California to make "Solar "mandatory for new Homes!!!!!!
Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
California to make "Solar "mandatory for new Homes!!!!!!
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Investor · Valencia, CA · Member since 2017 · 171 posts · 130 votes
7yHi @Account Closed I'm happy to run numbers with you in AZ, because what you have posted is certainly no reflection of the reality I work with there. My latest customer, for example in Prescott Valley had a utility bill averaging $183. We eliminated that bill with a solar system that costs him $149/month for 20 years with no increase. If you factor in inflation on the utility at 4% annually then he will save tens of thousands over 20 years. He did not come out of pocket one cent to do that with the zero down loan.
For sure batteries are the next massive step that is and will happen in solar and renewable, but for now the utility is the "battery" through net metering. The over-production from solar is purchased by the utility. At night power is purchased back from the utility. The goal to offset that overall bill to zero - depending on the roof space etc.
There are some small utilities in AZ that have punitive conditions for solar, but for the overwhelming majority, the numbers for solar in AZ are excellent. Batteries are already economically viable in CA because of the cost of utility power. It will be around 24 months before that's the case in AZ
222 Replies
- Los Angeles, CA · Member since 2019 · 512 posts · 301 votes7y
@Steven Picker
First time on this app! Where did my post go? Meant to put it on my thread but I think it just got sent to you
- Rental Property Investor · Union, ME · Member since 2018 · 161 posts · 104 votes7y
It's weird but Solar actually works more efficiently in colder climates. The country with the greatest percentage of their energy coming from solar is actually Germany, which has approximately the same sun ratings as Maine (where I am located) does, and it is extremely profitable for them. This is actually weird to think about, but Solar works better in cold climates such as New England, as the heat increases the load on the electrical wires. That said, I think the requirement can be done profitably, it just adds another layer of education and optimization for REI folks. I am exploring putting solar panels on my house in Maine and it would be profitable for me in the long run (If I can keep the snow off!). Educate, learn, delegate, it'll be fine in the long run!
@Brian Ploszay @Account Closed about the permitting process taking too long and slowing everything down, it's really frustrating, in fact I could complain about it all day. But in my experience navigating the green points program here in CO, solar is a quick way to go past go and collect $200. I suspect it's similar in CA, they're implementing a lot of changes in building codes and solar is the quickest way to get them where they want to be. Change is inevitable and those that embrace it and pivot will find the opportunity within while those that don't, won't.
@Jonathan W., @Bryan Clement you guys should go back and read the whole thread a lot of these points have been addressed.
Originally posted by @Jonathan W.:
@Steven Picker
Now I’m no expert but this is what I gathered so if I’m wrong in any area, constructive feed back is most definitely welcome
Pros
1. You get to feel really good about yourself without every having to understand economics or how the business works(same with socialism)
2. During very very hot days, people will have enough energy to meet their electricity uses(heat AC use)
3. China is producing a lot for cheap so replacing them isn’t that expensive.
Cons
1. At night time you’ll need batteries and those will be expensive. Also batteries don’t last and they create toxic waste(real green lol)
2. Excess/surplus energy will be sent back to the company, reversing your meter and then the company either sells it back to you at night so basically the utility company makes no money or they just have a bunch of excess they can’t sell. How will they survive(by charging fees!!!)? Energy will be needed on days solar won’t come through or be as effective. You need direct sunlight! (Full time perfect orientation will not be achieved) Don’t let an idiot tell you otherwise
3. Your energy needs are met by the sun while others operate 24/7.
4. Utilities charge a fee to maintain or just to have And can cost more then your normal electric bill(if you don’t believe this you need to talk to more people who have it, could be different in different areas)
The utility companies would go bankrupt otherwise.
5. Maybe it’s changed with technology but for the most part solar degrades by about 5 percent a year lasting about 20 years. So half way through the life is solar you are not getting nearly what you use to.
6. It goes on your roof. Any future roof work will need to consider this and could require extra material and maintenance.
Pro and con
6. Technology in solar only collects 1/3 of what it possibly could from all that light. If technology improves solar panels you have now will be outdated and need to be replaced.
Common sense
7. You’ll have to make sure trees are out of the way. Trees are pretty freakin green and great for shade/blocking the sun.
8. They can be expensive and a lot of people lease. Can make selling the house more of a headache as you an buyer have to discuss either removing it, taking it over or whatever you two want to roll with.
