After a rough patch during the economic downturn a decade ago, solar power has been on a roll lately.
In 2011, California lawmakers set an ambitious target for utilities to generate 33% of the state’s electricity from renewable energy like solar farms and wind turbines by 2020. It seemed like a lofty goal. But California reached it two years early, hitting 34% by the end of 2018. As a result, air pollution is down in most places, and the state’s greenhouse gas emissions have fallen 14% from their peak in 2004.
Meanwhile, last month at an event near Fresno, former governors Arnold Schwarzenegger and Jerry Brown celebrated the state reaching 1 million solar rooftops on homes and businesses — a goal Schwarzenegger set in 2006, and primed with tax credits and other incentives.
Today, 6.6% of California homes have solar panels on their roofs. And new state building codes that took effect Jan. 1 require all new homes to be built with solar panels or powered by a larger solar array somewhere else.
Barry Cinnamon — CEO of Cinnamon Energy Systems, a solar and battery storage installing company based in Campbell — has seen the industry’s ups and downs for 40 years. An MIT engineer who founded several internet companies in the 1990s, Cinnamon shifted gears following the Dotcom crash in 2000, founding Akeena Solar in 2001, and has been a solar industry leader ever since.
Cinnamon also hosts a weekly radio show about energy issues every Saturday at 1:30 p.m. on KDOW 1220 AM.
This conversation has been condensed and edited for clarity and length.
Q: It’s common to hear that solar power has come down in price. How much has it dropped over the last 10 or 20 years? Why?
A: People in the solar industry have historically calibrated costs on a dollar-per-watt basis. In 2001, the average residential system was about 5,000 watts and cost about $50,000. That’s about $10 a watt. Rebates and tax credits brought the payback down to 7 to 10 years. Today, here in the San Jose area, the average system size is about 7,000 watts and costs about $25,000, or $3.50 a watt, with paybacks in the 4-to-8 year range. Because of their size, commercial systems are even cheaper, at about $2.50 a watt.
The biggest reason for the price decline? Mass production of solar panels. The average cost of a solar panel has dropped from about $1,000 to about $200. On the other hand, all other costs have gone up, especially labor.
Q: If it’s that cheap, why hasn’t everybody put solar panels on their homes?
A: They will, it just takes time. We go from from “innovators” to “early adopters” to “early majority,” where we are now, and then “late majority.” I would love it if adoption rates were faster.
It’s not a matter of economics. Without a doubt, the financial benefits of installing rooftop solar are better than any other low-risk investment you can make.
Really, the only situations where businesses or homes won’t install solar is if they don’t have sunny rooftop space. The equipment is reliable, with a 25-year warranty on solar panels, and electric rates continue to rise.
Q: What’s your take on California’s new building regulations that require basically every new home to be powered by solar energy?
A: I’m obviously biased, but it’s a great step forward. Sometimes government needs to do things that the free market would delay. California has benefited greatly from safer and more efficient building standards, as well as energy-saving technologies, from electric vehicles to insulation to LED lighting.
Q: What about folks who say those rules will raise the price of housing?
A: Yes, solar will increase the price of a house. But everyone, I mean everyone, gets a home mortgage. And adding solar to a new home will increase the cost of a mortgage by $40 a month, according to the California Energy Commission’s estimates, but save $80 a month in energy costs.
Q: What’s the main hurdle right now for getting more of California’s electricity from solar power?
A: Without a doubt the main hurdle is opposition from electric utilities. They put a happy face on solar, and have installed a lot of their own utility-scale solar generating facilities. But there are so many barriers they put in place to frustrate businesses and homes from installing solar, mostly by increasing costs or making the process complicated.
We need to explain to people why utilities’ cost for electricity is 3 cents a kilowatt hour, but they mark it up ten times by the time they sell it to a consumer.
Fundamentally, the utility business model is broken. Consumers can generate their own electricity for a fraction of what the utilities charge. But utilities use their monopoly power to force consumers to purchase their product, and regulators have historically been ineffective at ensuring that consumers have cheaper and safer alternatives.
Q: Fast forward 20 years. Give us a prediction of where you see solar power in California.
A: I don’t just think solar power now. I think solar plus battery storage. And in the future there will definitely be better energy management systems for all buildings, incorporating solar, batteries, electric vehicles and full electrification. These systems will be operated to further reduce energy costs and improve reliability and safety for consumers — not to maximize profits for utilities.
Our last three governors have done a terrific job extending California’s lead in renewable energy. Our collapsing utilities and wildfires demonstrate the need to even more rapidly shift toward generating power on the rooftops of the buildings that use it.
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Barry Cinnamon
Age: 61
Position: CEO, Cinnamon Energy Systems
Hometown: North Caldwell, NJ
Residence: San Jose
Education: BS, mechanical engineering, MIT, and MBA from Wharton
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Five facts about Barry Cinnamon:
- An electronics geek, he has several home-made audiofile-quality tube amplifiers at his house, one of which has a volume control that actually goes up to 11.
- He and his wife enjoy cooking, especially on the wood-fired pizza oven in their back yard.
- They moved into a new home in San Jose in January 2019, and promptly replaced all the insulation, then installed solar panels, replaced the furnace, air conditioning unit and water heater with heat pumps, and ditched the gas stove for an electric induction model. PG&E recently sent an inspector to the house to see why the gas meter almost never moves.
- More than a decade ago, after his company opened in Los Gatos, it got into a battle with city officials, who put up barriers to solar power, saying the panels were ugly. After a public outcry, the town relented and now is considered solar-friendly.
