California’s Solar Mandate Under Fire

California passed a mandate requiring solar panels on most new homes and multifamily buildings beginning January 2020. But now this ground-breaking move to solar may be in peril.

The Golden State made history last May by passing a mandate that requires new homes
to have solar beginning in January, 2020. The ruling applies to most single-family
homes, as well as multi-family buildings up to three stories (including condos and
apartment complexes.) Homes that are not suitable for solar (for example, those
surrounded by large shade trees) will be exempt.

Green Builder Media guest columnist Pierre Delforge wrote that California’s updated
2020 code “will combine rooftop solar panels with enough energy efficiency measures
like insulation and better windows that all new single-family homes and low-rise
apartments will use net-zero electricity. This means that their solar array should offset all electricity use for cooling, plug-in equipment, and lighting on an annual basis.”

“The code also encourages builders to install energy storage,” Delforge continues, “such
as home batteries or flexible electric water heating, which allow residents to use more of
their own clean energy solar electricity at home as needed instead of automatically
sending it to the grid. This helps integrate renewable energy on the grid by storing solar
electricity when it is abundant for later use in the evening when demand is higher and
solar is no longer generating.”

The California Energy Commission (CEC) estimates that the mandate is equivalent to
taking 115,000 fossil fuel vehicles off the road and will save homeowners approximately
$80 per month on heating, cooling, and lighting bills (which translates into $15,000-
$20,000 over the course of a typical 30-year mortgage.)

Supporters of the mandate assert that it will fast-track a cleaner, renewable energy-
powered future, and that it takes stress off of California’s aging energy infrastructure.
Critics argue that the mandate will increase the upfront cost of a home by up to $10,000,
which could increase a 30-year mortgage by up to $40 per month. They also cite that
homeowners will be responsible for annual inspections and cleaning at an estimated
cost of $300-500 per year and will likely have to shell out upwards of $600 for
maintenance costs.

But just as manufacturers, builders, contractors, installers, service providers, and
homeowners are gearing up for full-scale implementation, the mandate has encountered
an unexpected—and potentially lethal—hurdle in the form of a proposal submitted by the Sacramento Municipal Utility District (SMUD), a publicly owned utility servicing more than 1.5 million customers.

SMUD’s proposal would allow home builders to access electricity generated by existing
solar farms, instead of through the installation of rooftop solar on individual homes and
multifamily buildings.

SMUD says the proposal complies with the mandate’s solar requirements, and the
utility has guaranteed an energy bill savings of at least $5 per kilowatt of solar power a
year, or about $20 annually for a typical household.

But here’s the rub: the original terms of the solar mandate didn’t clearly define
acceptable parameters for community solar, and SMUD’s proposal would allow builders
to access electricity from utility-scale solar farms as well as installations in Fresno
County, which is 200 miles away.

Needless to say, the proposal did not go over well with solar industry stakeholders.
Opponents call the proposal a loophole at best and a sham at worst, decrying that it would effectively overturn the solar mandate and eradicate the benefits of onsite solar,
including protecting homeowners from ongoing wildfire-related blackouts.

Furthermore, critics insist that the type of solar installations allowed under the SMUD
proposal shouldn’t be categorized as community solar, which are usually smaller
installations located close to the customers they serve.

In public meetings last week, the CEC heard from a wide spectrum of stakeholders,
including builders, solar industry professionals, environmental groups, and utility rate
payers.

Some of the Commissioners expressed concern over the broadness of the SMUD
proposal and the ultimate value that it would—or, rather, would not—deliver to
homeowners.

In the meetings, the CEC did emphasize that the original goal of the solar mandate was
to reduce carbon emissions through the deployment of clean, renewable energy, and not
just to promote rooftop solar.

Commissioner Andrew McAllister confirmed that the community solar option “would be
another way to satisfy and comply with the solar mandate with additive solar capacity
that provides direct benefit to the owner/resident. The 2019 T24 regulations explicitly
contemplate this option in general terms, pending actual applications, of which SMUD’s
is the first. We want to get it right.”

To that end, the CEC decided to postpone a final decision on SMUD’s proposal until
they could create acceptable parameters for community solar under the mandate.
So, the silver bullet question remains: Is California’s solar mandate, touted as the first of
its kind to promote onsite solar on new homes and multi-family buildings, in peril? Only
time will tell, and the answer will likely reside in the CEC’s ultimate characterization of
community solar.