With the whopping amount of solar PV adorning rooftops since the 2021 Snowpocalypse, our business members tell us they’ve never been so busy. It’s clear: homeowners are keen on having solar on their roofs and taking advantage of the value that the system adds to their home while they live in it and when they sell it.
Carrie York, Austin real estate broker, is one of those recent solar rooftop homeowners. “After the Snowpocalypse, I decided to go solar,” she said. “I’d wanted to lessen my carbon footprint for some time but losing confidence in our grid was the catalyst.”
Credit: Carrie York
A recent Federal Energy Regulatory Commission (FERC) assessment states that the Texas grid remains almost as vulnerable to extreme winter weather as it was back in February 2021, despite the Texas Public Utility Commission’s assertion that the grid is more reliable than ever.
Although York has been a realtor in Austin for more than three decades, she’s closed only a handful of solar homes. Despite a GREEN designation for REALTORS® which offers a high-performing homes certification, York thinks that few agents really understand the value of rooftop systems, although that might be changing with consumer behavior, much like York.
Mathew Venneman, former mortgage advisor and now with Freedom Solar, concurs with York.
“After speaking with realtors, I found that many of them lacked general knowledge of how solar works or had little to no understanding of what solar can do for their clients and communities. I’m here to change that,” Venneman said. Incidentally, Freedom Solar installed a 100kW rooftop solar system at the Austin Board of Realtor’s headquarters in 2014.
On-line real estate marketplace Zillow gives solar thumbs-up for comfort, livability and utility savings. In 2019, Zillow researchers found that solar homes sold for 4.1% more on average than comparable homes without solar.
“It all depends on how it’s presented to clients,” says Venneman. “Take two homes, one without solar valued at $500K and the other with solar valued at $520K. While the mortgage on the $520K home will be more, perhaps $75-$95/month more, that cost will easily be recovered from the utility savings,” he said. “And that value is exponential…it’s going to increase as utility rates increase. Win-win-win-win.”
Texas law allows property value to go up when homeowners add wind or solar systems but doesn’t increase property taxes. “Property value added from PV systems is 100% tax-exempt,” says Venneman.
Valuing a rooftop system depends on whether the panels are leased, financed or bought outright.
According to Fannie Mae, solar panels can only be included in the home’s appraised value if they’re owned outright or financed as a home fixture so that they can’t be repossessed if the loan defaults. Being able to include panels in an appraisal and sell them as part of the property simplifies the lending process for potential buyers. Owners of solar systems are also eligible for the 30% federal tax credit.
But not everyone can afford the upfront cost of the system which can run into the tens of thousands depending on size and storage capabilities.
Systems can be financed. In fact, the 30% federal tax credit extends to financed panels as well. Typically, most mortgage lenders require the system to be paid off and transferred to the new owner upon closing to prevent the property from being devalued should the panels be repossessed by a third-party lender.
“I went with company financing and got the 30% federal tax credit,” said York. “In my opinion, lenders aren’t up to speed in this area, and they tend to go with what the appraiser says. Clearly it’s a process that needs work so the home and system realize the proper value. Now that I’m a solar homeowner, I’ll be educating buyers and lenders about the process.”
Finally, homeowners can have a solar lease or PPA (power purchase agreement) and while the easiest way to go solar, it’s the most complicated option for the seller.
In a solar lease or PPA, the homeowner buys power from a solar company, rather than buying the solar system itself. In this case, lenders take the position that because the panels are owned by a third party, appraisers are unlikely to attribute value to them.
With a standard lease, a solar provider charges fixed monthly payments (or sometimes escalating payments over the life of the lease), regardless of the amount of power you receive from the panels. By contrast, a power purchase agreement bills you a fixed rate per kWh of power produced by the panels.
Some companies will guarantee a certain amount of energy production from your panels and will refund you the difference if the system produces less. The leasing company is also responsible for the maintenance of the panels.
“I always tell homeowners that if it sounds too good to be true, then most likely it is too good to be true,” said Venneman. “If a solar company is offering 20-year leasing terms and has been in business for less than five years, it’s probably best to go a different route.”
With his mortgage background, Venneman offers a free solar 101 training for realtors and mortgage bankers. “No other asset…not a pool, kitchen or bathroom upgrade will give your home the kind of monthly dividend that a solar roof will give you,” said Venneman. “We’re changing the way Texans get their power!”
On a recent Saturday afternoon, I took a drive to Whispering Valley to see for myself what a 2,000-acre planned community of sustainable design and innovation looks like. Located east of SH-130 Tollway on FM 973, Whispering Valley is seven minutes from Tesla’s Gigafactory, 12 minutes from Austin Bergstrom Airport and 25 minutes from downtown Austin. Once built out, Whisper Valley will include 5,000 single-family and 2,500 multi-family homes, retail space, restaurants, office parks, entertainment venues, two schools and a 600-acre park.
