California Eases Up on Sweeping Solar Mandate for New Homes
(Bloomberg) -- California is backing away -- ever so slightly -- from its once-sweeping mandate requiring solar panels on virtually every new home.
The California Energy Commission voted unanimously in favor of a measure proposed by the Sacramento Municipal Utility District to allow homes to get power from solar farms instead of rooftop panels.
The move is a setback for Sunrun Inc., Vivint Solar Inc. and other panel installers betting on California’s mandate to boost sales. It also threatens to undermine a movement to make rooftop panels ubiquitous.
California’s mandate was unprecedented when enacted in 2018 as part of former-Governor Jerry Brown’s effort to slash California’s carbon emissions. It requires most new homes starting in 2020 to include solar arrays. Builders and others have warned it could drive up the cost of buying a house by almost $10,000.
Vivint fell 6.7% to $11.99 at 12:13 p.m. in New York, while Sunrun slipped 4.5% to $22.34.
The rule includes a provision that allows utilities and others to propose programs for new homes to forgo rooftop panels and instead get power from “community solar” farms, which are generally smaller installations close to customers they serve. Critics argued the Sacramento utility’s initial proposal shouldn’t have been considered “community solar” because the power plants were too far away or too large.
In response, the utility, known as SMUD, proposed that homes be allowed to get electricity from a 13-megawatt solar plant scheduled to be completed in November near Sacramento.
“Both rooftop and community solar have benefits, but at the end of the day, they both reduce carbon,” Steven Lins, SMUD’s director of government affairs, told the commission.
Solar advocates argued that the revised proposal still violated the intent of the state’s rooftop solar mandate, which called for new homes to generate their own energy. And they expressed concern that other California utilities would follow SMUD’s path. Both PG&E Corp. and the Los Angeles Department of Water and Power supported the proposal.
“This is not solar versus solar -- it’s smart buildings of the future versus dumb buildings of the past,” said Bernadette Del Chiaro, executive director of the California Solar & Storage Association.
Commissioners said SMUD’s revised program could serve as a useful tool as California searches for ways to slash greenhouse gas emissions, not just from individual homes but multifamily buildings that may be ill-suited to rooftop arrays.
“We wanted the marketplace to figure out how to get this done,” said Commissioner J. Andrew McAllister. “We wanted to see innovations.”
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