AtlasTrend’s investment team look at California’s recent solar mandate, and what their historic plan means for investors.
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California has positioned itself as clean energy leader of the United States – pushing for more electric vehicles on the roads, and fewer emissions from commercial and residential buildings.
On 9 May 2018, the Californian solar industry was given a large boost when the state’s Energy Commission unanimously approved a plan requiring solar panels to be installed in most new homes from 2020.
Robert Raymer, technical director for the California Building Industry Association stated:
“adoption of these standards represents a quantum leap in state-wide building standards…every one of the other 49 states will be watching closely to see what happens”.
The Californian Energy Commission estimates solar panels would boost construction costs for a single-family home by roughly US$10,000, with accompanying energy-saving regulations on insulation, windows, lighting and appliances adding an additional US$10,000 to US$15,000.
But consumers would get that money back plus more in energy savings over time, according to the commission.
Some Republican legislative leaders argued Californian’s couldn’t afford to pay any more for housing given the state’s already unstable residential market.
However, representatives from public utilities, construction groups and solar manufacturers all spoke in support of the plan, which they’ve helped the Commission develop for years.
Approximately 117,000 new single-family homes and 48,000 multi-family units will be built in 2020, the Commission estimates.
Allowing community-shared solar generation and installing storage batteries will also be available options for home owners. In addition, solar storage systems are being introduced to other parts of the community.
Sharp is installing its solar storage packs in California’s Santa Rita Union School District. The systems will provide up to seven hours of power at each school during a grid outage and are expected lower their utility bills.
The requirement would only apply to newly constructed homes, although many existing homeowners are choosing to install solar panels with the help of rebate programs.
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