Catching Rays Makes CENT$: How Solar Energy Can Save & Even Earn Condo Owners Money
By Ashley Wright
Implementing environmentally friendly changes during a time when condominium owners' and associations' budgets are shrinking may not seem like a viable solution to their list of problems, but solar energy contractors around the gulf coast said owners would experience a relatively quick return on investment if they will just hear them out and give their products a try.
"Community associations cannot afford not to be green in light of the long-term cost-saving opportunities," said Lisa Magill, an attorney with the law firm Becker and Poliakoff, which represents a number of condominium associations in Florida.
One group that has already caught on to the solar energy solution is the owners of the 35 condominiums at Villa Candalaria in Salem, Ore. They learned that a solar pool heating system would pay for itself in about nine years, before incentives and tax credits, and lower energy costs by approximately $800 each year. The installation of the solar pool heating system coincided with a new roof installation on their recreation center. This is significant because the pool's 30,000-gallon system included 576 square feet of rooftop solar collectors that preheated water for the 800-square-foot outdoor pool that operated during the summer months. "The system has worked very much to our satisfaction," said Sandra Henry of the complex. "The first summer we reduced our gas bill by one-half. And we've had no mechanical problems, which is important because we're self-managed."
A variety of technologies are available for converting sunlight into usable energy: a passive solar design heats space; a solar thermal system uses panels to heat water; and a solar photovoltaics (PV) system produces electricity from sunlight through solar panels.
Passive Solar Heating: The National Renewable Energy Laboratory (NREL) describes passive solar heating as taking advantage of the natural resource of heat and light as someone could walking around outside. Buildings can be built with large, south-facing windows, because the south side of a building receives the most sunlight, or with materials that absorb and store the sun’s heat.
Solar Thermal Systems: For heating water in a condominium or pool, solar thermal systems have two main components, according to the NREL - a solar collector panel and a storage tank. The most common collector is called a flat-plate collector, which is mounted on the roof and consists of a thin, flat rectangular box. Small tubes run through the collector and carry either water or a fluid such as an antifreeze solution to be heated by the sun. As heat builds up in the collector, the fluid running through the tubes is heated. A storage tank—which could even be a modified water heater—stores the warmed liquid. Or, if a fluid other than water is used, water is heated by passing it through a coil of tubing in a storage tank that is filled with the heated fluid.
Solar Photovoltaics (PV) Systems: PV systems create electricity for a condominium-whether it's for individual units or common areas or both. PV is named after the process of converting light (photons) into electricity (voltage), which is called the PV effect and was first introduced in 1954, according to the NREL. Solar cells, typically made from silicon, are the basis of solar panels when using PV technology. The number of solar panels used to power a project depends on the size of the condominium and what is being powered by the system-only common areas or entire units. The amount of space available on a roof could also determine the number of solar panels required. The panels are mounted at a fixed angle facing south or have a tracking device that follows the sun.
While selling the positive aspects of solar energy may be fairly easy, there are obstacles to overcome, according to Keith Foster, vice president of sales and marketing for Alabama Gulf Coast-based Distinctive Products (DP). "They see it, they believe in it and they know it's going to work. It's the upfront costs that don't always match owners' or associations' budgets or what they think is possible," he said. "But, it is possible. It may be a challenge, especially now that credit's tighter, but we're finding those resources to make it happen, help cut costs and see a return on investment fairly quickly."
Mark Friedline, founder of Gulf Coast Solar Inc., also weighed in on the topic. "The last
couple of years have been turbulent for the real estate market, and the normally protracted decision-making process of condo boards has become even more tentative."
However, Foster said, the solar energy solution is a payback owners can realize month after month and year after year. "The nice thing is that a lot of the leasing options we're looking at involve transfer of ownership after the lease period," he said.
