In May, the California Energy Commission unanimously approved the nation’s first commitment to putting solar on qualifying new home construction starting in 2020 – a move that’ll be good for our cost-of-living and our climate alike.
Building solar on new homes is consistent with California’s zero net energy goals for new buildings, and it’s a great way of getting rooftop solar built cheaply for customers. When solar PV is installed at the time of construction, you get economies of scale and save big on non-hardware costs like customer acquisition, permitting and financing.
Assuming modules are 40 cents/W and the other system components and equipment costs are 85 cents, and accounting for a 10% profit margin for the builder, a 3 kW system would cost about $4200. If you consider that cost under a 30-year mortgage at a 3.92 percent interest rate, the incremental monthly mortgage cost is about $20. Keeping in mind that solar equipment only accounts for about a quarter to a third of total solar panel system costs, these figures match with the costs estimated by the state.
Under the current net metering tariff and Time-Of-Use (TOU) B rate, a TOU residential customer in the Central Valley would save $85 a month on their electricity bill from that solar array, resulting in a net savings of $65 a month – an undeniable financial benefit for future homeowners.
While some have argued that the mandate will increase housing prices and do little to curb emissions, estimates from the California Energy Commision prove otherwise. Not only will the savings in energy cover increased housing costs, but it is estimated that the mandate will reduce GHG emissions by 700,000 metrics tons over three years, equal to taking 115,000 cars off the road.
May’s historic measure was years in the making and involved a broad and thorough stakeholder process to ensure that California gets this right. California has a track record of setting bold precedents on clean energy, and it’s safe to say that forward-looking states are eyeing this mandate as the next benchmark of what’s possible.