CALIFORNIA’S SOLAR MANDATE Starting in 2020, every new home constructed in California will be required to have some form of solar capacity. While it should be noted that the requirement is not specifi- cally for each home to have its own onsite or rooftop solar system (cen- tralized or community systems are potentially allowed), this mandate is definitely a game changer for builders, homebuyers, mortgage lenders, and installers alike. Outfitting new houses with solar panels can be advantageous to buyers because home builders will be able to purchase at wholesale prices and install systems while homes are still under construction. Savings can be passed on to home buyers or at least be part of the new home sale negotiation pro- cess. When the market is strong,
builders can charge a premium and when sales slow down, buyers will be able buy at discount. Sounds fairly straight forward, right? Not so fast. RESIDENTIAL SOLAR COSTS In California, a typical system will add $8,400 to the cost of a new home, but save homeowners $35 a month in utility costs for an annual total of $420. Importantly, home buyers need not purchase such systems, they can also lease them. The California plan translates into big numbers. Roughly 58,000 new homes were built in the state during 2018. If we say that 58,000 homes will be built annually over five years, that’s 290,000 units. At $8,400 each, the cost for solar installations could total more than $2.4 billion. The annual savings
FEATURED ARTICLE
The New Solar Economy: A Hazy Path Toward Harnessing the Power of the Sun
AVERAGE FAIR MARKET RENT FOR A 3-BEDROOM IN CALIFORNIA
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W ith the ongoing certainty of sunrise, the use of renewable energy is becoming cheaper, more attractive, and more common. The promise of free fuel coupled with better technology is changing the energy economy by reducing our need for oil, natural gas, coal, and nuclear power. Every Tesla and Prius you see on the road, along with every wind farm, dam, and solar array you see or read about, represents less demand for traditional fuels. As these changes begin to take hold, it’s little wonder that the price of BY PETER G. MILLER, STAFF WRITER
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West Texas Intermediate crude fell from $141.95 a barrel in 2008 to just $55.80 in early March 2019. The essential benefit of re- newable energy – with sunlight virtually everywhere – is that it can replace much of the coal, oil, and natural gas we now extract, transport, and burn. The glob- al, political, and environmental implications are substantial and undeniable. After all, nobody wants another oil spill, or political conflicts over fuel. And, if energy costs can be reduced at the same
time, that’s a very pleasant bonus. But, how do we move forward in effectively harnessing the power of the sun? While the increasing use of renew- able energy is inevitable, the path forward is unclear. Yes, a lot of free fuel is out there, but there’s a huge difference between the promise of sunny days with billowing winds and the certainty of reliable power. At stake are future revenues and profits worth hundreds of billions of dollars as well as entirely new approaches to power generation and distribution.
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SOURCE: RENTDATA.ORG
6 think realty housing news report
may 2019 7
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