Understanding the California Solar Panel Law: California Solar Mandate 2025

California continues to lead in solar energy with over 49,777 MW of installed solar capacity, powering 14.6 million homes. The California solar mandate, part of the state’s solar requirements for new homes, ensures all new residential builds include solar solar panels in the Golden State. Also, the California Smart Grid Law aims to modernize the grid, enhancing solar energy distribution and supporting the shift from fossil fuels to renewables. Cities like San Diego, Los Angeles, Riverside, and San Jose have thriving solar energy markets thanks in part to the California solar mandate.

Because California has many building codes regarding solar energy, PV contractors need to be aware of these when conducting business there. Understanding how these California solar panel laws impact energy codes is critical for advising clients. GreenLancer, a trusted name in solar design and engineering since 2013, helps PV contractors tackle California's complex solar energy requirements.

What Is The California Solar Mandate?

Enacted in 2018, the California Solar Mandate requires new single-family homes and multi-family dwellings up to three stories to include solar panel installations. This groundbreaking solar requirement for new homes became effective on January 1, 2020, as part of California’s building codes and was developed by the California Energy Commission (CEC).

Under this California mandate, solar power systems must generate enough electricity to meet the property’s annual energy needs. Since these homes are new construction, builders estimate energy requirements based on factors like square footage and climate zone.

Does the California Solar Panel Law Require Batteries?

While the California Solar Mandate doesn't require solar batteries, adding a battery storage system like the Tesla Powerwall or Enphase IQ battery can reduce the size of your solar system by as much as 25%. Plus, combining energy efficiency upgrades and demand-response strategies could cut your solar system size by 40% or more, giving you more flexibility in meeting California's solar requirements for new homes.

What is the California Solar Mandate for Commercial Properties?

The California solar panel law does not mandate having solar batteries. However, adding battery storage systems like the Tesla Powerwall 3 or Enphase IQ battery can decrease the required size of the solar system by up to 25%. Also, incorporating energy efficiency measures and demand-response strategies can further reduce the solar system size by 40% or more, offering greater flexibility in meeting the California solar requirements for new homes.

The residential and commercial California Solar 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 California solar panel law 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, effective in 2020, requires solar panel installations on new single-family homes and multi-family residences up to three stories. Existing homes are generally exempt unless undergoing significant renovations. Additionally, new constructions must include wiring to facilitate future transitions from gas to electric appliances and be "solar-ready" for easy integration of solar storage systems.

As of January 2023, the mandate expanded to encompass high-rise residential buildings and certain commercial structures, further advancing California's commitment to renewable energy.

Current Home

Incorporating solar energy storage or other energy-efficient measures can reduce the required capacity of the solar panel system. Homeowners who add solar storage may qualify for rebates through the Self-Generation Incentive Program (SGIP). The California Public Utilities Commission (CPUC) has authorized annual collections of $166 million from 2020 through 2024 to fund SGIP, providing substantial financial support for adopting solar battery systems.

Disadvantages of the California Solar Panel Law for New Homes

The California Solar Mandate has faced criticism for potentially increasing new home prices due to the upfront costs of solar panel installations. Critics argue that this could make homeownership less affordable for some Californians.

Solar Technologies

The CEC estimates that the mandate adds approximately $9,500 to the cost of a new home, which translates to an increase of about $40 in monthly mortgage payments.

New Home Source

However, the CEC also projects that homeowners will save around $80 per month on energy bills, effectively offsetting the higher mortgage payments. It's important to note that recent changes to California's net energy metering policy, known as NEM 3.0, have reduced compensation rates for excess solar energy supplied to the grid by about 75%. This reduction may impact the overall financial benefits of residential solar installations, potentially affecting the anticipated savings on electricity bills for new homeowners.

Commercial California Solar Panel Clients

California regulators have updated the Build Energy Efficiency Standard, which impacts commercial properties. Under the California Solar Mandate, 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 2025

The California Energy Commission has approved using the Solar Assessment Tools to comply 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 from incorporating 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.