Just a few things: batteries are not a requirement in modern solar (since net metering became a thing in 1980, see earlier in the thread), Degradation rate is not 5%, it's less than 1% and panels carry 20-25 year warranties and ones made in the 70's are still making electricity today so although power drops over time they last a very long time (no moving parts to break). Micro inverters have been developed to deal with shading issues. You don't need direct sunlight, sometimes they even go on north facing roofs, you just need photons think of a solar calculator it works even inside. No need to replace panels, even if a new one comes out that's more efficient, the old one is still making electricity so they achieve the same thing... You would benefit from reading this whole thread, as you actually seem to have a good amount of solar knowledge probably more than most but a lot of what you wrote is outdated or inaccurate, just FYI pease consider this the constructive feedback you asked for. Respectfully, Steve
- Real Estate Agent · San Antonio, TX · Member since 2017 · 814 posts · 466 votes7y
Great post. I understand your point. While you can take advantage of "points" in your area, it may not be the same for other investors with big projects on different areas. I'm assuming the "points" were based on LEED points/status. This is good, and if a project have LEED requirements and you can profit from it then go ahead and build. I'm not a LEED certified but I know competing with projects/awards with LEED requirements plays an important role.
This is different to everyone with medium to large housing projects that must comply with the "mandatory State solar energy regulation". Sometimes it is just not efficient, or you have to dedicate land or buy land to comply with these requirements, which can kill the deal.
Originally posted by @David Wrenn:
@S E Huffaker I’m definitely going into the solar repair business lol. Have they even taken that into account or the fact that this rapid influx of demand will drive likely drive up solar panel prices and maintenance prices? How are large scale mixed use developments going to operate?
It’s unfortunate that any American is forced to do something like have health insurance(even though it may be smart) solar power etc.
If they’re going to enforce a mandated extra expense there should be tax credits etc for the builder as they are bearing the burden of the upfront costs while the homeowner reaps the backend savings. It’s just going to slow building and home sales slightly. However it’s California home of the Prius so who knows.
I want to build a house off the grid, but it’s MY decision to make.
Just to address a few of your points: there is virtually no maintenance for solar, demand has driven prices down by 60% over the past few years (efficiencies of scale, mass production), and there is a 30% tax credit already, thanks to G.W. Bush circa 2005.
Originally posted by @Josue Vargas:
Great post. I understand your point. While you can take advantage of "points" in your area, it may not be the same for other investors with big projects on different areas. I'm assuming the "points" were based on LEED points/status. This is good, and if a project have LEED requirements and you can profit from it then go ahead and build. I'm not a LEED certified but I know competing with projects/awards with LEED requirements plays an important role.
This is different to everyone with medium to large housing projects that must comply with the "mandatory State solar energy regulation". Sometimes it is just not efficient, or you have to dedicate land or buy land to comply with these requirements, which can kill the deal.
You're not wrong, it creates another layer. Look at is an opportunity to make more profit. Say you have to build a community solar array to power a new development, in lieu of putting panels on each roof. Let's say the community solar array costs an extra $1M. Sub it out to me and keep a 5% cut.
- Real Estate Agent · San Antonio, TX · Member since 2017 · 814 posts · 466 votes7y
Originally posted by @Steve K.:
Originally posted by @David Wrenn:
@S E Huffaker I’m definitely going into the solar repair business lol. Have they even taken that into account or the fact that this rapid influx of demand will drive likely drive up solar panel prices and maintenance prices? How are large scale mixed use developments going to operate?
It’s unfortunate that any American is forced to do something like have health insurance(even though it may be smart) solar power etc.
If they’re going to enforce a mandated extra expense there should be tax credits etc for the builder as they are bearing the burden of the upfront costs while the homeowner reaps the backend savings. It’s just going to slow building and home sales slightly. However it’s California home of the Prius so who knows.
I want to build a house off the grid, but it’s MY decision to make.
Just to address a few of your points: there is virtually no maintenance for solar, demand has driven prices down by 60% over the past few years (efficiencies of scale, mass production), and there is a 30% tax credit already, thanks to G.W. Bush circa 2005.
Except when you have to exchange/replace the roof, if they are install on the roof. Depending on the roof area, this can add-up to 15% of the cost of the roof replacement. Again, thinking on 3-4 story apartment complexes, the net roof area is smaller per apartment # under the same roof than a SFH, so you need to come up with space to install the adequate # of solar panels. You still have savings benefits thought (8-10 years since investment?). You can install solar panels on parking lots, but efficiency will depend on many factors.
