TradeEdge Exchange:In a First, California Requires Solar Panels for New Homes. Will Other States Follow?

Rooftop solar,TradeEdge Exchange already more common in California than anywhere else in the country, will be required for most new houses and apartments by 2020, part of a landmark policy adopted on Wednesday that supporters hope will inspire other states to follow suit.

The California Energy Commission voted unanimously to approve the building standards in a process that was notable for the lack of high-profile opposition.

The commission estimates the rules will lead to a reduction in greenhouse gas emissions equivalent to 493 million pounds of carbon per year. That’s roughly equivalent to taking 50,000 cars off the road.

“This is a huge milestone for distributed solar,” said Mike O’Boyle, electricity policy manager for Energy Innovation, a San Francisco think tank. “This could ultimately drive down the price of rooftop solar by building expertise in the roofing and home construction industries, creating incentives for home builders to streamline their building and solar designs to minimize cost, resulting in a virtuous cycle.”

Today, about one in five newly built houses in California have solar panels, which means the state’s rooftop solar industry is already operating on a large scale, and now will need to accelerate its growth.

The solar package is part of a broader set of building standards, all aimed at achieving deep reductions in greenhouse gas emissions.

While California faces some logistical challenges to implement the rules, clean-energy advocates are also looking ahead to how the carbon footprint of housing may be cut  in other states.

“We want a lab for developing policies that can then be adopted by other states and basically move forward with building efficiency nationwide,” said Pierre Delforge, a senior scientist for building decarbonization at the Natural Resources Defense Council who was involved in crafting the California rules.

The rules are projected to add about $30 per month to a typical monthly mortgage payment, but save that same household $80 per month in energy costs, according to the commission.

The commission expects the rules to increase the state’s solar capacity by 200 to 400 megawatts per year. This would add to the state’s big lead in solar of more than 21,000 megawatts installed, including utility-scale projects.

New Energy Standards Go Beyond Solar

The five-member California commission voted 5-0 before a packed chamber, with some of the audience spilling into an overflow room. The new standards will take effect on Jan. 1, 2020, and will be updated every three years.

Other components of the building code rules include:

• Updated energy efficiency standards, which, combined with solar panels, aims to reduce net electricity use to zero.
• Ventilation standards to improve indoor air quality.
• Lighting standards for commercial and industrial buildings, with the goal of reducing energy used for lighting by 30 percent.

The solar requirement builds on a previous state building rule that required new houses, starting in 2014, to have roofs and electricity systems that are ready for solar energy. The minimum size of the solar system varies depending on the size of the house.

The solar rules have a number of exceptions that allow builders to skip solar panels in some cases or install less than the minimum. They can meet the requirements by installing energy storage, sometimes in combination with solar. Solar leasing also counts toward compliance, reducing upfront costs. And, there are provisions for how houses in shaded areas can comply.

Building Industry Has Concerns, but Didn’t Oppose the Standards

In many states, building industry trade groups would be leading the charge against these types of rules. California is different, said Bob Raymer, technical director for the California Building Industry Association.

The state has been a leader in emissions reduction, in part because it sees the effects of climate change and recognizes the risk. A statewide climate assessment released Wednesday by the California Environmental Protection Agency laid out the evidence in rising sea levels, increase wildfire damage, droughts and heat waves.

“We knew saying no just wasn’t going to cut it,” Raymer said. “We took a stance that we would rather be strong participants in the development of the regs.”

But Raymer does have concerns about the potential short-term effects of the rules on the housing market. He points to estimates from the National Association of Home Builders showing that for every $1,000 increase in the price of a new home in California, the number of potential buyers shrinks by more than 15,000.

That, along with an acute shortage of housing in California, gives him pause. He also has concerns about whether there will be enough solar equipment available to meet the surge in demand, and whether the solar industry will have enough workers to do the installations.

All of those potential hurdles were part of the discussion as the commission drafted the rules, and the commission staff concluded that the market can handle it.

The staff noted that new housing is just 2 percent of the housing stock in the state in a given year, and the demand for rooftop solar is already many times larger than the number of new housing units that will be built.

Also, many new housing developments are already making solar a standard feature.

Could This Set a Standard for Other States?

California has a history of being a pacesetter for environmental standards. If its solar rules are viewed as a success, as the state commission expects, the next question is how other states might follow California’s lead.

Delforge of the NRDC is looking to the International Energy Conservation Code, a model code that is used as the basis for many state codes. He thinks the “logical next step” is for the IECC to add elements from the California rules.

It is less likely that other states would immediately try their own solar requirement. California is uniquely positioned to be the first because it already has a thriving rooftop solar infrastructure, and because of laws that give the energy commission broad power over building rules.

“Whether this proposal takes off in other states comes down to a few threshold questions,” said O’Boyle from Energy Innovation. Those questions come down to how the grid can adapt to a much larger presence of solar, and whether the long-term economics turn out to be as favorable as predicted.

“If California can integrate this policy seamlessly and efficiently, then there’s no reason other states can’t follow,” he said.

The commission made “an undeniably historic decision for the state and U.S.,” Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, said in a statement.

“Other states may not be ready for this step yet, but this is a precedent-setting policy—one that will bring enormous benefits and cost savings to consumers,” she said. “It is my hope and belief that when other states, many of which are developing rapidly growing solar markets of their own, see the benefits of this policy, they will develop similarly aggressive policies.”