New Home Solar Penetration Rate Now More Than 20 Percent in California
From Renewable Energy World on July 20, 2016
Photo credit: Renewable Energy World
The California Energy Commission’s New Solar Homes Partnership (NSHP) program is helping to make new homes in California environmentally friendly, while reducing energy bills. The program, a component of the comprehensive California Solar Initiative (CSI), provides financial incentives and other support to builders, developers, and homeowners to encourage the construction of new, energy-efficient solar homes. The NSHP, which was launched in 2007, has a 10-year goal of installing 360 megawatts (MW) of new residential solar photovoltaic (PV) capacity in California. It aims to have at least half of all new homes include solar by 2020. As of January 2016, the program has installed or reserved funds for 141.8 MW of solar capacity. It has already helped boost the new home solar penetration rate in the state from less than 1 percent to more than 20 percent.
Maximum Efficiency, Maximum Impact
The NSHP focuses on new home construction as a way to lower the upfront installation costs of solar energy systems by incorporating these systems seamlessly into the design of a building and installing the PV system while all the other construction activities of the home are underway. The NSHP requires that projects meet minimum energy efficiency levels, which maximizes the project’s impacts: environmental benefits, market development, and cost savings for homeowners.
The NSHP’s performance-based incentives are based on the expected annual generation of the PV system weighted by its time-of-use value to the utility system. This encourages high-quality installations with optimal designs. To avoid incentivizing oversized systems, NSHP incentives are limited to the first 7.5 kilowatts (kW) of a PV system. The NSHP also takes into account and offers higher incentives for qualified affordable housing projects and for installations on buildings that achieve higher levels of energy efficiency.
NSHP incentives decline over time as cumulative MW capacity targets are reached. By allowing performance-based incentives to decrease alongside declining solar hardware costs, the NSHP maximizes the total number of incentivized solar systems and encourages the industry to rely less on incentives as solar costs fall and the market matures.
The Energy Commission has worked to administer the program efficiently and cost-effectively. The NSHP program may be one of the few solar rebate programs in California, if not the only one, that spends 100 percent of funds on solar system purchases and installation rather than subtracting 10 or 15 percent for administrative costs.
Market Development and Transformation
The NSHP program fosters a housing market in which builders routinely construct highly energy efficient homes and install solar energy systems as a standard feature. According to the California Building Industry Association, several major homebuilders began offering developments with solar as a standard feature in 2012, and “most, if not all . . . relied on NSHP incentive funding, which has provided key financial support in making a variety of business models work.” The program’s success has paved the way for cities, such as Lancaster and Sebastopol, to require solar on all new homes.
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