Originally posted by @Josue Vargas:
Originally posted by @Steve K.:
Originally posted by @David Wrenn:
@S E Huffaker I’m definitely going into the solar repair business lol. Have they even taken that into account or the fact that this rapid influx of demand will drive likely drive up solar panel prices and maintenance prices? How are large scale mixed use developments going to operate?
It’s unfortunate that any American is forced to do something like have health insurance(even though it may be smart) solar power etc.
If they’re going to enforce a mandated extra expense there should be tax credits etc for the builder as they are bearing the burden of the upfront costs while the homeowner reaps the backend savings. It’s just going to slow building and home sales slightly. However it’s California home of the Prius so who knows.
I want to build a house off the grid, but it’s MY decision to make.
Just to address a few of your points: there is virtually no maintenance for solar, demand has driven prices down by 60% over the past few years (efficiencies of scale, mass production), and there is a 30% tax credit already, thanks to G.W. Bush circa 2005.
Except when you have to exchange/replace the roof, if they are install on the roof. Depending on the roof area, this can add-up to 15% of the cost of the roof replacement. Again, thinking on 3-4 story apartment complexes, the net roof area is smaller per apartment # under the same roof than a SFH, so you need to come up with space to install the adequate # of solar panels. You still have savings benefits thought (8-10 years since investment?). You can install solar panels on parking lots, but efficiency will depend on many factors.
Yup good points.
- Los Angeles, CA · Member since 2019 · 512 posts · 301 votes7y
@Steve K.
Well a lot of it contradicts what a teacher had told me. I will definitely ask and I love the feedback for sure so thank you
the ones in the 1970s and how in-efficient they were he said there is no way and doubts a lot of what I just read to him.
I will go back and read more but there a lot of threads and sometimes you don’t know who the source is. A lot of this info is from a teacher so I could be conveying it wrong but he seems a lot more pessimistic. But he’s also an expert on electricity.
But that is why I am on here! :)
Knowledge can be a scarce resource
I definitely appreciate the constructive feedback Steve.
Still did not address these companies going out of business. There are utility companies going BK but some do blame the recent fire.
Time to do more research
Ty !
Originally posted by @Jonathan W.:
@Steve K.
Well a lot of it contradicts what a teacher had told me. I will definitely ask and I love the feedback for sure so thank you
the ones in the 1970s and how in-efficient they were he said there is no way and doubts a lot of what I just read to him.
I will go back and read more but there a lot of threads and sometimes you don’t know who the source is. A lot of this info is from a teacher so I could be conveying it wrong but he seems a lot more pessimistic. But he’s also an expert on electricity.
But that is why I am on here! :)
Knowledge can be a scarce resource
I definitely appreciate the constructive feedback Steve.
Still did not address these companies going out of business. There are utility companies going BK but some do blame the recent fire.
Time to do more research
Ty !
Honestly that’s pretty discouraging that a teacher told you those things. 5% degradation was literally the case in the 90’s I think. It’s been less than 1% for a long time now. Solar tech is improving every day, gotta constantly update. Fundamentally he’s right on the direct light and shade issues, we shoot for ideal orientation and no shade obviously but that’s become less important over the last few years with micro inverters and panels coming down in price, we have more options now and sometimes it’s even cost effective to put panels on the north side of a roof which a few years ago would have been considered moronic. Hit me up with any other questions on here or DM.
Originally posted by @Steve K.:
Originally posted by @Jonathan W.:
@Steve K.
Well a lot of it contradicts what a teacher had told me. I will definitely ask and I love the feedback for sure so thank you
the ones in the 1970s and how in-efficient they were he said there is no way and doubts a lot of what I just read to him.
I will go back and read more but there a lot of threads and sometimes you don’t know who the source is. A lot of this info is from a teacher so I could be conveying it wrong but he seems a lot more pessimistic. But he’s also an expert on electricity.
But that is why I am on here! :)
Knowledge can be a scarce resource
I definitely appreciate the constructive feedback Steve.
Still did not address these companies going out of business. There are utility companies going BK but some do blame the recent fire.
Time to do more research
Ty !
