California’s Solar Mandate for New Homes: What You Need to Know

As you may have heard, California recently became the first state to mandate solar PV systems on all new homes. This is a momentous decision for the industry; it brings the benefits of solar, a historically niche product, directly to a significant portion of homeowners. The policy will dramatically expand the size of California’s solar market–already the most mature in the nation–and perhaps it will eventually inspire similar action in other states.

For California solar companies that position themselves effectively, this could open up some great opportunities to serve a vast new sector. In today’s article, we detail what’s required under the new policy so you can make sense of what’s changing and assess the market opportunities.

What policy establishes California’s new home solar mandate?  
On May 9, 2018, the California Energy Commission (CEC) approved the 2019 Building Energy Efficiency Standards. What’s significant in this update to the Building Code is that, starting in 2020, every new home built in California will be required to have a PV system installed. (That is unless the building qualifies for an exception, of which there are a few). The policy got official approval from the California Building Standards Commission in December 2018.

What types of buildings are covered under California’s solar mandate for new homes?
The code states that the solar requirement applies to “all low-rise residential occupancies including single-family homes, duplexes, garden apartments, and other housing types with three or fewer habitable stories.” This includes multi-family housing like apartment buildings as long as they are under three stories. And for single-family homes, it doesn’t matter how tall the building is–all homes of that type must comply.

There are a few exceptions under which a home would not be required to have a PV system (such as including when there is limited unshaded roof space) or would be allowed to install a smaller system. Multistory buildings with limited roof space and homes that incorporate energy storage can qualify for a smaller PV system. Additionally, buildings that are permitted prior to January 1, 2020 will be exempted from the requirement.

What is required to comply?
One of the most important things to understand is the required size of the PV system under California’s solar mandate for new homes. The policy establishes a minimum PV system size for a home based on the building’s projected annual electrical usage.
Minimum PV system size is calculated based on the conditioned floor space (square feet) and the climate zone where the building is located. In order for a home to receive a building permit, the builder will need to demonstrate that it will have a solar system of at least that size.

Aside from requiring compliance with the minimum system size, the policy allows some freedom for solar contractors and builders to meet the requirements in different ways. For one, developers could choose to install a community solar installation for a group of homes instead of putting rooftop solar on each building. However, they would need to be able to demonstrate that it would offer equivalent benefit to residents as if they had solar on their own home.

Additionally, a variety of solar financing options are allowed. Systems could be owned by the homeowner (added into the cost of the home) or third-party owned. This means depending on what kinds of solar financing your solar company offers customers, the homeowner will have flexibility.

How do you determine the required PV system size?
The code includes two different paths for compliance, prescriptive and performance; either can be used to meet California’s solar mandate for new homes. The prescriptive approach utilizes a formula to specify the minimum PV system size. This method is simpler but less flexible.

The performance method (aka “computer compliance method”) is a little more complex but allows for greater flexibility. The CEC has created a free software program to allow contractors to model alternative PV sizes, based on different building characteristics like battery storage or demand response.

Next Steps
Some details of the policy, including more specific guidance for compliance, are still being developed by the CEC. For more information go the the California Energy Commission, https://www.energy.ca.gov/

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