Whisper Valley is developed by Taurus Investment Holdings and Shell New Energies through its EcoSmart Solution, a green energy services provider that designs and delivers geothermal and other distributed energy resources infrastructures. According to its website: We seek to enable developers and builders of large-scale new construction neighborhoods to create energy-efficient communities and homes and provide new homeowners with affordable, comfortable, and sustainable living.
Currently, Whisper Valley is the largest sustainable development in the US to use geothermal power for all its residences and commercial buildings. In addition to the geothermal network, Whisper Valley homes and commercial buildings feature rooftop solar, EnergyStar rated appliances, smart home technology like NEST thermostats and Sense energy monitoring, smart materials use, equity, community and resilience. In addition, all homes are pre-wired for Level 2 electric vehicle charging. Thanks to the Inflation Reduction Act of 2022, homeowners can take advantage of the 30% federal tax credit for their rooftop solar systems through 2032.
It’s won a slew of awards for its innovation in sustainable design and development from the Home Builders Association of Greater Austin, the Austin Green Awards, and the Austin Business Journal.
What’s it like to live at Whisper Valley? I caught up with two of its current residents who have been living in the community for the past year.
“We love it here,” said structural design engineer, Eric Feuge. “We’re leasing for a couple of years until Phase 6 in Village 1 is complete. Then we’ll buy.”
Feuge and husband Ben Miller have been wowed by the energy efficient features in the 1,900 square foot home.
“What’s so astonishing to us is our utility bills,” said Feuge. “Before living here, we lived in a 600 square-foot apartment in Austin and our utility bills here are exactly the same as that apartment! That says volumes about the kind of energy efficiency benefits at this home compared to what we didn’t have at the apartment.”
As a structural engineer, Fegue understands the philosophy of building fast versus building right. “There are always construction issues in large, planned communities,” he said. “It’s important to do it right the first time.”
What’s surprised Fegue and Miller the most about living at Whisper Valley is how quiet it is outdoors. “Since there aren’t any outside HVAC units cycling off and on, it’s amazingly quiet in the neighborhood,” he said. “We have exactly what we’re looking for.”
Solar and wind energy saved Texans nearly $1 billion a month this year in electricity costs, according to a recent clean energy study from energy system analysis group IdeaSmiths LLC.
In the first eight months of 2022, renewables saved the Electric Reliability Council of Texas, which operates the grid, about $7.4 billion, the report shows, or about $925 million per month. Renewables are on track to save Texans $11 billion total this year.
“With a coal or natural gas power plant, you have to both build a power plant and continuously buy fuel to burn in that power plant, and so there’s higher ongoing costs,” said University of Texas Austin research scientist and IdeaSmiths executive Joshua Rhodes, who led the research. “Wind and solar generally produce very cheap electricity because they don’t have fuel costs … after you’ve built the plant there are no fuel costs associated with generating electricity.”
The report quantifies the economic benefit of renewables in terms of electricity cost, water usage and pollution. The report doesn’t address the impact of renewables on grid reliability.
What does it take to keep a preeminent, 40-year-old solar nonprofit thriving during a pandemic, extreme weather conditions and intransigent decision makers? For the past three years, Patrice ‘Pete’ Parsons has been at the helm of TXSES, carrying out the organization’s mission to educate and inspire every Texan to adopt solar energy as part of an equitable 100% clean energy future. Keeping the organization growing requires exemplary leadership and vision.
“My professional career in clean energy has prepared me for this assignment,” said Parsons. “Technologies have advanced. Consumer awareness has never been higher; demand has never been stronger. Climate change is no longer a speculation. My work at TXSES feels more urgent than ever.”
We sat down with Pete for an in-depth conversation about where TXSES has been and where it’s going.
TXSES: It’s been three years since you took over at TXSES. Where has the time gone? Your career has included work in the public, private and NGO sectors. Did that prepare you for a 40-year-old statewide solar nonprofit with regional chapters in five major metropolitan Texas cities?
PP: I’ve had a rewarding, inspiring professional career in clean energy which started back when Ann Richards was governor. I was at the General Services Commission (GSC) at the time and tasked with implementing her executive order directing all state agencies to recycle and buy recycled paper. I also worked on re-writing the Architectural and Engineering (A&E) Guidelines for state construction which included recycled building materials. I was fortunate to work on the state’s very first wind project in the Davis Mountains that would provide power to all state buildings in Austin.
