Gary Liardon | Courtesy a representative of PetersenDean Roofing & Solar

New Mandates and Incentives for Solar in California

Carrie Rossenfeld Residential & Mixed Use

The following article was written exclusively for SoCal Real Estate:

By Gary Liardon
Consumer Group Nationwide at PetersenDean Roofing & Solar

California is setting the new standards and bringing our country to the forefront of solar power. The state government recently adopted new policies that mandate solar for new homes and provide incentives for existing homes. As more national attention is focused on the growing importance of solar power, the energy-storage market is being driven by improved energy efficiency, the declining cost of solar equipment, and higher-capacity energy storage that is made possible by improved battery technology. We are indeed at the cusp of a new generation of intelligent energy production and use. I believe this new paradigm of energy partnerships is a win-win not only for solar energy providers but for people and the planet.

The most recent policy, SB 700, signed into law by Gov. Jerry Brown in September, extends California’s Self-Generation Incentive Program (SGIP) for an additional five years, from the current January 1, 2021, expiration date until January 1, 2026. SGIP provides substantial rebates to homeowners through the state Public Utilities Commission for the installation of energy-storage systems that save solar power for use during off hours such as evenings and cloudy days or during utility blackouts.

SB 700 comes in the wake of another far-reaching energy policy adopted earlier this year by the California Energy Commission (CEC) requiring that solar photovoltaic (PV) electric systems are installed on virtually every new residential dwelling built in the state starting in 2020. “California is about to take a quantum leap in energy standards,” states Robert Raymer, technical director for the California Building Industry Association. “No other state in the nation mandates solar, and we are about to take that leap.”

According to the California Solar & Storage Association (CALSSA), the bill is critically important for helping to meet the state’s clean-energy goals, addressing grid-reliability issues and protecting tens of thousands of solar jobs as so-called “time of use” rates hit consumer energy bills in 2019.

“We’ve come out by the hundreds from all over the state to speak directly with our elected officials about the urgency of supporting energy storage in California,” says Bernadette Del Chiaro, executive director of CALSSA, the bill’s sponsor. SB700 will do for storage what SB 1 did for solar over a decade ago — namely, create a mainstream market by driving up demand and driving down costs all while creating jobs and clean-energy choices for consumers.”

A grid-connected residential energy-storage system that synergistically combines solar and energy storage can also greatly reduce a homeowner’s operational reliance on the local electric utility. Simply put, batteries make it possible for homeowners to use stored solar energy, not only during the night and possible blackouts but also during peak demand times when utility rates are at their highest, thus keeping their monthly utility bills lower.

On a macro level, storage-battery technology offers electric utilities the opportunity to create a smarter power grid that, among other benefits, can give the utility better control over managing peak demand and thus reduce the need for new, extremely costly generation plants to cover that demand. Considering all the changes required by utilities and regulatory agencies as these entities respond to the new energy age, this transformational storage technology provides energy producers more creative ways to connect with homebuilders and homeowners, giving them greater control over their efforts to save money and help our environment by using more renewable energy.

California has been a leading proponent of solar power for the past decade with its goal of reaching net-zero energy usage by 2045. Committed to the long-term use of solar power, in May of this year the CEC took a major step toward achieving that goal and beyond by adopting a policy that will make solar-energy systems standard on virtually every new home built in California starting in 2020. It will apply to all houses, condos, and apartment buildings up to three stories that secure building permits after January 1, 2020. We expect other energy progressive states such as New Jersey, Colorado, and Virginia will follow California’s lead, especially as the cost of solar products decrease with increasing demand.

The new CEC policy focuses on four key areas: smart residential photovoltaic systems, updated thermal envelope standards (preventing heat transfer from the interior to exterior and vice versa), residential and nonresidential ventilation requirements, and nonresidential lighting requirements. The standards also encourage demand responsive technologies such as heat-pump water heaters, improvements to a building’s thermal envelope to enhance comfort and energy savings by inclusion of high-performance insulation and windows.

With the new standards in place, more-advanced solar products will become the norm as consumers expect optimum performance and maximum savings from their solar investments. Based on a 30-year mortgage, the Energy Commission estimates that although the new standards could add about $40 to a residential homeowner’s average monthly payment, they will save consumers $80 on monthly heating, cooling, and lighting bills.

Now, at this critical energy threshold, we in the solar and storage battery industries must collaborate via partnerships at the highest level to keep the momentum moving ahead. In the renewable-energy sector, the rapidly growing solar marketplace is without question making its mark within the global energy industry. We are indeed at the start of a new generation of energy and hopefully we will continue down that road, especially as other states hopefully follow California’s lead and adopt similar policies.