Great for the environment but who will take on the up-front costs?

The California Energy Commission revised the Energy Code to make solar panels mandatory on new homes starting Jan 1st, 2020. This is the first time in U.S. history that a state has enforced a solar energy policy of this scope. In some cases, exemptions will granted when solar panels are ineffective, like in heavily shaded areas. This is a long-term move for California solar and some question the validity of such high up-front costs. Regardless, the mandate is in place and this initiative is in motion.

What Does it Mean?

California has a dream to be energy self-sufficient. Unlike other states that have opted to create massive solar fields, California’s plan is to integrate solar energy into the construction process of new homes, effectively empowering residents to easily reduce their carbon footprint.

Benefit of California Solar

A survey conducted in 2016 shows California solar generation was 19,783 GWh and accounted for just under 10 percent of the state’s total energy generation; that number is set to increase drastically over the next decade. The construction sector has been selected to undergo a green-energy transformation because it’s one of the largest producers of pollution for the state of California. The environmental benefit for the state will be substantial and set an example for other states that are waiting to see how the solar mandate plays out.

This biggest hurdle will be cost.

Housing Issue

Affordable Housing Shortage

A concern for the California solar mandate is that it will add cost to an already high-priced item—a home in California. Millions of California home buyers struggle to afford homes and even more feel the burden of expensive rent. The cost to rent a place in California continues to rise and this new mandate has some residents wondering if the new solar energy initiative will further exacerbate the pricing issue.

“If I struggle to pay for rent now, what will happen with a $10,000 solar panel installation? The cost will probably go to me,” a California resident noted with concern.

Increased Construction Costs

The energy commission is aware that average construction cost will increase by almost $10,000 but over time, the savings in energy will nearly double the upfront fee. When applied to the state’s greater population, savings will be hundreds of millions. Even so, some economists believe energy prices will inflate, making the California solar mandate null. A shift in solar energy price does have the potential to stifle the impact of widespread solar use so this is a salient factor for the commission to monitor.

Solar Companies

The move will be a good opportunity for Tesla: remember the Powerwall? Well, California’s new mandate will provide energy credits for residents who own and use one. Residents will also be able to charge the home battery at times of the day when energy is at a lower cost and power their homes at times when power is more costly.  Other solar companies have also seen an increase on stock value as the California solar mandate will most likely help elevate the solar American solar industry as a whole.