California leads the way in solar energy installations with over 41 MW of installed capacity, enough to power 11.5 million homes. The state is serious about transitioning to renewable energy to phase out fossil fuel consumption and reduce carbon emissions. Several top cities for solar energy production in California include San Diego, Los Angeles, Riverside, and San Jose. The Golden State has numerous laws enabling unprecedented growth in the solar energy industry, such as the California solar mandate, also known as the California solar panel law.
Because California has many building codes regarding solar energy, PV contractors need to be aware of these when conducting business there. Understanding how these laws impact energy codes is critical for advising clients.
What Is The California Solar Mandate?
In 2018, California mandated that new single-family homes and multi-family dwellings up to three stories high install solar panels. This California solar panel law took effect on January 1, 2020, and is part of California’s building codes. The California Energy Commission (CEC) created the mandate, which is the first of its kind in the United States.
Solar power systems on new construction projects must be able to generate all of the electricity on an annual basis. Because these properties haven’t been inhabited in the past, builders estimate the electricity needs of the home based on the climate zone and square footage.
Does the California Solar Mandate Require Batteries?
Solar batteries are optional under the California Solar Mandate. However, if the solar system includes a battery storage system, such as the Tesla Powerwall or Enphase IQ battery, it can reduce the size requirement of the solar system by up to 25%. In addition, incorporating other energy-efficiency initiatives and demand-response measures reduces the size of the solar power system by 40% or more.
What is the California Solar Mandate for Commercial Properties?
The CEC approved a change to the California Energy Code requiring many new commercial buildings to have solar panels and battery storage, effective in 2023. The commercial buildings included in this change include high-rise residential projects, hotels, offices, medical offices, health clinics, retailers, grocery stores, restaurants, schools, and civic spaces.
The residential and commercial mandates are increasing demand for rooftop solar and battery installations throughout California, creating excellent opportunities for solar contractors.
What is the Impact of the California Solar Mandate?
The solar mandate affects solar installers and PV contractors. If conducting business in California, it is critical to understand its impact on your customers.
Residential California Solar Panel Clients
The California Solar Mandate went into effect in 2020 for residential PV clients in single-family homes and multi-family housing three stories or less. Although residential new construction projects must have solar panels, existing homes are not usually required unless they undergo extensive updates. New homes are required to have wiring that enables an easy transition from gas appliances and heating to all-electric and to be “solar-ready” to add solar storage capacity easily.
In addition, the mandate for high-rise residential projects took effect at the beginning of 2023.
Adding solar energy storage or other energy-efficiency measures to the home can reduce the total required capacity of the solar panel system. If your clients add solar storage capacity, they may qualify for rebates through the Self-Generation Incentive Program (SGIP). The California Public Utilities Commission (CPUC) has already authorized over $1 billion in funding through 2024 for this popular solar battery incentive program.
Disadvantages of the California Solar Panel Mandate for New Homes
Opponents have criticized that the solar mandate increases new home prices for Californians because of the upfront cost of solar panels, making home ownership unaffordable to some. However, projections from the CEC indicate otherwise because of the reduction in energy bills with PG&E, SCE, or the local electric utilities.
Despite increasing the cost of a new home, the CEC anticipates the California Solar Mandate to save money. According to its estimates, the mandate increases the cost of a new home by roughly $8,400, which adds about $40 a month to a mortgage payment depending on the mortgage product, rate, and other factors. Yet, the CEC estimated that solar PV systems would reduce energy bills by an estimated $80 a month. However, recent changes to California’s net energy metering reduce electricity bill savings for residential customers under NEM 3.0.
Commercial California Solar Panel Clients
California regulators have updated the Build Energy Efficiency Standard, which impacts commercial properties. Numerous new commercial projects, including retailers, offices, schools, apartment complexes, and medical facilities, are required to install solar systems with battery storage.
The CEC estimates this will add 280 MW of solar energy capacity annually, which creates a lot of work for solar contractors. In addition, the mandate will also add an estimated 480 MWh of battery capacity to commercial properties.
California is promoting the installation of storage batteries partly to reduce the impacts of public safety power shutoffs where utility companies shut off the electricity to help prevent wildfires.
Tools For The California Solar Mandate in 2023
The California Energy Commission has approved the use of the Solar Assessment Tools for compliance with the California solar mandate. These tools include:
The Solar Photovoltaic (PV) Calculator assesses a building's energy characteristics and estimates the number of photovoltaic modules needed.
The California Solar Shade Analysis evaluates available solar access to a development site and estimates energy savings due to the incorporation of shading structures or vegetation.
The California Utility Allowance Calculator (CUAC) calculates utility allowances for low-income housing projects based on the design of the photovoltaic system, the proposed building's energy features, and any relevant utility rates or tariffs.
Are There Exceptions to the California Solar Mandate?
