State and local solar industry players have been gearing up for the institution of California’s new residential solar housing mandate on January 1, 2020, anticipating a surge that should all but double the number of new residential solar home systems installed statewide.
Approved first by California Energy Commission’s (CEC) Green Building Standards Code with final approval from the CEC, the new, Title 24 rules require single-family homes and multi-family buildings as high as three stories be solar-ready or come equipped with solar photovoltaic (PV) systems. “We installed 25,000 solar roofs in California last year (2018) and expect to increase that by a similar number by 2021” as a result of the new home solar roofs requirements, Judson Diehl, vice president, builder solar at Petersen-Dean, told Solar Magazine.
New rooftop solar PV systems are expected to reduce home energy usage by more than 50% as compared to today’s standards, which were enacted in 2006, and help California realize its goal of 80% net zero-carbon energy by 2050, according to the CEC. “These provisions really are historic and will be a beacon of light for the rest of the country,” CEC commissioner Kent Sasaki was quoted in The Mercury News.
New home prices rises and meeting Title 24 new solar home standards
Generally speaking, Petersen-Dean Solar and Roofing’s approach to the new market rules is to concentrate on meeting Title 24 requirements first and then working with customers to customize rooftop PV systems to leave room for possible expansion, future developments and meeting customers’ particular needs and wants, Diehl continued.
Along with home-buyers, critics of the Title 24 new home solar mandate are concerned about further rises in California housing prices, which are already among the highest in the U.S. Diehl says Petersen-Dean and other industry participants have come up with ways to work around and avoid prospective rises in new home prices, which have been forecast to come in at around $10,000 on average. The solar roofing specialist offers power purchase agreements (PPAs) and solar home leases that spread the costs of solar rooftop installations, operations and maintenance over years, with some offering the possibility of paying zero money down.
In addition, installing rooftop PV systems when building new homes is typically more cost-effective for builders than it is for retrofits. Builders’ market leverage is typically higher when it comes to procurement and they start out with a clean slate on which to design and build, Diehl explained.
Furthermore, solar energy systems installers can earn a Title 24 solar compliance credit for the installations they complete that enhance the market value of homes, as well as others. “It’s become a big thing for builders in California and it’s now on the books,” Diehl said.
Making it easier to cut down home solar installation costs
All things considered, Title 24 “makes it easier to drive down costs. That’s one of the great things about this mandate,” according to Diehl.
“Roofers were really the first with access to California’s rooftops,” Diehl said in an interview. Petersen-Dean got involved with solar rooftop installations back in 2004. It now ranks among one of California’s largest residential solar systems installation companies, with its solar roofing group employing some 3,000 workers nationwide. California accounts for a lot of them, according to Diehl.
“The last time I checked, there were something like 350 home builders and general contractors in California. We’ve been working with them since 1984, longer than most solar companies have been in business,” he pointed out.
Management viewed solar rooftop installation as a natural channel for growth, Diehl recounted. Business really started taking off with the introduction of the federal investment tax credit (ITC) and by and large started primarily with solar retrofits, then moved into the new home and builder’s part of the market, he elaborated.
Title 24 ripples on through to new home construction energy integration
Title 24 zooms in on four areas: residential and non-residential ventilation requirements, non-residential lighting requirements, updated thermal envelope standards, senior energy research analyst Roberto Rodriguez Labastida explains in a May 22 Navigant Research blog post.
“By definition, the integration of new energy technologies can take the form of solar roofs, batteries, home energy management systems, Nest for example, EV chargers, connected heat pumps or electric water heaters,” Labastida told Solar Magazine. Ultimately, they’re all connected to and managed by an energy management smart home systems platform. “Then there’s second layer of smart appliances and devices installed from the beginning that also have a role to play.”
Somewhere between 70,000 and 100,000 new homes have been being built in California on average each year, he highlighted. Each with an average power capacity of 7 kilowatts (kW) that means anywhere from 500 megawatts (MW) to 700 MW comes online in California every year. That’s bound to have a big impact on R&D, investment and installations of new home construction energy integration, Labastida pointed out.
A market can that now stand on its own
Smart residential PV systems are what interests Labastida most, and that’s one of the focal points of recently released Navigant research paper—New Home Construction Energy Integration—for which Labastida was the lead author. It was regulatory push that set the foundation for growth of new home construction integration and that’s still true to a degree today, “but nowadays these technologies can stand on their own in the market.” Labastida did add a caveat, emphasizing that whether or not new-build smart home energy integration is economic today varies widely from state to state and regionally.
No need for new home costs to rise
That’s the case in California, for instance, competing in the market is more difficult in most U.S. states, such as Texas, where electricity costs typically average among the lowest in the nation. “But even there, the difference isn’t that high,” Labastida commented. “When it happens in Texas, it will expand to other parts of the U.S,” he said.
Labastida doesn’t think new home costs have to rise given implementation of Title 24, or similar mandates generally speaking. If you’re a home-builder, a selling point is that you can operate an integrated home energy system, recover the value from installations, actually make a profit and provide a premium, eco-friendly package of products and services by having an external, 10-year service agreement to operate and maintain the system for the next 10 years, which is what Sunrun offers to customers,” Labastida said.
Labastida also sees promising opportunities along the new solar home construction supply chain.“Few companies are targeting them on their own, either with products or services, or have assembled a sales force focused on them,” he said. “I would say the battery energy storage company Sonnen is the only one to come out with announcements, including two solar home and community projects in Arizona and Utah. Then there’s their partnership with Mandalay Homes to build a solar-plus-storage virtual power plant at the Jasper master-planned development in Prescott, Arizona,” Labastida concluded. comment↓