Here Comes the Sun

By John Greenwald

Solar power was an exotic new technology when John Schaeffer graduated from the University of California, Berkeley, in 1972 and helped start a primitive commune in the woods of northern California. But he was a tinkerer, and in his spare time he managed to rig up a solar-powered television set so he wouldn't have to miss his favorite shows. Soon Schaeffer was selling solar panels to his fellow urban refugees at a time when, he recalls, "only dope growers could afford them." Today Schaeffer's beard has become a white goatee, and his Real Goods Trading Co. has blossomed into a catalog operation that is the country's largest retailer of home solar equipment. The growth of Real Goods -- sales have jumped from $29,000 in 1986 to $10 million this year -- is a small but sharp tremor along the shifting tectonic plates of America's energy landscape.

Until now, solar energy has appealed mostly to affluent homeowners and self- described tree huggers -- the save-the-environment folks. That's because buying and installing solar equipment can cost $15,000 for an average-size home before any current starts to flow. "Even Edison first electrified the homes of his wealthy investors, so the high-end client has always been fertile ground," says Steven Strong, whose firm, Solar Design Associates, based in Harvard, Massachusetts, is among the country's leading designers of solar homes.

To broaden the market, Strong set out to design an all-solar neighborhood of 30 working-class houses and eight commercial buildings in Gardner, Massachusetts, that opened in 1986. Sponsored by New England Electric Systems utility company, the project offers a glimpse of the day when solar-run homes could become as common as split-level houses. Solar power already helps heat and light more than 100,000 U.S. houses. And this week Real Goods is sponsoring a tour of homes from Maine to California that have all their energy needs met by sun, wind or water power.

What's making solar energy so hot? For one thing, the technology is getting better and cheaper. The price of the photovoltaic cells that convert sunlight to electricity has fallen precipitously from $500 a watt in the 1960s to about $4 today. Companies are now rushing to break the $2 barrier, which would reduce the residential cost of solar electricity from 30 cents per kWh to near the 12 cents average price of electricity in California. Leading contestants in the scramble are Texas Instruments and Southern California Edison, which have joined forces to produce flexible solar panels from inexpensive low-grade silicon by 1994. The innovative technology will allow the panels to be integrated into car and building design and, even more important, will crash the price to $2.50 a watt.

As the price of solar technology has plummeted, the political climate has improved. While Jimmy Carter created tax breaks to spur solar development, Ronald Reagan viewed the incentives as government meddling in the energy business and unceremoniously scrapped them. In a symbolic move, Reagan also took down the solar panels Carter had installed on the roof of the White House. (The Clinton Administration is considering whether to put up new ones.) "Reagan took the steam and momentum out of solar and other forms of renewable energy development for a good 10 years," says Strong.

Some of the biggest boosters of solar power are bound to be utility companies, eager for a clean source of electricity that will enable them to produce more power without new billion-dollar plants. Both as consumers of solar technology and as the promoters of home solar panels, utilities will drive much of the industry's growth into the next century. "Utilities are beginning to realize that they're going to have to get on the solar bandwagon," says S. David Freeman, general manager of the Sacramento Municipal Utility District (SMUD). "If they don't and rates go up sharply, people are going to buy their own solar panels and pull the plug on the utilities." His company embraced alternative energy when rate payers voted to close its troubled nuclear facility in 1989.

Last month 68 utilities, from New York City's Consolidated Edison to San Francisco's Pacific Gas & Electric, formed a consortium to purchase $500 million worth of solar panels over the next six years. These utilities, which serve 40% of the country's electric customers, hope solar power can help replace aging plants that will begin phasing out by the end of the decade. Says Scott Sklar, director of the Solar Energy Industries Association, which represents more than 500 U.S. solar-equipment makers: "This will allow the solar industry to double its manufacturing capacity and acquire new capital to ramp up new production." That in turn will reduce manufacturing costs.

No utility is more enthusiastic about letting the sun shine in than SMUD, which is putting solar cells on 100 residential roofs a year as part of a five-year pilot project. Homeowners pay nothing for the installation but see a 15% surcharge on their monthly bills to help defray the cost. Even so, the chance to become a solar citizen has enticed more volunteers than SMUD can accommodate. Encouraged by the response, the utility has ordered 100,000 more solar panels, enough to generate electricity for 2,400 homes, and is purchasing land for a 100-MW solar furnace that would rival the size of standard power plants.

What SMUD is doing parallels what developing countries have been up to for more than a decade. These nations, which cannot afford to build costly nuclear or fossil-fuel plants in rural areas, now buy nearly two-thirds of all solar panels produced in the U.S. "In Mexico there are 28 million people without electricity, and Mexico has the most ambitious solar electrification program in the world," says Sklar. Elsewhere, India and Zimbabwe are using World Bank financing to light up remote areas with solar power; India is installing photovoltaic systems in 38,000 villages, and Zimbabwe is bringing sun power to 2,500 villages.

In the U.S., where there is little government help, the Real Goods catalog has become the bible of America's environmentally aware set. With a circulation of 400,000, the catalog offers everything for the energy-efficient home, including composting toilets, solar radios and wind generators in addition to solar equipment. Hot-selling items include fold-up solar panels the size of a briefcase that can power laptop computers. Technicians at Real Goods headquarters in Ukiah, California, stand ready to handle customers' questions and help plan alternative energy systems over the phone.

But the era of solar power will have to wait for the cost of converting sunlight to fall far enough to pay for the cost of installing a system. "Solar is competitive now if you take the long view," says SMUD general manager Freeman. "And it's going to be highly competitive by the end of the decade." If he's right, the forecast for the industry in the 21st century is bright and sunny.

With reporting by Jonathan Beaty/Ukiah