Builders find solar-powered homes attractive

Congress handed a present to the American green energy industry as global financial markets plunged down. It renewed tax credits for wind and solar power, tidal energy, geothermal and more. This didn’t move up eco-energy stocks but it sent a positive nudge to homebuilding, the economy’s most damaged industry. Or specifically, solar-powered homes.

Consumers recognize that green homes "save money month in, month out," says Rick Andreen, president of Shea Homes Active Lifestyles Communities in Scottsdale, Ariz.

Congress planned big projects such as wind farms. But interested buyers of green homes can benefit too. The revised 30% one-time investment credit for solar means that a buyer who installs a typical $25,000 solar panel system on his room will get a $7,500 income tax credits.

The length of taking this investment off will depend on local rules and utility rates.

Interest in sun-powered dwellings

In markets with the most costly power, such as California, Connecticut, and New Jersey, the pretax compound rate of return on a typical home solar system will be better than 15% per year, says Andy Black, chief executive of OnGrid Solar, an industry research firm.

Fresh credits may mark a turning point for solar-powered homes. When mortgages and energy were both cheap, green power was not a hot option. Most typical home buyers preferred granite countertops to solar panels.

Before the sub prime crash, builders already began to see interest in sun-powered residences.

There are about 40,000 solar homes in the US today but that number is set to increase. Shea is adding solar to communities planned for Arizona, California, Florida, and Washington State. And, responding to a shift in buyers' attitudes, big builders such as Centex, Lennar, Pulte Homes, and Woodside Homes are following suit.

The appeal of solar homes could grow as the economic outlook worsens. The more utility bills cut into household reserves, "the more consumers recognize the value of efficiency," says Robert W. Hammon, principal of ConSol, a green building consulting firm. And there's growing consumer awareness that solar homes appreciate faster than ordinary dwellings. They also resell for a premium of up to 5%.