California has long led the way in U.S. solar power adoption, but even more homes will soon be powered by the sun thanks to new legislation. In May 2018, the California Energy Commission unanimously voted to require solar panels on all new homes and multi-family buildings built as of January 1, 2020. These residential solar power systems must be at least 2 to 3 kilowatts, depending on certain factors such as the size of the home.
(Note: At Reeco, the complimentary solar power systems that we provide to all home buyers and sellers are typically much larger than this minimum size—approximately 5 kilowatts. Our in-house solar team customizes every one for maximum output; each solar power system produces enough electricity to potentially cover the homeowner’s entire monthly electricity bill, and even sell power back to the grid, depending on individual homeowner energy usage habits.)
Builders are required to develop homes with individual solar power systems or build a shared power system for a group of homes. Homeowners can either:
- Buy their solar power systems when purchasing their homes;
- Or, pay a monthly fee toward a long-term lease or a power purchase agreement (PPA). (A kind of hybrid model between buying and selling, a PPA is a financial agreement where the developer finances and installs the solar power system, and then sells the power to the customer for a fixed rate during the life of the contract.)
While requiring solar power will increase the purchase price of California homes by approximately $8,000 to $12,000 (an estimated $40 per month over the course of a 30-year mortgage), homeowners are expected to save an average of $80 per month on their electricity bills. This means that they can save:
- $960 per year
- $28,800 over the life of a 30-year mortgage
For many homeowners, solar savings may be even higher—especially when taking advantage of Reeco’s Complimentary Solar Program for home buyers and sellers. “The average Orange County home buyer who works with Reeco to purchase their home saves $1,500 per year on their electricity bill, and receives nearly $30,000 worth of value,” explains Daniel Shaunt, Broker at Reeco.
Rather than passing the cost of the solar power system to home buyers, Reeco works with new home developers to offer complimentary solar to buyers of new construction homes before they are built (this is in addition to Reeco’s Residential Solar Program, which adds complimentary solar power systems to existing homes for buyers and sellers—ideal for those looking at California properties already built without solar).
When these new home developers utilize Reeco as the exclusive listing broker for their developments, Reeco provides each new property with a solar power system—at no additional cost to the developer or home buyers. We are able to do this by sacrificing part of our real estate agents’ commission to offset the cost of the solar power systems, as well as leveraging industry relationships and taking advantage of government programs and incentives. The result is thousands of dollars saved for each home buyer, as well as a huge cost savings to new home developers.
In addition to saving homeowners money, greater solar power production—through California’s new solar legislation and Reeco’s Complimentary Solar Program—is set to reduce greenhouse gas emissions by roughly 700,000 metric tons. This is the the equivalent of removing 115,000 cars from the road, according to the California Energy Commission.
Reeco’s research has determined that a typical 5 kilowatt solar power system can also save 32 trees and 4.8 barrels of oil per year. Conservation is a big selling point for all homeowners, even those unaffected by the California Energy Commission’s ruling.
“The benefits of solar aren’t just for new home buyers after 2020,” says Shaunt. “More homeowners are choosing to go solar because they’ve experienced significant increases in their electricity rates, and have seen how much their neighbors enjoy the savings and environmental benefits of self-generated electricity. The new state legislation just fuels this existing trend, and as California’s sustainable real estate company, Reeco is thrilled to see more home buyers and sellers save money while living healthier, more sustainable lives.”
Estimate how much money you can save with a
complimentary solar power system through Reeco,
as well as your annual eco-impact.