California mandates solar panels on new homes starting in 2020

This is disruptive innovation in several ways.

1) Plentiful new solar PV on residential roofs means utilities must change to deal with it. The traditional model was power flows one way, downstream from big generating plants to users. That is no longer true. Power flows upstream now too. This means utilities have to do things differently. A big question is, who pays for the system upgrades?

This is not a trivial question. One a sunny summer day in California, solar PV production soars and goes into the grid where the utilities have to do something with it immediately, because the grid must always be in balance between supply and demand.

2) New homes with solar PV will cost more, however utility bills will be less. Thus the homes will be sought after, even if they cost $10,000 more. In a place like L.A. or S.F. that’s an inconsequential amount of the total price of a new house.

3) Most of these homes will have battery storage. This will increase demand for batteries, which will spur more R&D, and the price of batteries will keep dropping.

4) Solar PV is already the cheapest form of power and prices continue to drop. Battery prices are falling too. Merging the two together is the future. This also applies to wind farms storing excess generation in batteries.

The code includes incentives for energy storage while mandating that the construction of new homes include advanced energy efficiency measures and rooftop solar. The mandate could require between 68 and 241 MW of annual distributed solar buildout, according to ClearView Energy Partners’ research using 2017 data. All told, the new code is meant to save Californians a net $1.7 billion on energy bills, while advancing the state’s efforts to build-out renewable energy, the commission said

On Wednesday, the Golden State became the first in the U.S. to require solar panels on almost all new homes. Most new units built after Jan. 1, 2020, will be required to include solar systems as part of the standards adopted by the California Energy Commission. While that’s a boost for the solar industry, critics warned that it will also drive up the cost of buying a house by almost $10,000. Solar shares surged on the decision. Homebuilders fell.

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