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Fresno Subdivision is Solar: Valley Pacific Builders is Constructing 44 Homes That Use Sun for Energy.

Posted on: Sunday, 14 May 2006, 18:01 CDT

By Sanford Nax, The Fresno Bee, Calif.

May 14--The developers of Villa Carmel hope the built-in solar energy system will distinguish their subdivision from dozens of other tracts in the central San Joaquin Valley.

The 44-house subdivision that Valley Pacific Builders is constructing in northwest Fresno is believed to be the first in Fresno County to have solar energy standard in each home. A grand opening celebration is set for Friday.

Other builders offer solar as an option, but David Wasemiller and Garland Nelson, who own Valley Pacific, are going one step further. "We're testing the market," Wasemiller says. "We want to be on the cutting edge and are taking a little bit of a chance."

The move is a little risky because a solar energy system adds to the construction costs. The 3-kilowatt system that Valley Pacific is installing in the houses near Blythe and Shaw avenues retails for about $26,000, Wasemiller says.

But the company, trying to stay competitive, was reluctant to pass the costs on to the buyer. Instead, the two men, because they are buying in volume, negotiated a reduced price on the solar and are willing to accept a lower profit margin on development of the housing tract. They also bought the subdivision land four years ago before real estate prices soared, they say.

Founded in 2002, Valley Pacific builds about 50 houses a year, mostly in so-called "infill" areas. Being family owned, the company does not have the same profit pressures that larger, public home builders do, Wasemiller and Nelson say.

Villa Carmel will be in a gated subdivision, with houses from $309,000 to $379,000. They range from 1,346 square feet to 1,720 square feet and include such features as custom wood cabinets, granite countertops, tile roofs and alarm and sprinkler systems.

But solar is the feature that captures the most interest. With energy prices rising, more families are interested in solar power. More than 17,300 solar systems were connected to the energy grid in California at the end of 2005, according to the California Energy Commission.

But with the demand has come worries about supply. The solar industry now competes with the semiconductor industry for polysilicon, a key component.

"The demand [for solar] has been steadily growing each year," says Bill Kelly, vice president of the residential division of Berkeley-based PowerLight, which buys solar cells and designs systems.

The 3-kilowatt system at Villa Carmel is expected to knock about $100 off the monthly power bill, and possibly more because it is combined with radiant roof barrier sheeting, which keeps the houses cooler in the summer and warmer in the winter.

"They could have a minimal electric bill," Wasemiller says. At Villa Carmel, the solar panels are on the back side of the roof, so they are less intrusive.

The interest in solar energy has kept pace with increasing energy costs, but many builders in the Valley have been reluctant to include the systems as standard because it would hike up home prices, even with rebates from the California Energy Commission.

In this case, the rebate of $2.80 per watt, or $8,400 per house, is being used to help offset the installation costs.

The builders also could receive a tax credit but instead elected to pass that onto the home buyers, who can get $2,000 off their federal income taxes the first year, says Gregg Fisher, a consultant with Los Osos-based REC Solar, which is providing the solar system.

Valley Pacific is believed to be the first builder in the central San Joaquin Valley to offer solar as standard, but it is not the first in the state. Several developers have constructed or plan solar-powered tracts, including Lennar, which proposes the nation's largest -- 450 houses -- in Roseville.

The state Public Utilities Commission has approved $2.9 billion in rebates over the next 10 years to encourage solar installation. But concern exists over a possible shortage of polysilicon necessary to make solar cells.

"Currently, the demand for solar is so high that it has outstripped the supply of silicon, which is used to make the panels," says Matthew Woods, director of sales at REC Solar.

Valley Pacific has procured the solar panels for Villa Carmel, so home buyers can be assured of getting a system installed, Woods says. And because silicon is made of sand, there is no shortage of the raw material. Rather, what's lacking is the ability of the refining process to keep up with demand, he says.

The shortage is expected to last from two to five years as production capabilities ramp up, Woods says.

Kelly says he doesn't characterize the situation as a shortage, although he acknowledged, "Supply is catching up with demand."

In 2000, the solar industry reportedly consumed 10% as much polysilicon as the semiconductor industry. Now, they are about equal, Kelly says. California is the third-largest solar market behind Japan and Germany.

"It's a big investment to build a plant," Kelly says. "It takes a couple years to build one of those facilities. There are many new plants worldwide that are planned."

The reporter can be reached at snax@fresnobee.com or (559) 441-6495.

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Source: The Fresno Bee

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