Assessing costs for future projects in California with a three year code cycle change is causing deal makers to miss critical budget forecasts. For example, a lack of understanding of code standards could add $2 million or more in envelope or HVAC system design for a typical multifamily structure. Mandatory solar photovoltaics are just one of the items that can result in costly redesign and construction hard costs if not planned properly. Here are 4 critical steps to plan for California’s solar mandate.
- Determine your solar kWh production budget
The minimum kilowatt hour production for a new low-rise residential building will be determined by the conditioned floor area of the home/unit and number of bedrooms. The location of the building or the climate zone also impacts the solar budget. For example, a building located in Costa Mesa (cooler climate zone) may require less solar photovoltaic production than a building located in Riverside County (warmer climate zone).
VCA Green has conducted several simulations across various climate zones, and the average kWh production for apartment buildings is 1.6 to 2.0 kWh per residential unit and 1.8 to 2.0 kWh for a 2,000 sq. ft. residential home. Our previous Blog post, Top 5 Things Developers & Designers Should Know about the California Solar Mandate, also addresses this topic.
Solar photovoltaic installation costs will vary from project to project, but projects can expect to pay approximately $4,000 per residential unit for a conventional system. This cost will be higher for single family homes.
Multifamily projects may tie solar production to the main/house meter; therefore, ownership would realize a return on their investment.
There are a few exceptions that will allow some projects to reduce or eliminate solar PV, so it’s important to ensure these are reviewed ahead of design; however, these exemptions are very difficult to trigger for most projects.
- Design the roof and site areas to accommodate solar
Solar photovoltaic systems require southern and western exposures to maximize production and return on investment. Solar arrays may be placed on east facing exposures, but the reason western exposures are chosen is because electricity rates are higher in the afternoon. You would want to utilize solar capture more so in the afternoon to offset peak rates. Eastern exposures may still be utilized to help with meeting solar PV budgets, though.
Running the solar budget numbers in Item 1 above, you can then determine how many panels are required for your project. Roof and/or carport orientations may need to be designed into early schematic drawings to ensure adequate compliance and potential for strong solar energy production. Further, ensure that solar panels will have three to five feet of clearance from roof edges and equipment for fire access.
- Consider a battery back up
Solar power can be captured and stored during off-peak times and then released into the building/site during peak times and/or when the sun has set. Adding a battery backup will likely extend the return on investment period depending on how much energy is consumed during evening hours. For projects with ample amenity spaces or parking garages with exhaust fans, realized ROI will be faster.
When a battery backup is added, a project may lower the amount of solar production required by code by 25%. This approach may be helpful when experiencing a lack of solar placement opportunity.
- Plan for technological changes and adjust budgets
If a year or more goes by from design to construction, you will want to review the efficiency of common solar panels because panel efficacy improves over time. For example, in 1992, solar panels were at 15.8%, and by 2015, panel efficiency was at 22.8%. As of July 2017, a prototype panel was developed to deliver 44.5% efficiency. Therefore, your project may be able to achieve its solar budget with fewer panels as panel efficiency improves.
The gross cost per watt by half-year has improved over time. In 2015, the cost per watt was approximately $3.79, and by 2019, that value dropped to approximately $2.96 per watt – a 22% savings in cost.
Luckily with regards to solar photovoltaic compliance and production, time is on your side. Planning early will help eliminate code related pitfalls, and a reevaluation of your system design closer to construction phase may allow you to redline your drawings to put more green in your pocket.
For more information on how to plan your PV system, contact VCA Green below.
Moe Fakih, Principal