Those of us who use electricity have been encouraged to use solar energy to save the environment and to save money on our electricity bill. Now, California has taken it a step further and passed new regulations that require solar energy to be installed on all new homes or apartment buildings three stories or less beginning in 2020. What will this do to the California housing industry?
It is expected that the cost to install solar systems will be about $10,000 per home. It will also add about $20,000 to $30,000 to the cost of an apartment. So, in the state that has the highest housing prices in the nations, the cost of building has just gone up $20,000 to $50,000.
Will Owners Save Any Money?
This is a major cost increase. Supporters of this decision feel that the owners of the structures will make this money back on their energy bills. However, this is already proving not to be the case now. Currently, the energy company will pay 2-4 cents per kilowatt-hour for any energy they use in their system. However, there is no energy generated on cloudy days or at nights. So, those with solar energy use local power every day. During the week, the highest prices are charged by the utility for evening use of power. All power companies today no longer charge just one price. They price based on the demand. Highest demand is in the evening and on cloudy days. Energy costs about 25 cents per kilowatt-hour at lower demand rates.
Is the Power Company Making Any Money?
Simply put, many solar users are not saving money on their electricity use anymore. Plus, the energy company does not buy energy from solar panel users at all, even if they install a battery to store power for use in the dark. Nor can the power company store any energy for later use. That is why there are brown-outs on hot days. Plus, there are complaints from users that they are forced to pay more for their electricity because the power company must do something with all this extra energy. California’s energy company pays other states to take this extra power to keep the system intact. They charge about $25 per kilowatt-hour for helping. The states of Arizona, Nevada or Colorado then offers this energy to its users for free. Yes, they use it for free. The Los Angeles Times did an extensive article on this problem with solar energy.
The Future of this Mandate
So, the owners who put in solar power in 2020 will not likely make their money back during the life of the solar power equipment they are installing. In fact, the power grid cannot really handle much more solar energy in its current system. Therefore, many opponents are trying to change this mandate.
In the meantime, California is also pushing cities and the building industry to provide more affordable housing to keep young families in the housing market. Adding more to the cost of housing due to solar panels is at cross purposes with this goal.
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