STEVE INSKEEP, HOST:
Let's talk now about a different kind of technology - solar power. Solar is a clean source of energy long considered too expensive, but now that's changing. Jacob Goldstein of NPR's Planet Money team has been asking why solar power has grown so cheap so fast.
JACOB GOLDSTEIN, BYLINE: John O'Hagan is a retired New York City police officer. He got solar panels installed on the roof of his house last week.
Tell me about your house.
O'HAGAN: What do you want to know - where the termites live?
(LAUGHTER)
GOLDSTEIN: It's a nice house - not fancy. John's not rich, and he is definitely not getting solar panels to save the world.
Does the environmental part of it - is that meaningful to you? Does that matter?
O'HAGAN: Not really (laughter).
GOLDSTEIN: John is getting solar power because he's decided it's a good deal, which, until very recently, was not the case.
O'HAGAN: A few years back, I looked into it just for the savings, and every company wanted thousands of dollars.
GOLDSTEIN: Do you have a thousand dollars for panels?
O'HAGAN: That's why there are no solar panels on this roof till today (laughter).
GOLDSTEIN: John's getting solar panels today because three big things have changed. The first is the panels themselves. Just a few years ago, panels were five times as expensive as they are today. The reason for the falling price is written in little letters on the back of the panels going up on John's roof.
So what does this say? So it says Trina Solar, smart energy together, made in China.
What's important there is just the last bit.
Made in China.
A few years back, China got into the panel business in a big way - subsidized loans, lots of new factories. In fact, too many factories. When they all came online, there was this massive glut in solar panels. Prices collapsed, and they've stayed low, but panels are only part of the cost. You still have to pay people to put those panels on your roof. At John's house, there was a crew of six guys - four installers, two electricians. Every hour those guys are out there costs a lot of money. And this is the second thing that is changing. Installation is getting faster. Lee Kashishian works for SolarCity, the company that's installing the panels on John's roof.
How long is it going to take?
LEE KASHISHIAN: Four hours - yeah, I could say...
GOLDSTEIN: Four hours - so how long would a plain-vanilla installation have taken - I don't know - five years ago, 10 years ago when you got into the...
KASHISHIAN: This installation - probably about two days.
GOLDSTEIN: Two days.
KASHISHIAN: Yeah.
GOLDSTEIN: And now it's half a day.
KASHISHIAN: Half a day - it's very huge, very huge.
GOLDSTEIN: Part of the reason the time has come down so much is this new installation system that lets the guys on the roof snap the panels into place one after the other.
KASHISHIAN: And that first row is going to go up in - I don't know - two minutes.
GOLDSTEIN: Well, let's see. What time - what time is it? Let's see how long it takes.
KASHISHIAN: 9:59.
GOLDSTEIN: 9:59.
KASHISHIAN: You're on the clock, Bry (ph).
GOLDSTEIN: Two minutes.
The guys on the roof start rocking the panels back and forth, snapping them into place. Six panels later, the last one in the row is in.
So it's in - wait - it's in, right? That's it.
KASHISHIAN: That's it.
GOLDSTEIN: How are we doing? What time is it?
KASHISHIAN: Yup, we beat two minutes. We're a minute, 48 (laughter).
GOLDSTEIN: They figure they'll be done by lunchtime. So those first two things - cheaper panels, faster installation - means solar power is much cheaper than it used to be. But for a typical house like John O'Hagan's, it still costs a lot - somewhere around $25,000. And this is where we get to the third big breakthrough that's made solar take off - financing. John O'Hagan is not paying $25,000 to buy the panels. In fact, he's not buying the panels at all. The panels belong to SolarCity. John's not paying anything up front, but he signed a contract promising to pay SolarCity a monthly bill for the next 20 years. So quick summary - cheaper panels, faster installation, creative financing. And there is one other thing that's been driving solar power - subsidies from the federal government and from many states. For John O'Hagan, the decision to get solar came down to a really simple calculation.
So how much are you paying now for your power bill?
O'HAGAN: About $180 a month.
GOLDSTEIN: And so you're paying $180 a month. How much do you expect you're going to be paying in this?
O'HAGAN: It should come down to about $100-$110 a month. Once the switch gets flipped and these guys hook me up to the electric box, I'm all set.
GOLDSTEIN: If solar power really takes hold, it will be because of people like John. People who are doing it not to save the world, but just to save a few bucks. Jacob Goldstein, NPR News. Transcript provided by NPR, Copyright NPR.