Honestly that’s pretty discouraging that a teacher told you those things. 5% degradation was literally the case in the 90’s I think. It’s been less than 1% for a long time now. Solar tech is improving every day, gotta constantly update. Fundamentally he’s right on the direct light and shade issues, we shoot for ideal orientation and no shade obviously but that’s become less important over the last few years with micro inverters and panels coming down in price, we have more options now and sometimes it’s even cost effective to put panels on the north side of a roof which a few years ago would have been considered moronic. Hit me up with any other questions on here or DM.
Regarding utility companies going out of business: this is a thesis-worthy topic, here in CO they’re actually getting in on the action the big utilities are the biggest developers of large scale solar and have a ton of huge solar projects on the books for the next few years meanwhile they’re retiring coal power plants and not building new ones, old model out, new model in.
- 7yRyan KellyBusiness MemberReal Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
Time to move to Texas!
Ryan Kelly Group - Keller Williams5112 Reviews No wonder 79% of Californians want to move ! It might have the third biggest economy in the world but that doesn’t mean much when that economy is completely broke lol as per usual ,this is insane government control run amuck . Will the people ever learn there ?, sadly I fear that answer is NO
- Investor · Valencia, CA · Member since 2017 · 171 posts · 130 votes7y
Originally posted by @Dennis M.:
No wonder 79% of Californians want to move ! It might have the third biggest economy in the world but that doesn’t mean much when that economy is completely broke lol as per usual ,this is insane government control run amuck . Will the people ever learn there ?, sadly I fear that answer is NO
Actually CA has a surplus. https://www.politifact.com/california/statements/2018/dec/18/jerry-brown/does-california-have-budget-surplus-nearly-30-bill/
- 7yBjorn AhlbladPro MemberInvestor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
Given that the prevailing utility is PG&E and is declaring backruptcy, and is hopeless, this is a great idea!
- Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes7y
Check out this super pro solar bill proposed for Nevada(for apartment renters)
Originally posted by @Andrew Smith:
Originally posted by @Dennis M.:
No wonder 79% of Californians want to move ! It might have the third biggest economy in the world but that doesn’t mean much when that economy is completely broke lol as per usual ,this is insane government control run amuck . Will the people ever learn there ?, sadly I fear that answer is NO
Actually CA has a surplus. https://www.politifact.com/california/statements/2018/dec/18/jerry-brown/does-california-have-budget-surplus-nearly-30-bill/
Seriously, how long is this false narrative about CA's budget going to be stuck in peoples' heads? CA's been in surplus for so many years now... Will some people ever learn? Sadly I fear that answer is NO.
- Fairfield / Vacaville CA · Member since 2019 · 1 post · 2 votes7y
Northern California here. Had solar installed last month, enough to conservatively offset 126% of estimated usage. After a 30% tax credit and financing (3.99%) we were able to get a 25 year Sunpower 7.1kw system installed with a monthly payment less than our average electric bill($196 pmt vs $197 non-solar)
With NEM we'll be able to bank the surplus and use it throughout the year, which will especially be important for the higher rate during time of use (TOU) of 3-8 pm that PG&E charges. Summer months will offset winter months, assuming it's during the same 3-8 window. Since it's a yearly true up bill it'll all be reconciled and balanced out every January in our case. Having your utility company act as your battery for surplus is huge. And speaking of the company, PG&E will undoubtedly continue 5%+ YoY rate increases, which will be protected by a system producing over 100% of usage.
Our breakeven point is almost exactly 6 years, after which the system will generate for another 18 years under the 25 year comprehensive warranty.
Technically the system will cash flow from day one, all with no money down. I had to run the numbers several times to believe it myself, because just a few years ago it was a very different story.
So yeah, not a big deal that by 2020 it'll be required, at least for California which is perhaps the best state for residential solar.
- Property Manager · Raleigh, NC · Member since 2014 · 729 posts · 596 votes7y
@Steve K.
if they make economic sense, why don't people install without the mandate? I know people who installed only because government paid a large portion of the bill. If not, they would not be feasiblefor them. also, now that they are mandated. the price will increase. kind of how when buying crayons for school kids, the smaller mandated packs are more expensive than the larger packs. it is inevitable.
