September 4, 2018 | By RGR Marketing Blog

What the 2020 Solar Mandate Will Do For and To the Solar Industry

As reported in July on the RGR Marketing Blog, the California Energy Commission has ruled that just about all of the new homes constructed in the state—beginning in the year 2020—must come complete with rooftop solar. This effort, along with other ongoing initiatives to get the state of California more deeply into utility-scale solar and energy storage, will hopefully help to get the state to its proposed goal of getting at least 50% of the state’s energy from renewable sources by 2030.

But knowing that the state energy commission has issued this ruling and understanding what it may do to the solar installation industry in California (and beyond) are not one and the same. In this post, we take a deeper dive into the likely impacts—both positive as well as the more challenging ones—that the ruling will have over the years between 2020 and 2030.

Forecasting the Growth—What The Mandate Will Bring to Solar

According to researchers at GTM Research (and as reported on Solar Love back in May), California’s mandate to bring nearly all newly constructed homes into existence with solar power generation systems in place could mean as much as 14% growth in the home installation solar business in the state. The growth from mandated solar on new home construction alone could bring California’s solar business out of a two-year period of sluggish growth.

The reality could be an even greater upswing—depending on how much solar is eventually determined to be “enough” for each new home. Though the exact details of the mandate have yet to be worked out, most forecasters are expecting an $8000 to $9000 addition to the base home price associated with the cost of the solar installation.

Who Will Pay for All This New Solar in California?

So, who exactly will pay for all this new solar installation development in California?

Unfortunately, it remains to be seen how the state may incentivize all the new solar it’s requiring be a part of upcoming new home construction. If the total cost of the new solar power systems is to be born by those purchasing new homes, California may be in for a bit of a slow down in the new home construction market.

The $8000 to $9000 increase in cost may be almost insignificant when compared to the overall cost of a new home in some California markets, but in others, it may be enough of an increase to push potential new homebuyers into a different part of the market.

Regardless of what it may do to the California housing market, one thing remains clear. The solar installers with existing relationships with homebuilders will have an early advantage in snapping up all that expected solar growth. If you’re a California solar installer who hasn’t developed relationships with housing contractors in your area, the time is now to get to work.

As California Goes With Solar, So Goes…

It is no great secret that California is a bit of a bellwether state. When California goes a new policy direction, so do many of the other more politically progressive, environmentally conscious states—especially the ones in the West.

It isn’t always the case that Oregon, Washington, Colorado, New Mexico, and Colorado get into step behind what’s happening in California, but it often is the case that when one of these states breaks new (progressive) ground, the others follow suit. Hopefully, at least the sunnier states in the west will follow California’s lead on this issue and the future will keep getting brighter for solar installation.

Ready to pack your leads pipeline full of new prospects? If you’re in California, it may be time to get ahead of the competition when you buy high quality solar leads from RGR Marketing. Get in touch and dramatically increase your solar business’s bottom line today!

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