SMUD Still Sunnin’

By Published On: October 26, 2007

Despite a recent downturn in the housing market as well as a record financial loss by a residential development partner, the Sacramento Municipal Utility District is still moving forward with plans to build hundreds of solar powered homes in its service region. Back in March, SMUD formed a pact with the Sacramento division of Miami-based developer Lennar Corp., for the largest new solar homes partnership in the U.S. Under the agreement, Lennar would develop more than 1,200 “SolarSmart” homes in 18 communities throughout the SMUD service area by 2010, including about 189 this year. That agreement appeared in jeopardy in late September, after a downward spiral in the national housing market led to Lennar Corp. posting a record loss of nearly $514 million in the third quarter of this year. The company has trimmed its employee roster by 35 percent, indicating it will make more cuts in the coming weeks and months. However, Bill Layne of SMUD’s SolarSmart program says that Lennar has given no indication that it cannot or will not fulfill its contractual obligations in Sacramento. “Absolutely not,” he said regarding whether Lennar has said it wants out of the agreement. “We’re experiencing a (housing market) slowdown here too, but it hasn’t affected solar.” In fact, according to Lennar, sales of its solar homes have been outpacing neighboring, comparable homes without solar power systems. Under the SolarSmart program, electricity generated by the solar system is credited to the residents’ utility bill. When the system produces more electricity than is being used, the residents’ SMUD bill is credited. SMUD says the solar systems will reduce annual electric bills by up to 60 percent. Of the 189 homes with built-in solar panels to be built this year, Lennar is scheduled to build 50 to 60 percent, while a Sacramento-area company, Tim Lewis Communities, will build the remainder. In May, SMUD and Tim Lewis Communities signed a deal to build 183 solar-powered homes in three communities. In August, the utility signed deals with Homes by Towne to build 355 SolarSmart homes and with Centex homes to build 107. In each of the agreements, SMUD provides funding to buy down the cost of solar and energy efficiency equipment in all the homes. In 2008, SMUD expects over 1,200 homes to be built, but the work will be spread out through several builders. Lennar is one, Layne said, but SMUD expects between three and five other builders to also participate. However, Lennar is scheduled to build 758 solar homes for SMUD in 2008, well over half of the total number of 1,254 that SMUD hopes to have built next year. Also, Lennar’s Bay Area division is working with Pacific Gas & Electric on new solar homes. In February, Lennar Bay Area opened its first solar community of 77 homes in the Milano community in Danville.

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