As of January 1, 2020, the California solar panel mandate is the first statewide residential requirement for solar power in the United States. This mandate has several stipulations that require compliance for new construction homes. New residential homebuilders have direct impact, and must do one of two things:
- Install solar panels on new homes
- Build a solar power system that serves a group of new homes
The requirement may be waived if the property does not receive enough sunlight for the solar panels to be useful. However, the California solar panel mandate applies to virtually all new construction on buildings that are three floors or less, including:
- Single family homes
- Apartment buildings
Where Did the California Solar Panel Mandate Come From?
The California solar panel mandate was approved in 2018 by the California Energy Commission (CEC). The ruling is part of the state’s 2019 update of standards for building energy efficiency. The state is also working to reduce greenhouse gas emissions.
What is the Cost to Home Buyers?
On average, the new requirement may add $8,000 to $10,000 to the cost of a new home. The CEC estimates the California solar panel mandate will increase monthly mortgage payments by $40. However, it also estimates homeowners will save an average of $80 each month on energy costs.
What is the Difference between Leased and Owned Solar Panels?
Leased Solar Panels and the California Solar Panel Mandate
For home buyers, it is important to know if the solar panels on the home are purchased or leased. Solar panel leases may last several years. Some mortgage lenders will not allow leased solar panels to be included in a home’s valuation for mortgage purposes. Also, home buyers would need to agree to take over the payments on a leased solar panel system.
As such, home buyers should learn important points from the home seller such as:
- Contract details
- Length of lease term
- Monthly fees
- Warranty coverage
- Manufacturer of the solar panels
- Installation company
- System size (how much power does the system generate)
- Whether the local utility offers net metering (lets home owners sell excess electricity back to the power grid)
- Does their company’s relocation program allow for leased equipment
Home sellers with leased solar panel systems should look into their options, including:
- Should they pay for the remainder of the contract?
- Can they find a buyer willing to take on lease payments?
- What are the requirements to transfer a lease?
- Is the warranty transferable? If yes, for how long?
- What is the cost to remove or relocate the solar panels if the buyer requests this?
- Will their relocation benefits be affected by leased equipment?
Owned Solar Panels and the California Solar Panel Mandate
Home sellers that own, rather than lease, their solar panels are in a comparatively better position. Several studies confirm that solar panels add value to a home. The California solar panel mandate will have the effect of increasing the value of homes that have solar panels installed by the home builder. Some estimates show homes with solar panels usually sell for around $15,000 more than other homes.
There are a few other significant benefits for home owners who choose to install solar panel systems:
- There may be tax and other incentives
- Solar panel prices continue to decline in cost
- Owners may recover the cost of the system upon sale of the home
Also, some home owners may be able to receive credits on their energy bill under net metering systems when they send excess energy back to the utility company.
What Does The California Solar Panel Mandate Mean?
Home buyers should be aware of the new California solar panel mandate. This and other initiatives will continue to impact the real estate market in many ways. Employers with new hires and transferees who are looking to purchase a home in California or other markets with similar requirements should work with a Relocation Management Company (RMC). RMCs that have knowledge and experience with relocations are ideal sources for information relating to local housing market requirements.
The GMS network of real estate agents consistently leads the industry in the way its top agents market homes. Each agent has access to the latest technology and best practices for marketing real estate, and will understand how to approach issues relating to solar panel systems and the California solar panel mandate.
GMS’ team of domestic relocation experts has helped thousands of our clients understand how to provide solutions for their new hires and transferees who are looking to buy or sell a home. Our network of top agents market homes following industry best practices. As a result, they will have knowledge that helps home buyers and sellers understand what the California solar panel mandate means for their home buying and selling.
GMS was the first relocation company to register as a “.com.” The company also created the first online interactive tools and calculators, and revolutionized the entire relocation industry. GMS continues to set the industry pace as the pioneer in innovation and technology solutions with its proprietary MyRelocation® technology platform.
Contact our experts online to learn more about the impact of the California solar panel mandate on home buyers and sellers, or give us a call at 800.617.1904 or 480.922.0700 today.