It can be hard to keep up with all the dim policy proposals coming out of California, but this week’s bright idea would place already expensive homes even further out of reach for ordinary Californians. On Wednesday, the California Energy Commission is expected to approve new rules mandating solar panels on new homes beginning in 2020. California would be the first state in the nation to impose such a requirement.
While regulators and environmentalists pat themselves on the back, the costs of the new regulations will fall squarely on buyers of new homes. The agency estimates solar panels add $10,538 to the cost of a new home, and builders say accompanying energy-saving regulations on insulation, windows, lighting, and appliances could add an additional $10,000 to $15,000.
The move is no doubt a boon for California’s solar-energy industry, but no so much for the roofers, plumbers, police officers, and teachers who are increasingly finding it tough to live in a state that keeps devising new ways to drive real-estate prices higher. California’s median home price in 2016 was about $500,000 – more than double the U.S. average. The state’s fabled Hollywood starlets, tech moguls, and plaintiff’s lawyers might shrug, but millions of others are feeling the squeeze and leaving.
As if on cue, a new report on California’s economy out this month found the state is losing its luster: “The simultaneous rise in low-wage employment and loss of shares of middle- and high-wage employment paired with the rapid increase of housing prices since the Great Recession is severely limiting the ability of average Californians to maintain their quality of life, prompting an exodus.”
Supporters of the solar mandate say it will more than pay for itself through reduced utility costs. Even if that is true, why not let homeowners make that choice instead of the government?
The former president of the Orange County Building Industry Association got it right when he told the Orange County Register: “We’re not building enough housing already. Why not just pause for a little bit, focus on the affordability and housing issues, then circle back?”
If you’re perplexed by California’s poor choices, consider that the federal government offers a 30 percent tax credit for doing what California will likely soon require. In other words, one arm of government mandates it while another subsidizes it.
It brings to mind a line by a former California governor who jokingly summed up the government’s view of the economy: “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
