california solar mandate map of california

An overview of the California solar mandate

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If one state leads the rest of the country in setting the bar for solar, it’s California: the Golden State consistently tops the Solar Energy Industries Association’s list for the best states for solar, having more than four times the installed capacity than the runner up (North Carolina). 

While California has an abundance of sunshine, that’s surprisingly not the primary reason for the prevalence of solar panel installations throughout the state. In fact, much of California’s success in solar is the result of forward-thinking policies set by the state government, from the California Solar Initiative (CSI) to its ambitious clean energy goals.

The future of solar in the Golden State is looking brighter than ever thanks to the new, first-of-its-kind California solar mandate, a recent code that requires new homes to be built with a solar electricity system. In this article, we’ll give an overview of the mandate, as well as go over some costs and savings estimates for future homebuyers in California. 

What is the California solar mandate?

The California solar mandate is a building code that requires new construction homes to have a solar photovoltaic (PV) system as an electricity source. This code, which went into effect on January 1, 2020, applies to both single-family homes and multi-family homes that are up to three stories high. 

The solar panel system needs to be large enough to meet the annual electricity usage of the building; given that electricity usage can be difficult to determine in new construction projects, builders use an estimate for each property that’s based on the building’s floor space and the climate zone in which it’s located.

However, there is flexibility when it comes to sizing the solar panel system: for one, builders can decrease the size requirement of a system on a property by incorporating battery storage into the building. In fact, you can reduce the required size of the solar panel system by as much as 25 percent when you pair it with a solar battery, such as the Tesla Powerwall or LG Chem RESU10H. Plus, by incorporating energy efficiency measures or other demand-responsive measures into building design alongside battery storage, the required PV system sizes can be downsized by 40 percent or more.

Exceptions to the California solar mandate

There are a few types of new residential construction that are exempt from the code. In some cases, properties with a small enough roof or those that receive an abundance of shade may be exempt from installing a PV system. Additionally, building developers are welcome to pursue and build community solar projects, as opposed to rooftop solar panel systems for each property, so long as they receive approval from both the California Clean Energy Commission (CEC) and the local utility company. Any community solar project offered in lieu of on-site solar needs to offer similar benefits to the new homeowner that a rooftop or ground-mounted system located on their property would provide.

California solar mandate costs and savings numbers

The California Clean Energy Commission conducted a cost-effectiveness study to determine cost and savings implications for Californians purchasing a single-family home under these new building codes. They found that, with the solar panel requirement, the cost of a newly constructed single-family home will increase by approximately $8,400, equivalent to roughly $40 extra per month in mortgage payments. (Note: they calculated this estimate using a cost assumption of $3.10 per Watt for the installed solar panel system, higher than the average cost of solar quoted for California properties on the EnergySage Marketplace.)

However, the CEC also predicts that while upfront costs of new homes will increase, the savings benefits for new homeowners far outweigh these initial costs. Assuming an average electricity rate of approximately 18 cents per kilowatt-hour (kWh), the state estimates that single-family homeowners will save about $80 a month on electricity costs. These monthly electricity bill savings, combined with paying an extra $40 each month in mortgage payments for the solar panel system, means new homeowners will come out with $40 net savings each month. Annually, this comes out to $500 per year in savings. Should electricity prices continue to rise and the cost of solar continue to fall, these savings numbers only stand to increase.

California solar mandate by the numbers

  • Additional upfront cost to new single-family homes: $8,400
  • Cost equivalent in mortgage payments: $40 per month
  • Electricity bill savings: $80 per month
  • Net savings: $40 per month, $500 per year

You can learn more about these numbers and assumptions used in calculations on the CEC’s frequently-asked-questions page.

Compare your own solar options today

Whether you’re building a home in California or another state, it’s worth exploring your solar options. If you’re interested in seeing what you can save with a solar panel system, our free-to-use Solar Calculator gives you ballpark estimates for both costs and savings with installing solar on your home or business. When you’re ready to take the next step, register for the EnergySage Solar Marketplace to receive and compare up to seven custom solar quotes online from local installers.

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About Kerry Thoubboron

Kerry has worked in solar for more than 6 years, starting her career as an Energy Advisor dedicated to helping customers compare their options and make well-informed solar decisions. She graduated from Boston University with a degree in Environmental Analysis and Policy. Outside of work, you can find Kerry snowboarding, watching The Office, or having passionate debates about which New England state is best (spoiler: it's Vermont).

32 thoughts on “An overview of the California solar mandate

  1. Sanjeev

    SunRun (Vivint Solar) is trying to charge my 18.K for 3.5kWh system, which should normally cost about 11-12K if I ask for a quote with Tesla or third party. How can we protest this price gouging for California citizens from the new home buyers in Merced CA area.
    Is there an option to reject what the builder is offering and can we go by our own solar company who install the same system for $6K less

    1. Jacob

      Im in a similar situation where they are quoting us $22.4k for a 4.55kw system for a total of $4.92/w before rebates. This is a development in Fairfield. Bummer that we can not shop around for installations on new developments. The only other option is to get into a 25year lease.

  2. Bernard Mendoza

    Can you please tell me if these regulations apply to plans for an ADU 850 square feet above garage in Pacific Beach area that were submitted before January 1st 2020 (they were submitted to the building department in December 2019). It took 15 months to get our permits (February 2021). The submitted plans received absolutely zero objections or changes. The length of time to get the permits we were told was because the building department moved offices in January 2020 only to find their new home had asbestos so that had to move out, then there was a back log and of course there was Covid.

  3. Bruce W

    Sunpower is gouging people because of this stupid mandate. If there’s a mandate like this, home buyers should be allowed to shop around. 17,000 for a 3.5kw system is ridiculous. Sunpower is so shady.

    1. Scott

      Hi Bruce,

      Is this part of a new build with a commercial home builder? or is it a one off custom home?

      If it’s with a commercial builder in a new development, there are likely some added costs..

      $17k for a 3.5kW system is definitely on the upper end.

      1. Jacob

        I don’t think its the solar providers but the builders marking up the cost of these systems. Since this was mandatory, these costs should be passed through with minimal markup.

  4. C R

    I am buying a new 1-story construction home and the home next door to the west is a 2-story. I have already noticed that my solar panels are covered by this other house by about 75% by 4pm. What should I be looking for as far as how much my panels need to produce per the new CA requirements.

  5. Shady Girl

    We are looking to build a home next year on a family lot in the woods. The lot is heavily wooded and the house will either be mostly in the shade or 4 months covered in snow. Are they going to make us cut down all the trees so the solar will actually work (which is a showstopper) or as you noted could we possibly get an exemption? How do we apply for the exemption? What are requirements for an exemption? Our builder is saying no exceptions. Maybe we need a different builder?

    1. Cory

      Shady… there is an exemption if you’re heavily shaded. You don’t need to cut trees down. But I would say with the cost of a PV system today, it’s ALWAY a good investment. 100% of the time. In California, if you own your rooftop, a solar PV system will save you money in both the short term and long term. Go with a solar-specific loan. You can talk to the building department.

    2. Philip Wang

      Hello did you ever figure out how to apply for an exemption? I have exactly the same question as you as we are building in a very shaded lot. Thanks.


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