Although DP, which offers solar PV, solar thermal and LED lighting technology, is still ironing out the details of its leasing option, the company anticipates leases for equipment will cost less than the monthly payback on average. "So, it ends up giving the association a positive cash flow with no upfront investment," Foster said. "And after the leasing period expires, then all of the payback goes to the association. So, it's a way to cut costs a little now and in the long term really cut them." Foster added that if a lease runs, say, up to 15 years, then that association knows what its expense is going to be for the next 15 years. "If they're dealing with an electric company or gas company, that number for energy costs could go up significantly."
Although there are more tax credits and incentives in play on the federal and state levels for residential investors, there are a number of state-level incentives for multi-family and nonprofit buildings-where many condominiums fall. In the state of Florida, for example, buildings that fit these categories are eligible for a state rebate program that includes solar water heating, PV and solar pool heating. To be eligible for the program, PV systems must be two kilowatts or larger and solar water heating systems must provide at least 50 percent of a building's hot water consumption.
Eventually, the solar energy a condominium produces could actually become a source of revenue, Magill said. For instance, in Gainesville, Fla., the city council was the first in the nation to approve a feed-in tariff for solar PV energy production or, in other words, if a condo generated more electricity than it uses it could be sold back into the system, so the association then would receive payments for each kilowatt-hour produced (in Gainesville, for example, 32 cents per kilowatt hour that is not used and is sold).
According to Florida Power and Light's website, customers generally pay around 12 cents per kilowatt-hour of energy. "Expansion of this feed-in tariff system to other portions of Florida provides community associations with not only the opportunity to save money but also to create an additional revenue stream, reducing the financial burdens to homeowners," she said.
Foster encouraged associations to consider solar options if not for the environment then for the savings on energy bills. "On the gulf coast, it is very viable to invest in solar pool heating year-round to offset gas or electric bills, especially during the lower temperatures. In pool heating, solar is extremely efficient and cost-effective," Keith said, adding that associations that employ the use of solar pool heating technology would see the quickest return on investment. "The cost to heat a pool, as all associations know, is just incredible, so anything you can apply to that using solar thermal energy is going to reduce their costs." Friedline added, "Pool heating paybacks can be in under two years."
For associations that want to use green strategies to save money, the first step, according to the DP team, is to conduct an overall assessment of how an association is spending its energy dollars and employ techniques that are fairly simple, like replacing fluorescent lights with light emitting diodes (LED), which according to Bill Oakes, DP's new energy business manager, would reduce energy cost by about 40 percent. Then, with the savings from installing LEDs, associations can afford to install PV systems to offset even more of the energy costs. "It's about the whole scheme of things," he said. "You want to look at the large picture, not just select the installation of one item over another. Conservation is definitley the first step in any renewable energy program. Find out where you're wasting and where you can save and make those changes. Then, you can implement the renewable energy devices, whether it be solar thermal or PV."
Oakes said that many of the LED lights on the market right now will provide "rock solid" use for years and that they're not producing as much heat, therefore not using as much energy, which cuts costs. "It also reduces maintenance costs," Oakes said. "You aren't having to replace light bulbs." LED lighting goes beyond the compact fluorescent light bulbs, Foster said, and have a tremendous lifetime with many rated in 10 years-plus. "We see them as a really essential part of how a condo can go about reducing its energy footprint. It's a newer technology, and a lot of the major players in the lighting industry have not yet gotten on board with a full line of products, so we're having to find a number of reliable sources."
Even compact fluorescent light bulbs (CFL) that are being touted as green are not the most energy efficient products on the market, according the DP team. LED lights are quickly catching up and surpassing that technology with LEDs typically using 80 percent less energy than incandescent lights and 30 percent less energy than CFLs, according to eco-structure magazine, which also found that LEDs can be dimmed more cost effectively by varying the current and do not have the mercury issues that plague fluorescent lamps.
Another benefit of installing energy-smart technology, solar or otherwise, is boosting resale value. Condos in the United States with built-in, energy-efficient appliances and solar panels retained their value in the housing market crash, according to a report by the Philadelphia Business Journal. "Lower utility bills cause the property to stand out from its competition," Magill said.
