How California's residential solar mandate could misfire

Earlier this month, the California Energy Commission mandated that all newly constructed low-rise residential buildings must include solar power. 

Why it matters: While California prides itself on its leadership on climate change and innovative energy technology adoption, this decision is likely to misfire. Forcing people to install solar panels may actually exacerbate grid problems, creating negative secondary impacts without meaningfully greening the electricity system.

Most experts agree that the electricity grid will become more decentralized, with generation coming increasingly from customer-sited equipment. But even Elon Musk, a vocal proponent of solar roofs, believes that ultimately the grid will still get two-thirds of its supply from large, central generating plants, in part because electricity is much cheaper to produce at scale. Rooftop solar, given its cost disadvantages and small market share, is not the most cost-effective avenue to greening our electricity supply. 

In fact, in California, there is a mounting problem of too much solar during the sunniest parts of the day, which cannot then meet the system's demands when the sun goes down, barring expensive storage solutions. This means that the value of solar energy produced by these panels will actually decline as more are installed. 

Some experts also warn that the mandate will increase housing costs at a time when prices are beyond the reach of many lower-income people. It would be cheaper for homeowners, and more cost-effective overall, to focus on solutions to current problems, including well-placed storage that addresses the challenge of after-dusk solar supply.

The bottom line: The California Energy Commission has made a mistake. It makes sense to require new homes to be energy efficient and solar-ready, but California's climate goals would have been better served in this case by more informed regulation.

Ron Dizy is managing director of the Advanced Energy Centre at MaRS.