California Homebuilders Gear Up for 2020 Solar Mandates

Educating buyers will be critical to success

By MARK VOGEL

This is a big year for California homebuilders as they gear up for the 2020 mandates requiring all new single-family homes and multifamily housing to include solar. The mandates will apply to all new construction housing, up to three stories, that secure building permits after January 1, 2020. As the state presses forward with preparation for the mandates, there is a growing national focus on solar power as a real solution to climate change. Once California produces quantifiable and meaningful outcomes, we expect other states to adopt similar policies.

Specializing in new residential construction, we work with more than 300 homebuilders across the nation for both roofing and solar. We are extra busy helping our California clients with these mandates. One of the biggest challenges they face will be educating their buyers. Lack of knowledge and know-how could put the builder in legal jeopardy with construction defect and other litigation, which could be costly for both the bottom line and their reputation.

The more you know about solar and prepare for its installation, the better for your company and your customers. The message of sustain- ability does help sell homes, but how that message is communicated is important.

 

Why should buyers be excited about solar?

Solar saves the homeowner money. A solar powered home costs less to operate. Solar also adds value to the home, allowing it to sell more quickly and command a higher value. Thanks to shorter paybacks and great pricing, homeowners can reap all the benefits of solar. It’s a simple message for builders to communicate that buyers will appreciate: they will help save the planet and they will definitely save on their energy bills.

 

Purchase or lease?

We believe in making the solar experience as simple and cost-effective as possible for both the homebuyer and homebuilder. We work with builders on both the purchase and the lease options. There are practical differences in cost, maintenance, terms, opportunities for financial offsets, savings, returns on investment, tax credits, and other items that all have to be carefully explained to buyers whether it’s a lease or purchase.

 

What has to be communicated to the homebuyers?

Our solar systems cost about $.08 kWh with an average six-year payback. Homeowners usually want to see a comparison of the cost per kWh for solar vs. the price per kWh being paid to the electric company (this is an average in tiered rate structure). The great thing about solar electricity is that calculating costs and savings can be done on a per kWh unit basis using simple division. From there, it is very easy to demonstrate lifetime savings and payback time frames for each customer.

 

What do the formulas for savings look like?

We always advise against quoting actual savings to potential homebuyers. Each household has different habits and usage. Once a system is designed for a home, the homeowner is given the approximate energy that will be generated from their solar system. This number will give them the opportunity to look at a bill from their current home to see what they would have saved with solar. Thus, over the days, months, and years, the customer recoups the investment through the production offset and corresponding savings.

 

What are the payback periods for homeowners?

The payback periods have also dropped significantly and can be as little as three years. Residents of the top states in the index can see their investment would be completely paid back in four to six years.

 

What about resale values?

A solar powered home can add a tremendous amount of resale value to a home. People are keyed in to what solar energy does for their pocketbook and the efficiency of their home. If a buyer has to choose from a home that has low energy bills versus one that doesn’t, it’s an easy decision.

These are just a few of the main issues builders should be prepared to address, but there will lots of others. PetersenDean is one of the nation’s largest roofing and solar companies, so we have a large and well-trained labor force that continues to expand as we help builders with their solar programs. We will be offering training to builders’ sales staffs and weekend classes for builders’ buyers. Educating both will become extremely important to successful execution.

This knowledge base not only enhances the marketing and sales proposition, it improves a builder’s expertise in solar planning, budgeting, and construction. Builders who can demonstrate expertise in all aspects of solar and related systems will have a significant competitive advantage over builders who

are not as well prepared. Being solar smart can substantially boost marketing programs, promote sales and add to the bottom line. We believe solar will open new doors of opportunity for the homebuilding industry and also create new demands for competition and market positioning.

Mark Vogel is President and Chief Operating Officer at PetersenDean Roofing & Solar-Builder Division-United States.

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