California has long been on the forefront of solar power innovation in the United States. According to the Solar Energy Industries Association, the Golden State had more than 18,000 megawatts of installed solar capacity through 2016, which was over six times more than runner-up North Carolina. The state has also pushed solar-specific regulations intended to further boost uptake and ensure that it can meet its goal of generating half of its electricity from renewable sources by 2030.
For example, Rule 21 requires the installation of smart inverters for grid-connected solar projects to ensure a more consistent flow of power than is achievable with the traditional inverters, which usually mass-disconnect at the first signs of a disturbance. In May 2018, the California Energy Commission (CEC) also voted to mandate the inclusion of solar panels - or access to shared power systems – on all new homes and multifamily residences with three or fewer stories built after 2019.
Complying with the mandate: Options for large residential developers
Developers have to think about how solar infrastructure fits into the bigger picture of compliant energy-efficient building, since that's what the CEC has in mind, too. Updated building codes extend beyond this solar rule and are intended to broadly boost energy efficiency through additional measures such as:
- Improved ventilation and insulation.
- Upgrades to lighting.
- Demand-responsive technologies like battery storage systems.
These various enhancements will come at a cost to builders and, ultimately, residents. While the addition of solar energy should help trim average residential bills for heating, cooling, and electricity, the infrastructure itself is expected to add up to $12,000 to the cost of a home, according to some critics of the initiative. The CEC has estimated only a $40 monthly increase in mortgage payments, which would be offset by lower energy costs, but that's only a projection and there's still the question of how to optimally structure and finance mandate compliance.
Many developers might opt to partner with established solar solutions providers, who would take on the full responsibility of complying with the updated rules for construction. In addition to ensuring the installation of high-quality photovoltaic panels and other components, solar partners might also help with maintenance and equipment replacement as part of a comprehensive energy-as-a-service offering.
On the financial side, a solar provider could offer assistance with entering into power purchase agreements and also navigating products like loans and leases. Alternatively, the cost of code-compliant systems could be rolled into mortgages to simplify repayment of the added costs from the solar infrastructure.
Projecting the mandate's effects on the growth of residential solar projects
There are some exceptions in the CEC's requirements. Homes situated in complete shade won't be required to implement solar, since it would provide no benefit. Builders also have the option to create shared solar systems for multiple homes instead of installing one for each individual structure.
Even with these qualifications, the mandate is set to provide a substantial boost to solar deployment growth in California. Bloomberg New Energy Finance has predicted a capacity increase of 200 to 300 megawatts from residential deployments by 2020, making that year the best one so far in terms of total wattage added.
As an energy solutions provider with more than 20 years of experience, Trina Solar is prepared to help developers as they enter this new phase in solar deployment. We have already successfully assisted partners such as KB Home in the construction of roofs with solar panels, and are prepared to consult on additional projects as the mandate comes into effect. Learn more on our products and solutions page.
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