California Will Require Solar Power in New Residential Constructions
31st May 18
Cameron Quin

When compared with the rest of the USA, California is the undisputed solar power leader. Although the solar industry has also seen significant growth in other states, such as New York and New Jersey, California accounts for nearly half the installed capacity in the USA. This has been driven by an ambitious renewable energy policy, mandating that power retailers obtain 50% of their energy from renewable sources by 2030.

On May 2018, the California Energy Commission voted to make solar power mandatory in all new residential buildings starting from 2020. This resolution can drive even faster growth in the solar industry, and represents an excellent market opportunity for Tesla solar roofs, which combine the roof shingles and photovoltaic modules into a single construction element.

How Are Housing Prices Affected?

A solar PV system typically adds over US$ 10,000 to the cost of a new home in California, so there are concerns that the new law could drive up housing costs. However, it is important to note that a solar power system reduces electricity costs, and California has some of the highest tariffs in the USA – comparable to Australian tariffs in some cities. Therefore, the cost of a solar power system is recovered many times during the service life of the installation.

Another important consideration is that most homeowners don’t pay for their property in cash, but instead they take a mortgage. The California Energy Commission have estimated that every dollar added to monthly mortgage payments due to solar power results in $2 saved per month. In other words, the installation can pay for its own cost with only half of the savings achieved, while the other half stays in the user’s pocket from the first month of operation.

Complementary Systems: Battery Arrays and Heat Pumps

Batteries and heat pumps can both enhance the benefits of a solar photovoltaic system. The market share for both technologies can be expected to increase in California as new residential properties with photovoltaic arrays are built.

 

  • Batteries can store the output of solar panels, to be used when it provides the most value. For clients with time-of-use electricity rates, it makes sense to use stored energy when kilowatt-hour prices are at their highest point in the day. Any battery capacity not charged with solar panels can be filled from the grid when kWh prices are at their lowest.
  • Heat pumps can provide space heating and domestic hot water for roughly the same cost as natural gas heaters, but without the emissions. An alternative to battery storage is using surplus solar power to drive a heat pump, and storing hot water in a properly insulated tank.

 

Of course, energy efficiency measures are also a great complement for solar power: in addition to producing your own electricity, you can ensure your appliance use it as little as possible. California plans to introduce new incentives for both energy storage and energy efficiency along with its new solar power legislation.

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Cameron Quin

31st May 18
Cameron Quin

Cameron Quin has been heavily involved in business development from an early age. After founding and selling two online companies, Cameron found a strong passion for renewables and the opportunities it brings for the commercial and industrial sector. Sharing the possibilities of solar and the knowledge from the Solar Bay team is his favourite pastime.