California will become the first state in the country to require solar panels to be installed on all new home construction. The solar mandate in California is set to take effect in 2020. There are exemptions for homes that are built in areas where the installation of solar panels is ineffective because of limited sun exposure. There are also incentives for homeowners to install high capacity battery systems to store some of the solar produced electricity. The battery systems will prevent an excess of electricity from being sent into the power grid.
California has historically been a leader in environmental changes, and the solar mandate is just one more example of Californias commitment to the environment. The state has set the goal of becoming dependent on 100% renewable energy sources by the year 2045. As a result, reducing greenhouse gas emissions for electricity use considerably.
The solar panel mandate was initially endorsed as part of the state’s Green Building Standards Code by the California Energy Commission in May of 2018.
The solar mandate applies to all single-family homes and multi-family homes that are three stories or less. The requirement of solar in new home construction is expected to cost an addition $10,000 to the cost of new home construction. This additional cost will increase new construction home costs while homeowners should expect to save approximately $19,000 over 30 years as a result of the solar panels. The mandate will not affect many home prices because most new home builders have been including solar panel systems on new homes for several years.
New homebuyers in California will have three option for paying for the costs of the solar panels. The options include -pay them outright, leasing them, or entering a power purchase agreement with developers. A fourth option exists for some for communities, that would be to “pool resources.” Pooling resources would require a solar field instead of installing solar on every home individually. Some Home Owners Associations are actually managing the community solar commitments.
Many economists worry that the solar power mandate will result in an immediate impact on new home buyers as well as real estate developers. Industry groups largely support the new rule.
With California’s goal of achieving a carbon-neutral energy status within the next 30 years, the California Energy Commission stated that we are 32 percent of the wat to achieving that goal.
All new homes will be advertising solar as a unique feature of their construction. Homebuyers should be aware that this a mandate and that all builders of new homes will be offering solar.
Homebuyers and their agents should inquire what type of solar package offered and how the solar is going to be paid off. Buying the solar package is typically the best option, but it will increase the purchase price of the home. When the home is sold with a lease, care will need to be taken as it could result in hidden charges to the new homeowner. An experienced real estate agent will be able to help you navigate the lease agreements and advise you of any fees that it may incur.