  
  

FAQs About the California Solar Mandate 2025

The California solar panel law has sparked many questions from homeowners, contractors, homebuyers, and solar installers. As the California Solar Mandate continues to shape the construction of new homes, it’s crucial to understand the implications for home energy design, installation processes, and compliance with the latest solar requirements.

Are There California Solar Mandate Exemptions?

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. The property must lack one basic utility or amenity for year-long occupancy to qualify for an exemption. 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 For 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 have solar energy systems, including single-family houses and multi-family buildings up to three stories. Still, some exceptions exist for the California solar requirement for new homes for vacation properties, houses with small roofs, and shaded properties.

What is the California Solar Panel Law?

The California Solar Mandate, sometimes called the California solar panel law, requires all new residential buildings up to three stories and new commercial properties to install solar photovoltaic systems. This law aims to promote renewable energy, reduce greenhouse gas emissions, and increase energy independence by ensuring new constructions harness California's abundant solar resources.

What if a Home Doesn’t Comply with the California Solar Panel Law?

Not meeting the California Solar Mandate for new homes can result in significant delays. Homes may encounter difficulties securing building permits, and local authorities may withhold final occupancy approval until the solar energy requirements are fulfilled. Since exemptions under the California Solar Mandate apply only in specific situations, most homes will need to install solar energy systems to pass inspection and be legally habitable.

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, solar systems are exempt from property taxes. This means that installing solar panels will not increase property taxes despite boosting property value.

Do Other States Have Similar Solar Panel Mandates?

As of 2025, California remains the only state with a mandate requiring solar installations on new residential buildings. In 2018, California mandated that new single-family homes and multi-family dwellings up to three stories high install solar panels.

While other states have considered similar measures, none have implemented such mandates to date. Advocacy groups like Environment America have called for similar requirements in states including Colorado, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Pennsylvania, and Texas.

Do All New Homes in California Need Solar Panels?

Under the California solar requirement for new homes, most newly built homes and apartment complexes must have solar panels, as mandated by the California Solar Mandate. This policy aims to promote renewable energy use. However, there are California Solar Mandate exemptions for homes that face conditions unsuitable for solar power generation, such as excessive shading or limited roof space. These exemptions ensure that solar installations remain practical and feasible for each property.

How Many Homes in California Have Solar Panels?

California has the largest solar power capacity in the U.S., with over 43,240 megawatts installed. This is enough to power nearly 12.7 million homes. As of 2023, solar energy accounts for about 28% of the state’s electricity generation. The California Solar Mandate for new homes has significantly contributed to this growth, further cementing California as a leader in renewable energy.

How Does the California Solar Mandate Affect Homebuilders?

The California Solar Mandate requires homebuilders to incorporate solar panels into new residential construction, significantly impacting design and construction planning. Builders must allocate space for solar energy systems, meet specific solar-ready requirements, and ensure that the electrical infrastructure supports solar installations.

This mandate can increase upfront construction costs, but it also offers long-term benefits by boosting the energy efficiency of new homes. California homebuilders need to stay informed about the latest regulations to avoid delays in obtaining permits and ensure compliance with solar requirements.

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, 2026.

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.

The exclusion prevents the addition of a solar energy system from being assessed as new construction, thereby maintaining the property's base year value for tax purposes. This means that homeowners and property owners can install solar panels without the concern of increased property taxes due to the solar installation.

However, the exclusion is scheduled to sunset on January 1, 2027. Therefore, any active solar energy systems installed before this date will continue to benefit from the exclusion. After this date, the exclusion may no longer apply unless further legislative action is taken to extend it.

Solar Permitting in California

California leads the nation in streamlined solar panel permitting efforts, revolutionizing the approval process for PV projects. Through initiatives like the Solar Permitting Efficiency Act (AB 2188), California has standardized procedures, reduced administrative hurdles, and expedited reviews. These efforts promote the widespread adoption of solar energy and serve as a model for other states striving to accelerate renewable energy deployment. 

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.

Sign Up for Free

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, which can help implement the California Solar Mandate.

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 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.