After GSC, I took over the Governor’s Energy Office which I renamed to SECO, the current State Energy Conservation Office. I was focused on exploring how renewables could make an economic and environmental impact on the state. From there, I worked for the General Land Office (GLO) and Land Commissioner Garry Mauro which included representing him on President Clinton’s National Alternative Fuels Task Force and the EPA Clean Air Advisory Committee. It was a ton of fun!
TXSES: Feels like we’re only halfway to present day!
PP: After the GLO, I worked for HARC (Houston Advanced Research Center) where I started a Fuel Cell Research Center. I assembled a team of privately held companies to fund research on PEM (proton exchange membrane) fuel cells for stationary applications. From HARC, I went to ICLEI Local Governments for Sustainability as its South-Central Director to help 50 cities implement climate action, sustainability and resiliency plans. It was exciting but exhausting! That’s when Ann Hamilton, formerly with the Houston Endowment and current TXSES board member, told me about the ED opportunity with TXSES. In addition to my interest in seeing how I can make a difference in the solar arena, returning to Austin felt like the right move so I could be closer to my mom, my children and my grandchildren. So to answer the question: did my previous work prepare me for TXSES? Absolutely. So much has happened over the past 30 years. Technologies have advanced. Consumer awareness has never been higher; demand has never been stronger. Climate change is no longer a speculation. My work at TXSES feels more urgent than ever. We have no time to waste.
Pete Parsons at HARC meeting, ca 2000
TXSES: So tell us what TXSES is focusing on these days.
PP: With all that’s happening in the clean energy space, it’s easy to get overwhelmed. To respond to consumer demand for solar, we see strategic distributed solar opportunities for a more resilient grid with rooftop and community solar. There’s no drop in consumer demand; in fact, our installers tell us they need workers! In response, we jumped in to help. For the past 18 months, we’ve been focused on building an educated, quality-trained diverse solar workforce for low-income populations; we’re pleased with our progress.
TXSES: Who else is TXSES targeting with education and training?
PP: Thanks to marketing support from the Texas Electric Cooperative, we’ll be holding training for Texas rural electric coops with experts from industry, national labs, and consultants who will share their experience and knowledge about technical opportunities and challenges, funding, state and national examples of community solar, residential and commercial solar programs, how to value solar. We hosted two of these workshops for New Braunfels Utility (NBU) earlier this year which were wildly received. According to NBU, these workshops provided a wealth of information that increased its understanding of and confidence in implementing initiatives that are new to many coops.
TXSES: TXSES was involved in last year’s effort to educate homeowners in the Pedernales Electric Cooperative (PEC) service territory. How did that go?
PP: There’s good news and not-so-good news. Working with other stakeholders, we focused on organizational change at the PEC to diversify its leadership and promote clean energy programs. Our efforts included leadership diversity, a vigorous public awareness campaign for solar in PEC’s service territory and a value of solar study to quantify the costs and benefits of each solar owner’s array to PEC’s system.
We hosted several town halls to educate PEC homeowners about proposed changes to PEC’s rates for solar generation. Despite our efforts, PEC prevailed its bid to implement anti-solar policies that affect current solar homeowners and potential solar homeowners. As the largest rural electric coop in Texas AND the US, PEC’s actions are especially concerning. That said, we’re not deterred. In fact, it only fires us up to ramp up our consumer awareness efforts so PEC homeowners have fact-based information to make decisions that will impact their lives and ours as well.
TXSES: The recent passage of the Inflation Reduction Act (IRA) has substantial funding opportunities for states. In fact, we’ve not seen such a tranche of federal money for energy initiatives since ARRA (American Recovery & Reinvestment Act). What are your thoughts about this?
TXSES: It is the most significant climate legislation in US history. Modeling finds IRA’s $370B in climate and clean energy could help cut US greenhouse gas (GHG) emissions up to 43% BELOW 2005 levels by 2030…just seven years away! Reports of job growth exceed one million new jobs, affirming our work to educate and train a quality, diverse solar workforce. To capitalize on those federal dollars, Texas must pass bold clean energy targets. But with actions like appointees to the quasi-secretive State Energy Advisory Plan Committee by the governor, lieutenant governor and speaker, opportunities to realize those bold clean energy targets will be a challenge.
But the opportunities are huge. The State Energy Conservation Office (SECO) will have its hands full administering those dollars. While fossil fuels do benefit from this bill, clean energy resources like solar, wind and efficiency are the real beneficiaries of IRA. One of the really big wins: the 30% federal tax credit for rooftop solar installations now has a 10-year extension! Other consumer tax credits include energy-efficient windows, doors, electric water heaters, furnaces, electric vehicles (EV) and EV recharging equipment. Just a couple of weeks ago, SEG Solar announced it will build a 2 GW capacity solar module manufacturing plant in Houston. Construction is expected to begin at the end of this year and be operational by mid-2023. And while this was in the works before IRA, I think we’ll see more solar manufacturing facilities pop up all across the US, thanks to the IRA.
