’s so new, that technology will change and in 5 -10 yrs your stuff could very well be out dated. It’s still too new and the cost are still too high.

  20. Patrick says:

    These people got a $38,000 subsidy from the federal government. The program is a scandal, a waste of taxpayer dollars, and a fraud. Just another good reason to take a chain saw to the federal budget. This is not economy, this is not a “green investment”, this is a scam.

  21. Peter says:

    This is very important, he paid $22,000 AFTER tax rebates for a 5-kilowatt solar system. Depending upon efficiency a 5 ton unit is going to need between 5.5-kilowatts and 10-kilowatts. At 3,200 sq ft, 5 tons is going to be just about as low as you can go.
    Now, for those of you without a super-efficient house like him (which he had to pay a lot of extra cash for), how much would you need to spend on solar panels to do the same?
    When I took a look at what it would cost for my house (doing it on the cheap with home-made panels), the price came in at around $45,000. My electric bill averages about $250 per month or $3,000 per year. It would take me 15 years if I didn’t have to spend another dime. The problem is that you have to replace your batter bank – not cheap at all – about every 3 to 5 years, depending upon the batteries. Realistically, I’d be probably around 21 years on my payback, assuming I had the money to pay for it in cash and not taking out a loan and paying interest.
    Well, even 21 years might not sound too bad for some people; however, technology prgresses. What happens if in 8 years, they have an efficiency breakthrough dropping the price per kw of power in half? How about battery tecnology improving? They keep promising them. I know I don’t want to pay $45,000 for a system that might cost $25,000 in 8 years, especially since I’d have to finance mine.
    Oh, and for those scoffing at building your own panels for cheap, check this out –

  22. Steve says:

    If you add the $60,000 they spent into a 30-year mortgage at 5%, it cost them an additional $322 a month. The math only works if you plan to keep the house forever, there is little maintenance costs, or the next owner is willing to pay for the improvements

  23. adam says:

    It takes a lot of $200 electric bills to get to $60,000, excluding the costs of the more efficient house. By my calcs, it would take 25 years to break even. Not to mention that on average, $60,000 in the stockmarket would turn into $720,000 after 25 years. It’s a good idea if you have more money than you need, but don’t let anyone tell you it’s good for your bottom line.

  24. babydolly says:

    Wow! $22,000 AFTER tax rebates? Who has that kind of money laying around? Hope the price of the solar panels come down some day, so more can afford them.

  25. T.C. says:

    Just wondering, those who oppose unsightly solar panels. Visual aesthetics opposing energy conservation.. What’s their mindset. They probably oppose display of American flag deemed too large or kids who are selling lemonade in the neighborhood. Inflexible attitude and outdated..

  26. AvailableUserName says:

    “Yes, he wanted to be green, he says, but the savings are the real incentive.”

    He’s not saving anything, he simply moved his monthly bills up front. He’s actually paying more per kwh than he would without the solar.

  27. Pablo Valqui says:

    In Germany they are building houses that are 100% energy sufficient, though they are very small and have no windows towards afternoon sun to reduce heat inside the house in summer.
    This is only to show what is possible.
    One of Germany’s biggest solar panel producers is Shell (one of the biggest fossil energy producers), in the story lines above its GE (builder of turbines for nuclear plants for example) providing energy efficient utilities. This should be telling of how big companies have already understood in which direction the energy market is going. However HOA, MUDs and some citizens seem not to understand that if they think that solar panels are unsightly in a few more years houses without measures of energy efficiency will be UNSELLABLE.