Originally posted by @Anthony Hunter:
Northern California here. Had solar installed last month, enough to conservatively offset 126% of estimated usage. After a 30% tax credit and financing (3.99%) we were able to get a 25 year Sunpower 7.1kw system installed with a monthly payment less than our average electric bill($196 pmt vs $197 non-solar)
With NEM we'll be able to bank the surplus and use it throughout the year, which will especially be important for the higher rate during time of use (TOU) of 3-8 pm that PG&E charges. Summer months will offset winter months, assuming it's during the same 3-8 window. Since it's a yearly true up bill it'll all be reconciled and balanced out every January in our case. Having your utility company act as your battery for surplus is huge. And speaking of the company, PG&E will undoubtedly continue 5%+ YoY rate increases, which will be protected by a system producing over 100% of usage.
Our breakeven point is almost exactly 6 years, after which the system will generate for another 18 years under the 25 year comprehensive warranty.
Technically the system will cash flow from day one, all with no money down. I had to run the numbers several times to believe it myself, because just a few years ago it was a very different story.
So yeah, not a big deal that by 2020 it'll be required, at least for California which is perhaps the best state for residential solar.
Not bad numbers especially since you bought the Rolls Royce of solar panels, going with SunPower. Simply the best in my opinion wise choice.
+1 to the fact that solar works better in cool climates.
Our small (1.92 kw, 8 panel) system here in Wisconsin has been installed on one of our rentals since Dec 2011 and has exceeded expectations every year. Some of our highest producing months have been March, because of the cooler temps. Even though the sun is lower in the sky, the productivity is high.
I want to expand our system. Maybe next year. The cost of systems now are already so much less than they were in 2011. The current system provides about half the electricity for one apartment on our rental. We plan to add another ~2kW so that we're close to fully covering the electricity usage for that large unit.
Originally posted by @Curtis Mears:
@Steve K.
if they make economic sense, why don't people install without the mandate? I know people who installed only because government paid a large portion of the bill. If not, they would not be feasiblefor them. also, now that they are mandated. the price will increase. kind of how when buying crayons for school kids, the smaller mandated packs are more expensive than the larger packs. it is inevitable.
Curtis, People do install solar without the mandate. Solar has a wide adoption across the US, and doubling every few years. 19% of California's electricity came from solar in 2018, and there are about 1 Million residential rooftop solar installations there. Utility scale solar provides enough electricity for an additional 9M homes. So I'd say people are installing them without the mandate. The CA Building Industry Association (CBIA) even supported the mandate because according to them, builders are putting solar on almost every new home in CA anyway.
So the question becomes, "If it's already so popular, why need a mandate?" and now that's a good question. I can't speak for the policy makers, but it's related to California's goal of being carbon free by 2045. I didn't follow the whole process as the mandate became law over the last 10 years, so I can't explain to you exactly how it came about, but I'm sure it was a shining example of government working in it's most wise and efficient form to refine the law into a perfect piece of legislation (sarcasm). As pro-solar as I am I also see how the "optics" of this aren't great. But I'm not against the mandate per-se as it will boost the industry I work in even further, and I believe it benefits everyone by pushing us to adopt more cost effective (long term) sources of energy.
The "large portion from the government" that you mentioned is the 30% federal tax credit. It's true solar wouldn't be where it is today without this tax credit (so thank you G.W. Bush who signed it onto law in 2005, and thank you current president for extending it through 2024). However, solar isn't alone as a subsidized energy source. Every single form of energy receives direct and indirect support from the government. Many trillions go to nuclear, coal, gas, hydro, and R&D for technologies we haven't yet heard of. Without government subsidies for energy our economy would literally collapse overnight.
As of now wind and solar are the only forms of energy we know of that have the potential to be cost effective without government support. In 2020 the solar tax credit begins going away, dropping a few percentage points each year and phasing out entirely by 2024. By then we won't need it, as we expect solar to have completely undercut legacy fuels in price. Contrary to your esteemed crayon theory, solar panel prices have not gone up, but down 75% since 2009. The mandate (although minor in the grand scheme of things because it only applies to 80,000 homes a year or far less than 1% of CA housing stock) will contribute to pushing prices down further (efficiencies of scale, competition, mass production).
On one level energy is extremely complicated, but on the most basic level it comes down to fossil fuels being a finite resource that becomes more rare and more expensive to extract over time, while sunshine and wind are free and abundant. Brace yourself for a lot more solar and wind coming soon to a place near you, as most all new energy capacity in the near future will be from renewables.
This Forbes article explains how quickly renewables are taking over:
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