Developers in California are navigating new regulations that require solar panels and energy storage on all new commercial construction, with some citing the measures as contributing to delays in the industry.
“Anything that adds to the cost of construction slows development, and these new rules add a lot of costs,” Jack Murphy, a construction foreman in the Bay Area, told The Epoch Times. “We run into problems with finding materials, and getting permits is more complicated than it was before.”
Applicable to all permits issued after Jan. 1, commercial buildings and apartments taller than three stories must include solar systems capable of meeting 60 percent of the building’s electricity loads—calculated by floor area, climate zone, and building type.
Exemptions include buildings with contiguous roof space smaller than 80 square feet and those located in areas that receive less sun where a system would produce less than four kilowatts of power.
Electric vehicle chargers are also now ordered to be installed in any lot larger than 25 spaces, and for those with more than 200 spots, approximately one-quarter of the spaces are required to have chargers installed.
“All of these things add up, and every developer is on a tight budget,” Mr. Murphy said. “There’s only so much money to go around.”
Solar mandates began in the Golden State in 2018, when state regulators approved a plan to require solar panels on new residential construction—including single-family homes, condominiums, and apartment buildings—no larger than three stories tall starting in 2020.
The codes were amended to include commercial structures and taller apartment buildings in 2021, which went into effect at the start of the year.
Critics suggest that the mandates are slowing efforts to address the state’s housing crisis with rules now governing larger apartment developments.
Lengthy delays with permitting are a recurring issue in the state, according to industry experts, with times varying based on municipal and county regulations. A recent study found that housing permits take on average 626 days for approval in San Francisco.
Proponents say the move is reducing pollution and creating less energy dependency.
Some local municipalities have enacted stronger ordinances than those mandated by the state, further complicating development decisions, according to experts.
For example, buildings larger than 400,000 square feet in Fontana, California—a city of nearly 200,000 people located in San Bernardino County—must offset 100 percent of their electrical load with renewables and require a larger percentage of electric vehicle chargers than does the state.
Such strict building codes disincentivize development, according to opponents, including the California Business Properties Association—a consortium of real estate industry representatives based in Sacramento, California.
They say the regulations are counterintuitive to the stated agenda of facilitating the construction of low-cost housing, a priority of the governor and Legislature.
California Gov. Gavin Newsom reiterated his commitment to building affordable housing in May by providing $567 million in the 2023–24 fiscal budget to fund construction.
“Despite challenging economic conditions, California is keeping our commitment to spur the development of needed housing in all 58 counties,” Mr. Newsom said at the time. “We’ll continue to provide major funding and resources, coupled with strict accountability measures, to tackle the housing shortage that threatens California’s growth and long-term prosperity.”
While noting the challenges the new rules present for developers, others say opportunities exist for landlords that have 100 percent renewable energy capacity. Such property owners can sell power to tenants at a discount from standard rates and keep the revenue.
No data are available, as yet, suggesting that construction has slowed because of the new regulations, but some experts believe that they’re playing a role.
“I don’t know if it’s the economy as a whole or these codes, but we’re seeing less new construction business and more remodels this year than in the past,” Mr. Murphy told The Epoch Times.
