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In a groundbreaking decision, the California Energy Commission voted today to require the installation of solar panels on most newly built single-family homes and multifamily buildings of three stories or fewer. The decision, which does not require the approval of the Legislature, will go into effect in 2020.

California Leads the Way

California becomes the first state to mandate solar panels, an approach in keeping with California’s efforts to slash carbon emissions 40 percent below 1990 levels by 2030. The Energy Commission expects the effort to reduce greenhouse gas emissions by 1.4 million metric tons over three years. It is also likely to give a tremendous boost to the solar installation industry. Reflecting on the requirement, Kelly Knutsen of the trade group California Solar and Storage Association said, “This is going to be a significant increase in the solar market in California. We are also sending a national message that … we are a leader in the clean energy economy.”

Increased Costs Offset by Energy Savings

The decision has its detractors among some business associations that have focused on the estimated $9,500 cost per building the requirement will add, in part to cover the Trump administration’s tariff on solar panels. But the California Building Industry Association, which supports the initiative, acknowledged that while the installation costs will be passed on to consumers as part of a home purchase, the cost will be offset by lowered energy costs over the term of a mortgage. They estimate that for every $40 in monthly payments the energy standards increase, consumers will save $80 in energy costs.

Solar panels are popular with California consumers for their effect on energy costs and already found on about 5 percent of homes.

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California Mandates Solar Panels on New Homes