Will California’s Solar Mandate Pay Off for Homeowners?

Amy Hou  |  May 17, 2018   |  Energy & Sustainability  


California just became the first state in the nation to require rooftop solar on all new homes, apartments, and condos. The solar mandate is estimated to cost an additional $10,000 upfront for the purchase of a new home, which should be more than repaid in returns over time. But can homeowners know for sure that they will see a prompt return? We think the answer is trending toward yes, and here’s why.  

California’s Solar Mandate

First, let’s take another look at the solar mandate itself. There are some exceptions to the rule: homes over three stories tall, with very little sun exposure, or roofs with too little surface area. Nevertheless, the new code will have a far-reaching impact. SunPower Corp. expects demand for residential solar in California to increase by 50 percent.

Will it benefit homeowners as much as it will solar companies, though? The California Energy Commission says yes. The commission estimates that the average homeowner will save about $19,000 on their electric bills over 30 years from their solar panels.

Falling Costs of Solar PV

Most likely, costs of solar panels themselves will continue to fall, shortening the expected payback period for many. The industry’s seeing the lowest prices for solar to date, falling from $3.86 per watt in 2014 to $3.13 per watt in 2017. Moreover, in every utility service territory but one, EnergySage found the cost of solar to be at least 50 percent lower than the rate offered by the utility. As the price of solar panels and installations steadily declines, homeowners are increasingly likely to save on energy costs by investing in solar.  

Rising Accuracy in Payback Estimates

However, it’s not enough to estimate a return on investment for the average homeowner. Residential consumers need to know how this will affect their individual homes, based on their specific location, roof size, tree cover, and electric bills. Luckily, consumers now have more tools at hand to acquire an accurate estimate than ever before. EnergySage’s solar calculator provides a quick and easy ROI projection.

For more personalized estimates, utility data for solar offers another option. By providing monthly energy data directly from the utility, utility data produces an accurate, customized calculation of exactly how much a homeowner will save based on their current consumption levels and tariff.  

California’s solar mandate, though bold, is an effective step toward a future of clean energy driven by solar. Given falling solar prices and rising accuracy in ROI projections, homeowners are likely to see substantial returns in the long run. To learn more about other factors driving growth in the solar industry, check out our new eBook: Shedding Light on the Solar Market.

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About Amy Hou

Amy Hou is a Marketing Manager at Urjanet, overseeing content and communications. She enjoys writing about the latest industry updates in sustainability, energy efficiency, and data innovation.

Tags   Energy   |   Solar   |   Urjanet   |