Homeowners join forces to save on solar panels

Green energy can save you money over time, but solar panels and other options often require a huge upfront investment. You might choose to convert just to boost your green credentials. That can have its own value. But how long until that initial cost begins to translate to real savings – to that other kind of green?

This tricky equation scared Ed Lortz away at first. The retired maritime engineer investigated putting solar panels on his San Francisco house for months before eventually giving up. The cost was too high. And among the six contractors that he compared in 2008, none seemed to offer the very latest technology.

"I liked the idea of solar," says Mr. Lortz. "I was thinking about the future, thinking about where electric rates are going. It was another area where I could reduce my utility cost and be green." But until this summer, those two goals simply wouldn't merge.

The breakthrough came in June, when Lortz attended a seminar for One Block Off the Grid. To help average people ease into a greener future, this San Francisco start-up brings together groups of homeowners interested in solar panels. Once 1BOG hits a critical mass within a certain city, it negotiates a discounted bulk rate with contractors.

"We want people to know that there are pockets of the United States where solar isn't just for rich environmentalists," says Dave Llorens, chief executive officer and founder of 1BOG. "We want to create a rocket booster for communities" that can help people pool together and satisfy their conscience while also saving money.

So far, 1BOG has overseen 1,000 installations in eight states, and 40,000 people have signed up for information on the group's website, 1bog.org.

The arrangement allows everyone within a community to get a better deal on the systems – usually 15 to 20 percent off – and the peace of mind that comes with a team of solar experts scrutinizing local options.

"There are these giant trust issues with home contracting," says Mr. Llorens. Because it's still an emerging technology, "solar can be much more complex and confusing than other home improvements."

For one thing, it's hard to pin down what's an appropriate price. Costs vary dramatically from area to area, driven by utility rates, regional penetration, and state rebates.

This makes some cities, such as Seattle, a tough sell, says Llorens. The problem is not that Seattle endures gray skies for more than half of the year. Solar panels can soak up sunlight even when the sky is overcast. Germany produces about seven times more megawatts of solar electricity than the US, despite being notoriously cloudy and considerably smaller.

Instead, energy economics gets in the way. Seattle enjoys cheap power, in part because of hydroelectricity, another clean option. Expensive solar panels don't make much sense for the average homeowner when utility bills remain so low.

On the other hand, Llorens says, solar installations are good investments in New Jersey, California, and other states with relatively expensive energy costs – especially when you factor in government incentives.

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