Federal research says California solar mandate could increase housing prices

Published on May 15, 2018 by Dave Kovaleski

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The State of California is mandating that most new homes have solar panels installed during construction, which will help it meet its renewable energy and greenhouse gas reduction goals.

The new mandate, put forth by the California Energy Commission, requires new homes built after Jan. 1, 2020, to include solar systems. It applies to single-family houses and multifamily units that are three stories or under. Some homes that are shaded by trees or taller buildings, or have roofs that are too small for panels, would be eligible for exceptions. Builders can make individual homes available with solar panels or build a shared solar-power system serving a group of homes. The rooftop panels can either be owned outright, made available by lease, or rolled into the home price.

This effort will help California meet its goal of having at least 50 percent of the state’s electricity to come from renewable sources by 2030. California also has the goal to reduce its greenhouse gas emissions by 40 percent from 1990 levels by 2030.

At the end of 2017, 16 percent of California’s energy came from solar panels.

However, an analysis by the federal Institute for Energy Research (IER), said this mandate could increase home prices by more than expected.

The California Energy Commission estimates that the new standards will add about $40 to an average monthly payment based on a 30-year mortgage. The IER analysis says this could be even higher in places like San Diego, where the median home price in the San Diego, for example, was $550,000.

Also, in January, President Donald Trump imposed tariffs of up to 30 percent on solar panels made abroad. About 80 percent of the solar industry relies on parts made abroad.