California Becomes First State to Require Solar Panels on New Homes

Houses with solar panels like this Los Angeles-area home will be the norm in California starting in 2020. divanov/Shutterstock

California continues to forge a solar future for itself. The latest is the approval of rules that require new houses and low-rise apartment buildings to have some form of solar power.

While some cities in the state already have this requirement (and other states have considered such legislation,) the Golden State becomes the first in the United States to codify solar requirements in its building code. The California Energy Commission approved the changes to the building code on May 9

The requirements will apply to any building permits issued after Jan. 1, 2020.

A solar panel on every roof

The new requirements are in step with other laws on the books regarding energy consumption in California.

For instance, by 2030, 50 percent of the state's energy electricity must come from noncarbon-producing sources, and solar has been one of the primary sources California has invested in to achieve that goal. Additionally, the goal is expected to further boost the state's solar industry, which is already getting plenty of attention.

"This is a very large market expansion for solar," Lynn Jurich, co-founder and co-chief executive of Sunrun, a leading solar installation company, told The New York Times. "It's very cost effective to do it this way, and customers want it."

"There's also this real American sense of freedom of producing electricity on my rooftop," she added. "And it's another example of California leading the way."

Solar panels in a California desert
California plans to have 50 percent of its electricity generated by alternative energy sources by 2030. Bureau of Land Management/flickr

It's not only an issue of producing the electricity, of course. Residents also have to be able to use it. The new rules encourage builders to install home batteries as well, giving residents the option of using the energy directly instead of funneling it to the grid. Having a battery will also help residents save on their utilities under the new rate structure, which rolls out next year and charges customers based on the time of day they use electricity. Having it stored in a battery will help residents avoid higher costs during prime usage times.

Pierre Delforge, senior scientist for the Natural Resources Defense Council (NRDC) called the new rules "groundbreaking" in a statement and and that they will help Californians save money and reduce their carbon footprint

The new rules will "save Californians more than $1.7 billion in net energy savings over the next 30 years and reduce carbon pollution statewide by 1.4 million metric tons," Delforge wrote. "This is equivalent to the emissions from the annual electricity use of all households in the city of San Francisco.".

The new regulations also require other energy-efficiency measures, including insulation and better windows.

Too much green to be green?

Of course, those savings won't be immediately apparent to new home buyers.

The commission acknowledged that the solar panel installation will result in an increased cost in home prices, with estimates ranging anywhere from $8,000 to $12,000 in additional cost, according to The Times. C.R. Herro, vice president of environmental affairs for Meritage Homes, told Consumer Affairs he estimates the new energy standards could add between $25,000 and $30,000 to construction costs.

Increasing housing costs are a legitimate concern in the state. Four of the nation's five most expensive housing markets in the fourth quarter of 2017 were in California, according to the National Association of Realtors. San Jose topped the list, with the median cost of an existing family home at $1.27 million. The lowest of the four, San Diego-Carlsbad, was $610,000.

Two workers install solar panels on home in Oak View, Southern California
Installing solar panels on new homes could increase the cost of homes by $10,000, if not more. Joseph Sohm/Shutterstock

"The state's housing crisis is real," State Assemblyman Brian Dahle told USA Today. "California's affordability problem is making it more and more difficult for people to afford to live here."

The commission and the construction industry, which is generally positive on the new rules, say the increased costs will be offset by the energy savings residents see over the course of the home's lifetime.

The Energy Commission estimates the new standards will add about $40 to an average monthly payment on a 30-year mortgage but will also save consumers $80 on monthly heating, cooling and lighting bills, per The Times.

Additionally, the NRDC argues that the new rules will still help low-income residents. They spend twice as much on energy per dollar of income than the statewide average, the NRDC says, and these efficiency improvements will "provide relief" from expensive energy bills.