Ask an Expert: What’s Next for Solar Power?

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Intro

Solar is definitely taking off across the country—but California, which leads the US in residential installations, has some of the most cutting-edge energy options available. Today we sat down with Ruben Ugarte, the Director of Business Development at Horizon Solar Power in Temecula, California, to talk financing options, the future of solar, and just what makes Californians so good at solar. Here’s what he had to say.

solarskin on terra cotta

Let’s start with some basics for homeowners who are thinking about going solar. What’s the first step a homeowner should take when deciding whether to install panels?

The overall first step is collecting your information on your utilities and energy bills. Evaluate what you’re using—as far as kilowatt hours and energy in general—not just now, but down the road, especially with electric vehicles becoming popular, or with children growing up and maybe leaving. You want to take those phases into consideration and really understand your energy bill and how to collect that information.

The second part is being able to reach out to a solar advisor to understand what your energy bills really mean, and becoming educated on what going solar means to you. A lot of people look at it differently, and it’s important that homeowners feel educated and empowered when they’re making a decision.

What, in your experience, is driving people to switch to solar?

One is choice. Historically, people haven’t had a lot of choice when it comes to their energy. As Americans, we love options—we have them for pretty much everything in our lives, after all. But when it comes to energy, which is such an abundant piece of what we need and what we rely on daily, we don’t really have a choice. So I think it’s more people understanding, “Oh wow, I can switch my energy.”

There’s also the fact that homeowners can save money and control what they spend on energy, which is something that historically, they didn’t have.

That’s a really interesting answer! So, backing up for a moment, you mentioned talking to a solar advisor. Is that the first step in the process for Horizon Solar? What exactly does the process look like for most homeowners?

Yes, the majority of our consumers reach out to us, and a lot of them are working through referrals, so they know someone who’s gone solar. Horizon has more than 7,000 residential installs throughout Southern California, so those 7,000 homeowners are telling their friends and family. So that’s one piece.

Basically, the process is that someone calls our company, and we make sure to go through a few questions, as far as what they’re using, and if they own their home or not, etc, all to figure out if they’re a good fit.  Then we can schedule an in-home consultation, or over the phone if they prefer. During that consultation, we analyze their utility usage, roof type, and more, going through the different options to figure out what’s going to be best for them. There are a lot of different options in solar—which is a great thing—but it can also be confusing if you don’t have a professional who knows all the different products and is willing to sit down and educate you.

To answer your question, the main thing is sitting down with a sales advisor, going over your utility usage, and determining what size system is really needed for your home. From there, you just need to choose a financing option that fits your needs and your overall profile.

Financial Budgeting

What sort of financing options do you offer at Horizon?

We’re not a national company and we’re not publicly traded. We’re not the bank. So that gives us the ability to offer a variety of financing options. We have pretty much any option available, from the zero-dollars-down Power Purchasing Agreement, to more traditional solar loans. We also have the very popular Property Assessed Clean Energy—known as PACE—and through this, homeowners can pay solar down through their property taxes. Or you can do it the conventional way of purchasing with cash.

There’s a 30 percent federal tax credit that really drives our industry right now. So depending on the customer’s appetite and how they’ve decided to use that tax incentive, that really determines the financing options.

You mentioned Power Purchasing Agreements as one kind of financing. Can you talk a little bit about those and Horizon’s options for PPAs?

The Power Purchasing Agreement is very similar to the relationship most homeowners have with their existing utilities. You get your power, and you have your meter and your utility lines. We kind of follow that process in the sense that you don’t own your panels, but you’re using your roof, so you’re able to take the power that’s produced and offset your utility bill.

It’s a very similar process, and I think it’s so popular because it’s so simple. It’s an easy way to get rooftop solar and be able to switch your energy—generally with no up-front cost. So I think that’s really been a big factor driving solar forward. Homeowners have this option to go solar with no money out of pocket, and essentially they save somewhere between 15 to upwards of 40 percent on their utility bills. And because there’s no up-front investment, the ROI or savings is immediate.

Calculating number of solar panels

What kind of roof does your average customer have?

There’s not really a “typical” customer. We have some homeowners who have $1,000 in utility bills each month, who could obviously offset or save hundreds of dollars a month. We also have customers who maybe only save a few dollars a month, but they really want to switch their bill and be part of the solar revolution.