TXSES: Another reason to make sure we’ve got a strong solar workforce! But…what about the delays in permitting? This has been publicized a lot lately.
PP: Bret Biggart, Freedom Solar (and TXSES Platinum Business Member) wrote about this very issue in a recent issue of Texas Monthly. If Texas consumers want to go solar and help relieve pressure on the grid, why make it so difficult? It’s not that difficult a process, and certainly not helping consumers have a favorable view of their utility. But there’s a great tool to help alleviate this issue. Solar App+ software developed by NREL is a free online tool that completely automates the permitting process, shaving five to 10 days off the process. Solar App+ is projected to add solar to 2.4 million homes and 30,000 jobs across the US. We’re working to raise awareness of Solar App+ by Texas local governments and coops so they can deploy it.
TXSES: This was one of the hottest summers on record. We’ve not seen final numbers for August or September but 2022 ranks as one of, if not the hottest summers on record, and the likelihood that this kind of weather pattern is now the norm. How do you see TXSES responding to this over the next five years?
PP: It’s not just summer temperatures that are extreme. Remember Winter Storm Uri in February 2021? This is everyone’s conversation today. What do we do? Where do we go? How do we pivot and adjust to this new existence? Our collective response must be thoughtful, smart, common sense. We formed a policy committee for our business members to ensure we know first-hand what issues are impacting the industry. Five years is just two legislative sessions. In fact, we’re gearing up for the 86th legislative session in January which is safe to assume will have a significant energy focus. We’ll be busy doing what we do best: educating decision-makers and individuals with fact-based information about the value and benefits of solar. We can no longer limp along with an antiquated, volatile electric grid and policies that support the status quo while consumer demand for solar is off the charts. At TXSES, we’re not standing idly by, hoping our decision-makers boldly confront the issues of climate change, drought, extreme heat and cold temperatures. Consumer demand drives policies. We’re deeply committed to our decades-old work to make sure all Texans are educated about solar.
Touted as “the single biggest climate investment in US history,” President Biden signed the historic $739 billion Inflation Reduction Act (IRA) on August 16, signaling an unprecedented level of federal support toward our transition to a clean energy economy.
One of the more celebrated provisions in the IRA is the 10-year extension of the Investment Tax Credit (ITC) which applies to individuals like you and me. Instrumental in launching the solar industry in 2006, the ITC’s 10-year extension at 30% of the cost of the installed equipment will step down to 26% in 2033 and 22% in 2034.
As more Texans consider going solar, the opportunity for scams increases.
Our friends at Austin Energy have details on their website to avoid being scammed. Check it out!!
The Public Utility Commission of Texas (PUCT) is developing a pilot project to investigate how distributed energy resources can boost electric reliability and deliver the proposal to ERCOT by October 11, 2022 to meet a pilot start date in Q1 2023.
ADER Pilot Projects allow ERCOT to evaluate costs and benefits of proposals without full implementation through ERCOT Protocols.
Specifically, the pilot will answer how aggregated distributed generation can support reliability, enhance the wholesale market, incentivize investment, potentially reduce transmission and distribution investments and support better load management during emergencies. The pilot is expected to run for three years.
A 20-member stakeholder committee includes four categories: transmission and distribution providers; rural electric providers; ADER providers; and technical expertise/institutions. Amy Heart, vice president of public policy at Sunrun and TXSES board member, is on the ADER providers committee.
Transmission and Distribution Service Providers Jason Ryan, CenterPoint Energy Chair
Alejandro Ramirez, AEP
Andrew Higgins, CPS Energy
John Padalino, Bandera Electric Cooperative
Martha Henson, Oncor
Retail Electric Providers Arushi Sharma Frank, Tesla
James McGinnis, David Energy
Michael Lee, Octopus Energy
Ned Bonskowski, Vistra
Resmi Surendran, Shell Vice Chair
ADER Providers Amy Heart, SunRun
J. T. Thompson, Generac
Joel Yu, Enchanted Rock
John Bonnin, AutoGrid
Suzanne Bertin, Texas Advanced Energy Business Alliance (TAEBA)
Technical Expertise/Institutions Carmen Best, Recurve
Erik Ela, Electric Power Research Institute (EPRI)
Margo Weisz, Texas Energy Poverty Research Institute (TEPRI)
Miroslav Begovic, Texas A&M University
Scott Hinson, Pecan Street
