California Sunshine Harnessed for Solar Power

Solar panel on a Meritage Homes property

Solar panel on a Meritage Homes property in California.

While Florida may be called the “Sunshine State,” the state of California is known for both its sunshine and its commitment to sustainability. New mandates that go into effect in California in 2020 require that all newly constructed homes must include solar panels or be part of a group of homes served by a solar power system.

“This is the first time renewable energy will be a requirement in a building code,” says CR Herro, vice president of innovation for Meritage Homes, which builds houses in nine states including California. “The goal is to have all newly built homes net zero ready through the reduction of demand for energy and the production of renewable energy.”

Net zero homes produce as much energy as they use. Solar power already provides nearly 16 percent of California’s electricity, according to The New York Times.

Solar panels and California housing

“California builders have started transitioning production to install solar panels on all their homes now in anticipation of the 2020 mandate,” says Gary Liardon, president of the consumer division of PetersenDean Roofing and Solar in Austin, one of the largest residential solar installation companies in the country. “Solar is one of the few things you can add for energy-efficiency that produce a measurable, positive impact.”

While Liardon says that consumer feedback on the mandate has mostly been positive, some people are concerned about affordability, particularly since California housing is among the most expensive in the country.

“The ability to keep costs low is important, but buyers need to understand that solar panels will produce energy and have a positive financial benefit over the long-term,” says Liardon. “At the same time, the mission is to build the solar system in a way to allow for future upgrades and so that they don’t become obsolete as technology changes.”

Depending on the size of the solar array and the house, adding solar power costs from $7,500 to $15,000 to install on a new house, says Jimmy Ayala, division president of Pardee Homes San Diego.

“Buyers, appraisers and loan underwriters need to be educated on the difference between ‘first cost’ and ‘total cost’,” says Herro. “Solar panels increase the first cost, but they reduce the total cost of owning a home. It would be great if underwriters could see, for example, that the homeowners will spend $40,000 less over the course of owning this house for decades because of its higher level of energy-efficiency and approve loans based on that premise.”

Solar power becomes standard feature in California

Even before the 2020 mandate was announced, Pardee Homes San Diego had begun work on Weston in Santee in eastern San Diego County, its first all-solar master planned community. When complete, Weston will have 415 single-family homes in four neighborhoods built by Pardee and TRI Pointe Homes Southern California, each with solar panels.

“Pardee built our first net zero house in 2003, which got the company started on our ‘Living Smart’ energy-efficient program,” says Ayala. “That program has evolved since then and includes solar panels, energy-efficient appliances, energy-efficient lighting, extra insulation and the use of recycled products.”

Until Weston, says Ayala, solar power has been an option rather than a standard feature for buyers because of price sensitivity. Approximately 10 percent of the buyers purchase or lease solar at Pardee San Diego communities, he says.

“Weston is further from the coastline so homeowners here need to use their air conditioning more often, so there’s even more interest here in solar to offset energy costs,” says Ayala. “All the houses are Living Smart homes and the community also has sustainable features including water conservation efforts and drought-tolerant landscaping.” 

The houses in Weston’s four neighborhoods range in size from 1,700 to 3,800 square feet, with prices from the $500,000s to the $800,000s

“At Weston there are 4Kw and 5Kw solar systems,” says Ayala. “Both are designed to deliver 80 percent of the electrical power needed for the home. If a customer’s typical electrical bill would be $200 per month, they would save approximately $160 per month on the bill.”

Meritage Homes has offered solar panels as an option on all their homes for the past eight years, says Herro. In addition, the company has built many solar and net zero communities across the country. 

This fall Meritage will have a grand opening for City Square, a community of 44 contemporary-style three-level townhouses in Irvine, Calif., all net zero homes. All of Meritage’s homes in Harvest Park in Northern California are solar homes, with buyers having the option to lease the solar system or buy it. 

“The California mandate just means we’ll provide solar panels as a standard feature on all homes in the state,” says Herro.

Solar panels can be purchased or leased

Homeowners can buy or lease their solar panels, which Ayala says is similar to buying or leasing a car.

“Buying solar panels adds to the upfront costs of buying the house, but once you have them there’s very little maintenance required,” says Ayala. “The alternative arrangement is for the solar panels to be on your roof but owned by the solar company. This lowers your initial start-up costs, but you have to pay the solar company a monthly rent. On the other hand, the benefit you get from the solar energy reduces your electricity bill, which offsets the bill to the solar company.”

While homeowners and the environment are anticipated to benefit over the long-term from the solar mandate, Herro and Ayala are concerned about potential initial disruption in the California housing market because of the expense of adding solar panels to new homes.

“We already have a severe lack of affordable housing in California and this will initially make new homes more expensive,” says Herro. “Unfortunately, this could inadvertently lead more people to buy a resale that’s more expensive to operate. Everyone needs to work on getting people to understand the total cost of homeownership and the benefit of buying a new house with solar power.”

Michele Lerner is an award-winning freelance writer, editor and author who has been writing about real estate, personal finance and business topics for more than two decades. You can find her on Google+.

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