When it comes to utility bills, it really varies. And it also varies all over Southern California—from the beaches of Long Beach and Costa Mesa all the way into the heart of Palm Springs and Riverside and San Bernardino County.

But overall, as far as customers go, it’s someone who is interested in taking control and finding out what their options are and the savings it provides. With more than 7,000 installations, we’ve found that the majority of homeowners do best with a south-facing roof. You don’t have to have it, but it does really help. So a good roof space and, obviously, the utility. Being with certain utilities is going to be more advantageous than others.

In California, we have a lot of municipal utilities that are owned by the cities, and for those, energy rates are much lower. They’re chartered to be lower, versus the investor-owned utilities. There are several of those here in the state of California, which have much higher pricing. So it really depends on where they live, what type of roof they have, and how much sunlight they receive. All of that really determines that viability for that homeowner to go solar.

Why do you think California has been so successful in getting residents to convert to solar?

California is an innovative state. We take the lead in technology. Plus, there have been some great programs that have really propelled solar, like the California Solar Initiative, which was introduced when Arnold Schwarzenegger became governor. It was something like a million-rooftop initiative, and that really set precedence.

I think having utilities that are investor-owned that govern the whole state, and high rates that have increased over the last 30 years, have made it a prime opportunity to adopt solar. We also have a lot of sun. People come to California for the beaches, and that sometimes coincides with higher energy bills. But I’m very proud of the state and excited about what’s coming next.

family in front of solar panels in the backyard

Speaking of innovation, what projects or new products are you really excited about right now?

I think what really makes us here at Horizon unique is our in-house design. Our engineering staff are well-versed in complex and complete design in installs, such as carports for small and large businesses. We do ground mounts—both hillside and just ground mounts in general—which a lot of businesses won’t do. We have a lot of experience working with special roof types, like tile, slate, and metal roofing.

Our roots are in building. Our founder was a developer, and that’s what our company came from. I think that’s what makes us unique and different from some of the other larger solar companies who are looking for really cookie-cutter installs. There’s really no install we won’t take on. We have a soup-to-nuts approach, and it’s something that we’re proud of. We’re a custom PV installer, and jobs that other companies shy away from or won’t do, we take on full-head.

Are there any new technologies you’ve heard about that you’re excited about?

Certainly energy storage. It’s here, and energy storage will be more than just solar, it will be solar plus storage. So we’re really excited about that.

Utilities have seen the rise of solar, and they’re trying to protect their customer base, so as they try to change, we do the same. And what’s great about storage is that up until recently, homeowners who had gone solar had been sending that power from their systems to the utilities, and then the credit was reflected on their utility bill.

But with the solar storage now, they’re going to actually be able to store that energy in their home, in their unit, and then use it as they deem fit when utility prices rise. And what’s great about it is that the two systems are going to be able to communicate simultaneously. They’ll be able to tailor to the homeowner’s energy usage, as well as how the utility reacts—so they’ll be able to save that homeowner the most money possible. And that’s powerful. That’s something that’s never happened before. We’ve taken steps to put ourselves in a position to offer that to our customers, current as well as future.

The cost of the lithium has dropped tremendously. And companies like Tesla, along with multiple other firms, have great products, so as the cost comes down and as more PV installers adopt it, it will just become another piece to the offering. And that really makes solar installers so much more than installers, but like an energy concierge, where we’re able to service customers throughout the term of their energy production. We’re able to be there for them down the road as well—when they need to upgrade, or when they need to change anything. So that’s an exciting part of how solar has evolved.

Is there anything else you’d like to add? Anything you’d like to say to homeowners who are interested in solar?

I wish more homeowners knew how easy it was to go solar and choose an alternative option to what they have with their utility—one that could save them money. Maybe people might think that it’s not for them because it’s really only for the rich, but that’s simply not the case.

Over the last five years, we’ve gone from being able to sell systems via cash, cash, and cash, to having so many different financing options through such great companies, including SunRun, Mosaic, and Hero. There are so many good companies that provide really great options for homeowners. My goal is to help homeowners understand this, so that we can get to the point where it’s rare to see a home without a solar panel system.

That sounds like a great goal! Well, Ruben, thank you for talking with us today!

Thank you for having me!