California About to Mandate Rooftop Solar on All New Homes

A Solar settlement in Freiburg, Germany (Photo – en.wikipedia.org).

The California Energy Commission is the state agency responsible for developing and enforcing energy efficiency standards for new buildings. The result of these stringent codes, starting in the 1970s, has been higher construction costs but saved energy bills and pollution overall.

By Ethan Elkind

Now the commission is poised to vote today on a significant new mandate: rooftop solar on all new all new single-family houses built after January 1, 2020, as well as new multifamily buildings up to three stories tall.

As the San Francisco Chronicle reported:

Together with tough new efficiency standards for windows and insulation that the commission will consider Wednesday, the solar mandate could add $10,538 to the cost of building a house, by the agency’s own estimate. The extra expense would hit at a time when California is suffering a severe and deepening housing affordability crisis.

The move’s supporters insist the solar homes would save their owners money by slashing monthly utility bills. That savings could be worth $16,251 over the 30-year life of the house, according to the commission.

The commission took years to develop this proposal and studied the costs and benefits carefully. The agency commissioned a detailed study last year summarizing these findings, which showed the benefits of the policy exceed the costs in every climate zone in the state.

Meanwhile, for developers who don’t like the added cost of the panels to the construction bill, it’s worth noting that a Lawrence Berkeley National Laboratory study from 2015 found that prospective home buyers place a $15,000 average premium on homes with solar compared to similarly situated homes without. This premium would more than compensate developers for the increased construction costs, as homebuyers properly value the utility savings going forward.

In the long run, the move may force the California Public Utilities Commission to scale back incentives for rooftop solar from the current arrangement of giving retail credit to homeowners for their surplus power generation. With every new home having solar, the policy won’t be financially sustainable going forward.

But for now, the upside of a mandate would be a huge boon for the solar industry, as well as significant greenhouse gas emission savings from reduced energy demand from the residential sector. It would also be a powerful statement on climate change and clean energy from the fifth-largest economy in the world, as well as a big boost for renewable energy generally.

Ethan Elkind directs the climate program at UC Berkeley Law, with a joint appointment at UCLA Law. His book “Railtown” was published by the University of California Press.