Wave Solar’s Investigation into the 2019 California Title 24 Updates
San Francisco, CA - July 3, 2018 - California has long been a national leader when it comes to solar energy in the U.S. And we now have even more reason to be proud of our solar-friendly state. This past May, California made history by becoming the first state in the country to pass regulation that requires the addition of solar panels on all new low-rise residential buildings. This new regulation came in the form of updates to California’s 2019 Building Energy Efficiency Standards under Title 24, which take effect on January 1, 2020.
Our mission here at Wave Solar is to help solar installers grow their businesses, so we were thrilled by the CEC’s unanimous vote in favor of these new standards. However, we were still left with some questions. What exactly do these code updates mean for residential solar? To find out, one of our team members attended the “Solar in the 2019 California Energy Code” Solar Power Summit hosted by SEIA and SEPA in San Francisco this past Friday, where industry leaders offered insights on the new regulation.
A Quick Overview of the Updates and Solar Requirements:
Title 24 contains regulation that governs the construction of buildings in California. The 2019 updates to Title 24 define a range of new energy efficiency measures, but the residential PV requirement has definitely fostered the most attention.
The rules will apply to all new single family and multi-family residential buildings of up to three stories. New homes with three or less stories will be exempt if the building plans were approved prior to January 1, 2020, or if there is a substantial amount of shading due to external barriers. The new PV system does not need to be installed on the roof. In cases where there is inadequate on-site space available for a PV system, there will be options for community shared solar and energy storage systems. Builders will be able to use a combination of energy efficiency measures to achieve compliance.
Panelists at the conference agreed that although the new standards take effect on Jan. 1, 2020, we may not see the large jump in volume of new homes built with PV for another year or more after the effective date. This is because there will be a rush of building plans and permit applications submitted before 2020 under the current Title 24 standards. Nonetheless, we should expect to see a huge boost in rooftop solar installations from 2020-2023; SEIA and GTM research predicts 800 MW in additional demand for rooftop solar over the time span.
Current homeowners should not be affected, as the 2019 solar panel requirements will not apply to home remodels.
What Does This Mean for Installers?
Unsurprisingly, these updates to Title 24 offer a significant opportunity of growth for residential solar installers.
Every installer who spoke on a panel throughout the day talked with great enthusiasm about the new home market potential and the business opportunities that this new regulation is bound to provide. Sachu Constantine, the Regulatory Managing Director at Vote Solar, excitedly stated: “This standard will release all kinds of creative relationships - between installers, builders, financiers, consumers, and so on.”
One question posed during the event was, "Will home-builders start to take solar installation in-house?" All the speakers agreed that although it is possible, they did not see that shift happening soon. So for the foreseeable future, installation should be left to solar installers.
To tap into this new home market potential, installers may need to start making themselves attractive to home-builders. Both larger-scale and smaller-scale installers should find opportunities here. Panelists at the summit projected that high volume installers will look to partner with with the high volume home-builders, while low volume installers should find great opportunity in working with smaller scale home-builders or boutique home-builders.
Another opportunity for installers could be to capitalize on the growing energy storage business. With the new building requirements, battery storage systems can be combined with mandatory PV systems to achieve compliance credit. Melicia Charles, the Director of Public Policy at SunSun, mentioned that SunRun is going to start looking into offering solar energy storage options. Your company could look into doing the same.
Panelists did highlight one probable challenge with this new mandate: the need for a larger labor force. As residential rooftop installations notably increase following the year 2020, the solar industry’s workforce will similarly need to increase. However, this can also be seen as a great chance for our state to promote job creation.
We’re all in favor of normalizing residential solar. And this new regulation stands to do just that. Although the updated codes only apply to new residences, there will undoubtedly be a positive spillover effect into the existing-home market. The influx of solar panels on new homes will help make PV systems ‘the norm,’ which will in turn encourage solar sales with existing homeowners.
“Making a PV system as integral to a home as an HVAC unit, a dishwasher, or a microwave is critical in fostering innovation in the residential solar industry and encouraging new customers to consider solar,” stated Sean Gallagher, the VP of State Affairs with SEIA.
And as we all know, California’s progressive policies often serve as a template for other states. We wouldn’t be surprised to see other states adopt similar standards in the very near future.
Wave Solar’s Pact:
The best outcome of Title 24 is the projected increase in residential solar adoption. Wave Solar is excited to work with all our solar partners like you and provide your company with even more customer opportunities! We can’t wait to watch all of our partnerships with installers like you prosper as the solar energy market expands.
And if connecting with new home-builders in California becomes increasingly crucial to your installation business in the coming years, we will work to adapt our own business model to meet your needs. Nothing is more important to our team than making sure you’re always getting the most out of your partnership with Wave Solar.
Not partnered with Wave Solar? Don’t wait until 2020 to see your installation business grow. Sign up with Wave Solar today here.