California Passes Solar Panel Mandate

[Alex Bekeza]

California recently signed a mandate requiring most new homes in the state to include solar panels after 2020. California is the first state to do so, but it likely won't be the last, with New Jersey and Minnesota pursuing increased reliance on solar.

Despite criticisms of the mandate, the trend towards increased solar use will continue as economies of scale push prices down, utilities pivot their business models and the economic and health benefits of decreased reliance on the grid and fossil fuels are revealed over time.

The measure, approved by California regulators in a unanimous decision on Wednesday May 9, 2018, will require all new residential buildings, including apartments and condos that are three stories or fewer, to have rooftop solar panels starting in 2020.

The California Energy Commission, the body responsible for approving the decision, estimated the panels will tack on approximately $9,500 in additional construction fees but save homeowners $19,000 in energy bills over the course of 30 years.

Reactions are split on this.  I wanted to see how the Bigger Pockets community would weight in.. Any thoughts???

[Steve K.]

@Nathan Gesner I just had to weigh in on your comment and so called "hard truths" which turn out to be entirely false. I've responded to each of your points respectfully because I've had a different experience with solar than what you describe.  

1. The payback period for solar hasn't been 20 years in 20 years. In many areas such as California the current average payback period is 5-8 years on a cash purchase. A 20 year payback period like you describe is not impossible but it would be rare with today's prices. You'd have to drastically overpay or detail your panels with gold trim to have such a long payback period. The panels on my roof were paid off in less than a year. I bought them at wholesale price and installed them myself, so it depends on how good a deal you get, how good your roof orientation and pitch is, how many sunny days you get in your region, how good your local incentives are, how much local competition there is among solar installers, etc.  However calculating payback periods is uncommon these days anyway as the cash purchaser is rare. Just like real estate most people finance their systems, so what matters is cash flow. Typically loan payments are less than a normal utility bill, so people with solar pay less per month for electricity than those without, that's why people do it, because they like saving money. 

2. Solar is indeed "green energy". What you are referring to is called embodied energy or energy return on energy invested (EROI). It is easily calculated including resource extraction, manufacture, shipping, and installation. Solar panels take 1 to 4 years to offset their embodied energy with electricity production, depending on the brand. The standard warranty is 20-25 years, so they pay back the energy it takes to produce themselves several times over during just the warranty period, and average life expectancy is 30-50 years as evidenced by the panels produced in the 70's that are still making electricity today.   

3. Yes there are tax subsidies for solar. Please find me a form of energy that is not subsidized. Nuclear for example is the most subsidized form of energy, it would not exist without government subsidy because nobody would insure a nuclear power plant. Tax dollars insure nuclear plants, clean up disasters and also store the waste indefinitely. 43% of coal is mined on public lands, then it is shipped on railways built with tax dollars and burned in power plants built with tax dollars. Oil would be insanely expensive today if not for the Intangible Drilling Cost tax deduction of 1916, the Oil Depletion Allowance Act of 1926, the Domestic Manufacturing Deduction of 2004, etc. Energy is about the farthest thing from a free market you'll ever find, so why single solar out for getting government support when all forms of energy do? Many conservatives and libertarians actually love solar, it's not just liberals who love saving money! In fact the Solar Investment Tax Credit, the 30% tax credit which is driving the growth of the solar market, is from the Energy Policy Act of 2005, which if you recall was during the presidency of George W. Bush. That tax credit was recently extended by another Republican president. 

4. Batteries are either a luxury add on for those who prefer a battery bank over a generator for backup power, or a necessary component for a backwoods cabin that is off the grid. 99% of modern solar electric systems don't even use batteries. They use what's called net metering which doesn't require batteries. As far as circuits burning out I'm not sure what you're referring to there, that's completely made up.

5. What panels use those hazardous materials? None that I've ever seen. Cadmium was used very briefly and on a small scale years ago but that type of panel is obsolete. Modern solar panels are made from silicon wafers. Silicon is the eight most common element in the universe. It is not hazardous and is easily recycled. 

6. Every solar system I've worked on has produced more energy than forecasted. Somebody may have messed up an energy forecast at some point, but it is not standard industry practice or lawyers would really love solar. As far as birds burning up, that has happened in a few isolated incidents with concentrated solar farms in the Mojave desert, which is a completely different technology than rooftop solar. It's not a factor with the types of panels you find on residential rooftops like California now requires. Also birds get killed by semi-trucks every day but that doesn't mean we're going to halt the trucking industry does it?

There is a lot of bad/outdated information about solar out there, I didn't want it to be propagated here. I'm not sure I agree with California's mandate, and I'm not sure how it will be implemented when many homes aren't suitable for solar, however I hate to see solar categorized as liberal/bad technology when it's actually great technology that benefits everyone regardless of political affiliation.