In early May, California became the first state in the country to require solar panels on all new homes, in an attempt to aggressively curb greenhouse gas emissions.

The California Energy Commission (“CEC”) adopted updates to the state energy code’s building efficiency standards requiring solar photovoltaic systems on newly constructed residential buildings with three stories or less, starting January 1, 2020.

The updated standards are expected to increase construction costs of single-family homes by an average of $10,500. These up-front costs are expected to be off-set by $16,000 in energy cost savings. It is also expected that the demand for solar equipment will rise between 10-15% under the updated standards.

The CEC commented that the standards are the first part of California’s overall policy sweep toward cutting its greenhouse gas emissions. Groups and companies including Tesla and Sierra Club of California spoke out in support of the new standards.

Homebuilders will pass on the cost to the consumer.  California homes are already the most expensive of any state, clocking in at $449,000 as a median home price, and the new solar requirement will increase the average cost of a home by approximately $30,000.

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