Lancaster, Santa Clarita Part of KB Homes Solar Plan

KB Homes is enticing homebuyers with lower energy costs by offering homes with solar power systems as a standard feature in select Southern California communities, including ones in Lancaster and the Santa Clarita Valley. The homebuilder is taking this step to better compete with homes being offered at resale and produce sales in a climate where home purchases remain weak. FOUNDED: 1957 HEADQUARTERS: Los Angeles Area communities: Ascent at Warner Center, Woodland Hills; Echo Pointe and Echo Ridge, Santa Clarita; La Vista at the Collections, Palmdale; Alamosa, Lancaster; Arroyo, Lancaster; Madeline Court, Palmdale; Bedford and Sedona II at Terreno Vista, Lancaster. solar program: A 1.4 kw solar system will be standard feature at homes in Arroyo, Echo Pointe and Echo Ridge. KB has partnered with SunPower Corp. to provide the solar panels and other equipment for the homes. In addition, the builder includes in every home an Energy Performance Guide similar to the miles per gallon information for new cars that can show what energy costs will be. “We are so far ahead we can show the cost on a sticker on every model,” said Steve Ruffner, Southern California division president with KB. “What this does is ranks us against other new homes and used homes.” KB has offered solar equipment as an option on homes in California and Colorado but to make it standard is, in Ruffner’s words, a game changer. Residential home builders need whatever advantage they can drum up to get potential buyers to look at what they have to offer. New home sales in February totaled 250,000, according to figures from the U.S. Commerce Department. That is a 17 percent drop from January and a 28 percent decrease from February 2010. Existing home sales were no better, with a 9.6 percent drop, according to the National Association of Realtors. Despite the gloomy picture, KB opened this month the Arroyo community of 90 homes in Lancaster and Echo Pointe and Echo Ridge with a combined 220 homes in Santa Clarita. These communities join ones in ChulaVista, Eastvale and Temecula offering the standard solar equipment. Several solar projects The abundant sunshine has drawn multiple solar projects to the Antelope Valley, with Lancaster taking a lead in alternative energy production. The city’s minor league baseball park installed an energy-efficient lighting system powered by a solar array. Five more city facilities will also have solar power. Last year, KB and Chinese manufacturer BYD Corp. teamed up to offer a solar power system that included a battery to store the power and LED lights. The city took the role of matchmaker to make that happen, and waived its development fees for the model home with the system and the four homes offered to buyers. For KB to partner with BYD, it had to be assured that the additional cost of the energy efficient homes would not be passed on to the buyers. By choosing SunPower to provide the solar systems, KB went with a company well experienced in alternative energy. In addition to having worked with other home builders, SunPower has also done projects with utilities, school districts, and major corporations. In January, SunPower signed an agreement to deliver 711 megawatts of power to Southern California Edison. Two solar arrays planned for near Rosamond in the Antelope Valley will be operational in 2016. “We got a price and value from SunPower that is the best value per kilowatt,” Ruffner said. The basic solar system will produce 1.4 kilowatt of power, or enough to reduce energy costs by 30 percent for a 1,800 to 2,000 square foot home. For an additional $5,000, the system can generate more kilowatts of power. Tax credit Homeowners will also benefit with a tax credit that will cover 30 percent of the cost of the system, which Ruffner valued at about $7,500. If providing the solar systems as a standard feature is well received in the initial communities, KB would consider expanding it to more, Ruffner said. KB President and CEO Jeffrey Mezger, in a prepared statement when first quarter earnings were released on April 5, included sustainability initiatives as one of the ways the company is differentiating itself during a down market. For the quarter ending Feb. 28, KB reported a net loss of $114.5 million, or $1.49 per diluted share, on revenues of $196.9 million. That is a wider loss when compared to the same period a year when the company reported a net loss of $54.7 million, or $.71 per diluted share, on revenues of $264 million. Contributing to the poor quarter was a $53.7 million charge and a loss on loan guaranty of $22.8 million related the bankruptcy of a Las Vegas project in which KB was a partial owner. In its most recent earnings report, for the fourth quarter ending Jan. 2, SunPower had net income of $152.3 million, or $1.44 per diluted share, on revenues of $937 million. For the same period a year ago, the company reported net income of $8.5 million, or $0.per diluted share, on revenues of $547.9 million.