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Everything You Need to Know About California's Solar Mandate

Jessica PirroDecember 4, 20196900

California is a leader in many industries, including the solar power industry. Solar in California tops the Solar Energy Industries Association’s list, in regards to states with the most solar energy capacity installed. California has four times more installed solar energy than the runner up, North Carolina.

While California isn’t struggling in the sunshine department, it surprises a lot of people when they find out the sunshine and savings aren't the main driving forces behind some of the new solar panel installations throughout the state. One of the main reasons that solar in California is so successful is because of the bills that have been introduced pushing for solar-powered systems.

The future of solar in California is starting to look brighter than ever, thanks to the first-of-its-kind solar panel installation mandate. This mandate is a new code that requires all new homes to be equipped with solar panels.

What is California’s new Solar Energy Mandate?

The new solar energy mandate in California is a new building code that is going to require all new homes to have solar-powered systems as an electricity source. This solar energy code goes into effect on January 1, 2020. It applies to both single-family and multi-family homes that are up to three stories high.

The solar-powered system needs to be large enough to meet the annual electricity usage of the building, given the fact that electricity use can be difficult to determine in new construction projects. Builders use an estimate for each property that is based on how much floor space and the climate zone in which it is located.

But, there is flexibility when it comes to sizing up the solar-powered system. For one, builders can decrease the size requirement of a solar-powered system on the property by incorporating solar panel installations with a battery (like the Tesla Power wall, or the LG CHEM RESU10H). Also, by incorporating energy efficiency measures of another demand-responsive measure into building design along with battery storage, the required solar-powered system sizes can be downsized by 40 percent.

The Cost of Solar Energy and Savings in California’s Solar Power Mandate

The California Clean Energy Commission did a cost-effective study to determine the cost of solar energy and the savings for Californians that are purchasing a single-family home under these new building codes. They found that with the new requirements for solar panels, the cost of a single-family is going to increase by $8,400, which is going to be around $40 extra in monthly utility payments.

However, the CEC is also predicting that the upfront costs of new energy are going to increase, and the benefits of solar energy savings for new homeowners will far outweigh the initial cost of solar energy. Assuming that the average electricity rate of approximately 18 cents per kilowatt-hour (kWh), the state estimates that single-family homeowners will save around $80 per month in electricity costs (thanks to solar electricity).

The monthly electrical bill savings, combined with paying an extra $40 each month in mortgage payments for the solar-powered system, means that the new homeowners are going to come out with the $40 net savings per month. Annually, this comes out to $500 per year in savings. If electricity prices continue to rise and the cost of solar energy continues to fall, the savings are only going to increase.

The Numbers of California Solar Power Mandate

- Upfront costs to new single-family homes after the solar power mandate: $8,400.

- Cost equivalent in mortgage payments: $40 per month.

- Electricity bill savings: $80 per month.

- Net Savings: $40 per month, $500 per year.

California's Solar Mandate: What to Expect! 

There are a few kinds of new residential construction that are exempt from the code. In certain cases, some properties are going to be exempt from the solar energy mandate. The rooftops with small spaces or the ones that are going to receive an abundance of shade will be exempt from installing a solar-powered system. The building developers are welcome to pursue and/or build community solar energy projects, as opposed to rooftop solar-powered systems for each property (as long as they receive both approvals from both the California Clean Energy Commission (CEC) and the local utility company). Any community solar energy project, offered instead of on-site solar energy, needs to offer benefits similar to the benefits to the new homeowner that a rooftop or ground mount solar panels that are located on their properties.

More Exemptions to the Solar Mandate in California 

With the solar panel installation mandate approaching, many people are wondering if there will be any exemptions. The answer is yes. California Governor Gavin Newsom signed a bill, that exempts certain homeowners from the rule. The new bill states, if homeowners are rebuilding in an area where the governor has declared a state of emergency, they will be exempt from the solar power mandate. This exemption will end in 2023.

Will the Other States Follow?

California has always been considered a national leader when It comes to, not only solar panel installation but in adopting bills that other states have yet to give a chance. Thus far Massachusetts has proposed a solar energy mandate bill following in California’s footsteps and it is expected that other states will follow.

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