Explainer: New California Mandate Boosts Energy-Efficient Buildings, Rooftop Solar
Not long after California mandated rooftop solar for all new homes under three stories as of 2020, Greentech Media was out with a detailed explainer that lays out the costs and benefits of the plan and the questions it’s raising as the state moves toward implementation.
“While the core elements of the new standards are now effectively locked in, the work that’s required to roll them out is only just beginning,” notes Senior Editor Julia Pyper. “Homebuilders, solar companies, efficiency experts, local governments, analysts, and consumers are digging further into how the rules are structured to come up with compliance plans,” and “there’s a lot for stakeholders to grapple with.”
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Overall, the new standards “do enable some pretty groundbreaking developments in the advancement of clean energy,” she writes. “Besides the requirement that all new homes under three stories install solar panels—a first for the nation—the codes help to incentivize energy storage and include a host of energy efficiency upgrades that will collectively slash energy use in new homes by more than 50%.”
Among the points Pyper covers in an in-depth, 12-point review:
- With building energy efficiency standards improving the overall performance of new homes, photovoltaic solar systems installed under the new mandate will be sized at 2.7 to 5.7 kilowatts, depending on climate zone, compared to an average of 6.8 kW for panels installed on existing homes as retrofits.
“The smaller size of these systems plays a big role in determining the expected costs and grid impacts of the new codes,” Pyper notes. The standards also support “demand-responsive technologies” like storage batteries and heat pump water heaters “and improve the building’s thermal envelope through high-performance attics, walls, and windows to improve comfort and energy savings.”
- An analysis conducted for the California Energy Commission (CEC) suggests the new standard will apply to 74,154 single-family homes in the first year. Based on that result, GTM Research foresees 14% growth in residential solar sales between 2020 and 2023, adding 650 megawatts of new capacity to GTM’s base-case scenario for the state. “However, the solar market impact could be much greater,” Pyper writes, since the analysis excludes multi-family dwellings that will also be subject to the new standard.
- The new building standard was required to show savings to homeowners over the course of a 30-year mortgage. CEC analysis across California’s 16 climate zones showed benefit-to-cost ratios of 1.7:1 to 2.3:1. Energy efficiency requirements in the new code will add US$9,500 to the cost of a new home, but reduce energy and maintenance costs by $19,000 over three decades.
“Based on a 30-year mortgage, the Energy Commission estimates that the standards will add about $40 per month for the average home, but save consumers $80 per month on heating, cooling, and lighting bills,” the CEC states in an FAQ. Adam Browning of Vote Solar calculates the cost of a three-kilowatt system at about half of the Commission’s estimate.
- A key question is whether the solar mandate will produce savings or costs for utilities, and whether customers without solar panels will end up paying more as a result.
“The CEC is saying this will save homeowners money, and it very well might. Because of net metering and the very high cost of electricity in California, homeowners are avoiding very high electricity prices,” said Haas School of Business professor Severin Borenstein. “The problem is the utility is not saving that much money.”
Pyper documents an intense, ongoing disagreement on whether utility-scale solar would be more beneficial to the state than rooftop.