California, long a trendsetter with its clean-energy goals, took a further giant step last month, becoming the first U.S. state to require all new homes to be equipped with solar power, beginning two years from now.
We can deride such a dramatic move as to be expected from this larger-than-life state; but California’s economic profile on the world scene continues to grow and how it handles green energy developments will be closely watched.
It’s also worth noting that the state of California is now the world's fifth-largest economy, overtaking the U.K. just last year.
Its economic output is exceeded only by the United States itself, China, Japan and Germany in that order. Interestingly, Russia lags in eleventh place, not producing anything that any other country would want to buy, other than oil and armaments.
California is now home to nearly 40 million people, just slightly larger than Canada at 35 million, but producing a 2017 GDP (Gross Domestic Product) of $US$2.7 trillion versus $US1.6 trillion for Canada, over 60 per cent higher.
This state benefits from the combination of a thriving technology sector centred in Silicon Valley, along with the world's entertainment capital in Hollywood, and the nation's salad bowl in the Central Valley agricultural heartland; not to mention a strong tourism culture.
Its superior economic performance is also driven by high worker productivity, through use of the latest technologies in the workplace.
California's economic might is concentrated in large population centres around San Francisco, San Jose, Los Angeles and San Diego. They attract businesses that tap deep pools of technical and creative expertise …. and workers enjoy a wide choice of job opportunities that help in their career development.
By the end of 2017 California was already the nation’s leader in installed solar capacity. Solar power currently provides 16 percent of its electricity, and the industry employs more than 86,000 workers in the state.
As for the impact of the state’s decision on the average household budget, it’s expected that a basic solar panel installation will add $8,000 to $12,000 to the initial cost of the average new home.
While this would add around $40 to the monthly mortgage payment, based on a 30-year mortgage, new homeowners are expected to save up to $80 on monthly heating, cooling and lighting bills. That prospect has won over the home construction industry, which now views solar installations as a profitable line of business.
It’s not a stretch to imagine new home developers adding to the solar energy package the latest electrical energy storage technology in the home, such as Tesla’s “Powerwall” for around $10,000. This would allow consumers to power the home during the days without sunshine and use the local power company as a “standby” supplier of last resort.
Another appealing aspect of this future scenario will be the ability to “charge-up” electric vehicles used by future families to commute to work or just get around town, at zero additional cost to the pocketbook. Our sun picks up the tab.
Of course, there will be concerns that China now dominates the solar panel manufacturing industry; six of the top 10 manufacturers are Chinese. This irks the likes of Donald Trump who would have stiff tariffs imposed on their products to protect the few domestic manufacturers, to the detriment of millions of U.S homeowners considering the solar alternative.
This game-changing move by the state will not be universally applauded, given the intrusion of government in the workings of the private sector economy, and in this case limiting the personal choice of citizens making as significant a lifetime purchase as a new home.
But to effect radical change it’s sometimes necessary to break some eggs and employ controversial means. In this California solar power example, they sought a solution to both reduce reliance on fossil fuels while exploiting solar power technology….and a mandatory imposition of solar power installations in new homes, though potentially unpopular, they believed would get the job done.
Alan Walter is a retired professional engineer living in Oxford. He was born in Wales and worked in Halifax. He spends much of his time in Oxford, where he operates a small farm. He can be reached at firstname.lastname@example.org.