Promote Solar on New Homes

Homeowners may be reluctant to install rooftop solar due to high upfront costs and difficulty obtaining financing. For new construction homes, financing is much simpler—the cost of the solar system is included in the mortgage. Some states do not currently have incentives or requirements for homebuilders to install solar on new homes.


For nearly a decade, the federal government offered a tax credit for energy efficient new home construction. The Energy Policy Act of 2005 established federal tax credits of up to $2,000 for builders if new construction homes met energy savings requirements. Specifically, new homes that saved 50 percent more energy than required by the 2006 International Conservation Code were eligible for the full $2,000. Homes achieving a 30 percent reduction were eligible for $1,000. The credit was extended several times, but ultimately expired in 2014.


A leader on this front has been the city of Lancaster, California. Led by a Republican mayor, the city adopted a requirement that all new-construction homes on lots of at least 7,000 square feet include a solar system of at least 1.0 kilowatt (KW). Subdivision builders can aggregate the requirement. For example, a ten-house subdivision could satisfy the requirement by building a 10-KW system on another site within the city. One goal of the requirement is to make the city attractive to solar innovators.


In San Diego County, California, the County Board of Supervisors has required that single-family home developers prepare new houses for both solar panels and electric vehicles (EV). New houses must be pre-wired for solar panels and EV chargers and must have electrical panels of at least 200 amps. These upgrades are estimated to cost between $300 to $400 per house.


Cities could demonstrate their commitment to solar by requiring builders to include solar systems on all new construction homes. Like Lancaster, cities could exclude houses priced for low- and middle-income homebuyers from this requirement. By passing such a rule, a city would send a signal that it is determined to be a solar leader. This would attract solar entrepreneurs and innovators, bringing investment and talent to the city.