Final hurdle cleared in California’s solar mandate for new homes

In the words of Kelly Knutsen, it’s officially official. Today the California Building Standards Commission unanimously voted to confirm a change to the state’s building code which will require that all newly built low-rise (three stories or less) residential units in the state either incorporate rooftop solar or hold a community solar contract, starting in 2020.

“These highly energy efficient and solar-powered homes will save families money on their energy bills from the moment they walk through their front door,” stated Knutsen, the director of technology advancement for the California Solar & Storage Association (CALSSA). Knutsen also notes that this will include a solar plus storage option.

It’s hard to say how many new homes will be built with solar on them come 2020. The state has seen between 36,000 and 213,000 homes built each year for the past 15 years, and last year was somewhere in the middle at 113,000. CALSSA estimates that only around 15,000 of these new units featured solar, meaning that the mandate could spur a 7-fold increase in the market for solar on new homes in 2020.

After the mandate was approved by the California Energy Commission (CEC) in May, GTM Research estimated that this could mean a 14% increase in the California residential solar market to 1.2 GW in 2020.

But the greatest impact may be on prices. According to an analysis by pv magazine USA Correspondent John Weaver and ASU energy security researcher Dr. Wesley Herche, the soft cost savings of installing solar in massive volumes on new homes – including economies of scale – could drive these installations down to $1.12 per watt. The pair further found that the electricity from these homes could be as cheap at 2.5 cents per kilowatt-hour.

And here is where the savings come in. By the CEC’s more conservative estimates, homeowners will save $40 per month and $500 annually due to the new standards – even with a $40 per month increase in mortgage payments.

Expansion of the mandate?

And this may be just the beginning. A poll by Morning Consult has found that nearly 2/3 of Americans – across the political spectrum – support such a mandate, and a city council member in Milwaukee has proposed legislation for his city based on California’s mandate.

This does not seem to surprise Sunrun, which as one of the larger residential solar companies is one of those best poised to supply large homebuilders. “Home solar is a cost-effective way to support clean air and energy savings for families and we are optimistic that other states will adopt similar common sense policies that expand access to clean energy,” stated Lynn Jurich, Sunrun’s CEO and co-founder.

Additionally CALSSA’s Knutsen says that CEC is planning to push a similar version of this mandate for larger residential and commercial buildings, which could take effect in 2023.