What California’s Solar Mandate Means for New Home Construction

by Ben SanfordMarch 11, 2019

A Chicken in Every Pot and a (Solar) Panel on Every Roof

As reported in several national magazines, websites, and California-based forums back in mid-2018, the California Energy Commission sent down a ruling that just about every newly constructed home in the state, beginning in 2020, has to come equipped with rooftop solar.

This was done, in part, to help California get to its goal of obtaining at least half of its energy from renewables by the year 2030. And it’s a major win for solar advocates, environmental groups, and solar installers and manufacturers.

But, is it a win for homeowners, or for those looking at buying a newly constructed home in 2020 beyond? Understanding what this ruling means for homeowners and those in the real estate business has been somewhat challenging. In this post, we will take a look at the impact that this ruling may have on buying a home, property values, and selling homes in the state.

what california solar mandate means for housing

The Mandate – Beyond Solar

The mandate has been dubbed the “solar mandate” by journalists, but it goes far beyond requiring solar panels on newly constructed homes. As reported on Futurism and elsewhere, the 2019 Energy Efficiency Standards also require new buildings to have better ventilation and insulation, and more energy efficient lighting upgrades, as well as demand-responsive technologies that conserve water and energy.

But the mandate itself doesn’t provide a minimum amount of solar, or any of these technologies and it doesn’t require that every new home have solar power, etc. It only applies to newly constructed homes built beginning in 2020, and it only applies to homes, apartments, and condos three stories or shorter in height.

This may mean that some developers elect to go for four stories when building new apartment buildings in order to sidestep the mandate.

But, given the relatively low cost of solar (compared to overall construction costs), this kind of sidestepping may not come to pass. Also, developers can substitute a communal solar system for entire developments, rather than putting individual systems on each condo, townhouse, or individual home.

what california solar mandate means for housing

The Impact That the Mandate Will Have on Construction and Home Costs

All that being said, solar power systems and demand-responsive technologies are not without their cost, so this mandate will have an effect on construction and new home costs.

Presumably, this cost will increase the value of a home, but with depreciation being a factor, especially with rapidly evolving technologies, recouping the estimated $9,500 this will add to the average new home price tag may come down to appreciating the estimated $19,000 in energy bills and maintenance costs this is estimated to save homeowners over the course of a thirty-year period. Regardless, the additional costs do have some affordable housing advocates up in arms.

But the positives seem to outweigh the downsides for most parties involved. Silas Ellman of California-based RGR Marketing, which provides solar leads to several installation companies in the state, said that, “on the surface the new CA solar mandate is a huge positive for everyone involved. It should create jobs, help reduce coal emissions, and make everyone more aware of the benefits of going solar while saving money on their utility bills.” If even a third of this comes to fruition, it should be a net benefit for the state residents.

what california solar mandate means for housing

There Goes the Nation (?)

It is important to note that, at least as far as progressive policy and legislation goes, California is a bit of a bellwether for what may happen across the country, or at least in the other progressive states – looking at you Oregon, Washington, Colorado, Massachusetts, and Vermont.

This may be one progressive step that does not inspire other states to follow suit, but then again it may. It’s often the case that when one of these states takes a progressive step, the others follow suit. Remember the bottle bill in Oregon, recreational cannabis in Colorado, gay marriage in Massachusetts? A solar mandate could be coming to a state near you in the near future.

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About The Author
Ben Sanford
Ben is a real estate agent and freelance writer. He's lived on the east coast his entire life and is just as "at home" on a snowboard as he is in the office. When not writing about local real estate markets and researching hot new tips for homeowners, he can be found working on his home renovation projects with help from his wife Melissa and their kids, Josh and Cheyenne.

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