California Will Require Solar Panels

Starting in 2020, The State of California will require solar panels be placed on all new construction, if a recent bill passes.   There are several reasons for this upcoming bill; including a reduction in greenhouse emissions, utility cost savings, and banking benefits.

In terms of greenhouse emissions, solar paneling is one of the best market producers, with the fastest improvement, in terms of total carbon use.  According to Euractiv, carbon footprints by life of the panels “range from 12 g per kWh for a facility using First Solar’s thin film modules, to as much as 24 g per kWh – for one using multi-crystalline silicon panels.”  This footprint is improving exponentially year over year, and soon solar may be able to compete with the efficiency of nuclear energy.  In comparison, according to Volker Quaschning, less modern fuels range from 20 g per kWh for natural gas, to 40 g per kWh for wood. If one is to look at the full life of these numbers, especially coal, we are likely to see several times that emissions from mining to transit.

Consumer savings, especially when tied to a mortgage, is another big reason California is looking to adopt a drastic change. According to the NY Times, “for residential homeowners, based on a 30-year mortgage, the Energy Commission estimates that the standards will add about $40 to an average monthly payment, but save consumers $80 on monthly heating, cooling and lighting bills.”  This is after an estimated initial cost between $8,000 and $12000 dollars.  The bill currently doesn’t have language detailing where inefficiency will excuse the builder.

This bill is supported largely by special interests associated with the solar energy field, as well as banks, but also by a healthy number of voters.  Objections to this bill include increased initial home costs, and an over investment as solar panel prices begin to drastically fall.  There is also the issue of an increase of market share very quickly, which could lead to an under-supply of materials used in solar construction.

This bill is a big step for California, and it will push consumers to make the environmentally and financially responsible decision to power their homes with solar.  What will be the effect on the economy? For that we will have to wait until 2020 to grasp the full price adjustment and externalities that will arise from such a drastic shift in policy.