Coming In 2020: Solar Panels for All New Homes

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That’s right, people – California is about to be the first state to require solar panels on all newly built single-family homes! The closet tree-hugger in me loves this initiative (I mean, we should probably do something to off-set all those cars on the 405, right?), but what does it mean for us in the real estate sector, and for those who are looking to navigate this already-completely-insane California housing market?

While the solar companies are surely popping bottles in celebration of all this new, mandatory business, there are some ramifications for the rest of us laymen – but don’t freak out, it’s nothing too crazy. Here are the main things to note:

More Jobs & Fewer Greenhouse Gas Emissions – Yay!

At the moment, only about a fifth of new houses in California come with solar panels, so upping that number to 100% will be a significant move. The new building rules are expected to create additional jobs in California’s solar industry, and – obviously – will be a step in the right direction for meeting our state’s goal of slashing annual emissions 40% below 1990 levels by 2030.

Higher Home Prices

Okay, so here’s the bad news: home prices are expected to rise by about $9,500, and in today’s market, that’s not something any buyer wants to hear. However, remember: this is only expected to pertain to homes built in or after 2020. If that $9,500 difference is going to make a huge impact on your budget as a home-buyer, then just consider that (like many) you may want to limit your house-hunt to homes that aren’t brand spankin’ new as of 2020. Many of us are currently living in perfectly good homes that were built in the ’90s, ’80s, even the ’60s.

Lower Monthly Utility Bills

As well they should, these new building rules will save consumers about $80/month on their utility bills, so you can figure that this helps to off-sets the problem of rising home prices. The Energy Commission put average total utility savings at $19,000 in today’s dollars over a 30-year period (the time frame of a typical mortgage), taking inflation into account.

This breaks down to saving about $633 per year. Maybe this doesn’t sound hugely significant, but money saved is money saved, right?

The Upshot

So this is definitely a good news/bad news piece of, well, news.

Buyers don’t want to see home prices rise any higher, but the fact of the matter is that, given that these rules only apply to newly built homes, they won’t necessarily present an insurmountable issue for the first-time buyers among us, who can always look to homes built before 2020 for a less expensive purchase. And for those who can afford the $9,500 price hike, they will make their money back from savings on their utility bills in the long-run, plus almost $10k extra.

This will be something to keep an eye on as it is put into practice (the rules do still need to be approved by the California Building Standards Commission later this year in order to pass), but from the outset, this seems like a good move for both homeowners and the environment in the long-run.


LA Times



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