Some California homes with small roofs or a lot of shading may also be exempt from installing a rooftop solar array. Also, some seasonal properties are exempt from the solar mandate. To qualify for an exemption, the property must lack one basic utility or amenity for year-long occupancy. In addition, multi-unit buildings in areas without virtual net energy metering are exempt from the California Solar Mandate.
One way to satisfy the mandate requirements for new homes is for residents to subscribe to a community solar farm instead of installing rooftop solar systems.
Are Solar Panels Required On New Homes In California?
The California Energy Code requires solar panels on new homes as of 2020. The California Solar Mandate states that most new residential buildings, including single-family houses and multi-family buildings up to three stories, have solar energy systems, but there are some exceptions for vacation homes, houses with small roofs, and shaded properties.
What is the California Solar Panel Law?
The California Solar Mandate, sometimes referred to as the California solar panel law requires solar systems on new homes and commercial properties. The goal is to promote the use of renewable energy generation in California.
Are There Tax Benefits To The California Solar Mandate?
California solar incentives, including the federal tax credit for residential and commercial projects, can significantly reduce the total cost of a solar PV system. Commercial projects can also qualify for accelerated depreciation or bonus deprecation.
Also, per section 73 of California’s revenue and taxation code, there is a property tax exclusion for solar systems. This means that installing solar panels won’t cause an increase in property taxes despite boosting the property value.
Do Other States Have Similar Solar Panel Mandates?
Currently, California is the only state requiring solar systems on new construction projects, and it leads the way in clean energy development to mitigate climate change. However, California’s mandate could encourage other states to follow, especially as concern about climate change and greenhouse gas emissions increases.
Solar advocates are encouraging such mandates for new homes in Nevada, Colorado, New Mexico, Texas, Minnesota, Michigan, North Carolina, Maryland, Pennsylvania and Massachusetts. The new housing market is particularly strong in Texas, North Carolina, and Colorado, which could result in many new rooftop solar installations if a mandate is implemented.
Do All New Homes in California Need Solar Panels?
Many new houses and apartment complexes in California need solar panels, promoting renewable energy use. However, there are exceptions to the California Solar Mandate for homes with issues generating solar power, such as excessive shading or a small roof.
How Many Homes in California Have Solar Panels?
There are 43,240 megawatts of solar power capacity in California, which is enough to power almost 12.7 million homes. California has the most installed solar energy capacity in the US and generates 27.8% of its power from solar panels.
Do Solar Panels Increase Property Taxes in California?
Section 73 of the California Revenue and Taxation Code creates a property tax exclusion that prevents the solar power system from impacting the amount charged on property taxes for properties with solar panels. Thus, the solar energy system doesn’t increase the property value used for tax purposes for residential, commercial, and industrial California solar panel systems installed between January 1, 1999, and December 31, 2024.
What are the California Solar Ready Requirements in the Solar Panel Mandate?
Under the California solar mandate, newly constructed low-rise residential buildings are subject to certain solar-ready requirements outlined in the Building Energy Efficiency Standards. One key requirement involves the solar zone minimum area, which stipulates that single-family residential buildings must have a designated area for solar installation.
However, there is an exception for buildings with three or more stories and a total floor area of 2,000 square feet or less, where a reduced solar zone area of at least 150 square feet is allowed. For specific and comprehensive information on these requirements, it is important to refer to the official guidelines provided by the California Energy Commission.
Solar Permitting in California
Despite the California Solar Mandate, permitting solar projects can be challenging in California and beyond due to building and electrical code requirements. Unfortunately, many solar contractors encounter red tape when obtaining solar permits. GreenLancer was founded to accelerate the adoption of solar energy by offering solar permit services, such as PV plan sets, solar engineering stamps, and interconnection applications.
SolarAPP+
California is working to streamline the solar permitting process with Solar Automated Permit Processing or SolarAPP+. This new web-based solar permitting platform was created to streamline and automate the solar plan review and PV permitting process. It is currently up and running for single-family rooftop solar systems on existing homes in certain jurisdictions.
Authorities Having Jurisdiction (AHJs) in California that have fully adopted SolarAPP+ for PV permitting include Benecia, Dublin, Menifee, Modesto, Pleasant Hill, San Luis Obispo, Sacramento County, San Marcos, San Ramon, Simi Valley, Sonoma County, and Stockton. In addition, some AHJs are piloting the use of SolarAPP+, including Alameda, El Cajon, Kern County, and Palo Alto.
Contractors Can Benefit From The California Solar Panel Mandate
From San Diego to Los Angeles, Sacramento, and beyond, the California Solar Mandate is boosting demand for solar energy installations. Some solar contractors find it difficult to scale up operations while meeting high demand. The GreenLancer platform was developed to provide solar permitting services and engineering stamps to streamline the solar design and installation process.
Sign up for free today and shop GreenLancer’s marketplace of solar plan sets and PV engineering services.