California requires a solar photovoltaic system on nearly every new home as a condition of the building permit. The rule first took effect for permits filed on or after January 1, 2020, under the state’s Building Energy Efficiency Standards in Title 24, Part 6 of the California Code of Regulations. The California Energy Commission updates those standards every three years, and the 2025 Energy Code governs permit applications filed on or after January 1, 2026.1California Energy Commission. 2025 Building Energy Efficiency Standards The California solar mandate for new construction is designed so that each new roof generates roughly as much clean electricity in a year as the home consumes.
Which New Homes Are Covered
The mandate applies to almost all newly built residential structures. Single-family homes have been covered since 2020. Low-rise multifamily buildings of three stories or fewer were covered from the start, and the 2022 Energy Code extended the requirement to high-rise multifamily buildings of four or more habitable stories.2California Energy Commission. 2022 High-rise Multifamily Solar PV In practice, virtually every new residential project in the state now needs a code-compliant solar design.
Newly constructed detached accessory dwelling units also fall under the rule. A detached ADU must include its own solar PV system unless an exception applies, though builders can satisfy the ADU’s share by adding correctly sized panels to an existing array on the same lot.3California Energy Commission. 2022 Energy Code Accessory Dwelling Units ADU FAQs
One important boundary: the mandate applies to ground-up construction. Renovations and additions to existing homes generally do not trigger the solar requirement unless the project is a full teardown and rebuild. Figuring out which category your project falls into matters early, because the local building department will not issue a permit for a new home without a compliant solar plan.
How Big a System You Need
Required system size depends on two things: the home’s conditioned floor area and its climate zone. California is divided into 16 climate zones running from the foggy northern coast to the inland deserts.4California Energy Commission. Climate Zone Tool, Maps, and Information Supporting the California Energy Code A 2,000-square-foot home in a hot Central Valley zone will need a larger system than the same house near the coast, because cooling loads and solar resource profiles differ.
Designers run the home’s specs through the California Building Energy Code Compliance (CBECC) software, which the Energy Commission maintains.5California Energy Commission. 2025 Energy Code Compliance Software The model accounts for insulation, windows, HVAC, and projected electrical load, and outputs the minimum required solar wattage. For a typical single-family home, the required system usually lands somewhere between 2.5 and 4.0 kilowatts.
Battery Storage Requirements
The code treats storage differently by building type. High-rise multifamily buildings of four or more habitable stories must include actual battery energy storage systems under the 2025 Energy Code, sized against the building’s solar installation. Each battery must deliver round-trip efficiency above 80 percent and retain at least 70 percent of its nameplate capacity under warranty.6California Energy Commission. 2025 High-Rise Multifamily Battery Energy Storage Systems BESS
Single-family homes must be battery-ready, even if no battery is installed at construction. The readiness package includes a main panelboard with a busbar rated at a minimum of 225 amps; interconnection equipment or a dedicated raceway from the main panel to a subpanel; at least four branch circuits supplied by the future battery (covering, at minimum, the refrigerator, egress lighting, and a sleeping room outlet); and reserved space within three feet of the main panel for a future transfer switch.7California Energy Commission. 2022 Single-Family ESS Ready These requirements do not apply to additions or alterations.
Adding a battery later to a home that was not made ready costs far more than including it at build. Given how the state now compensates exported solar power (discussed below), many buyers install a battery from the start rather than treating readiness as the end of the story.
Exemptions and Alternatives
The code recognizes that not every roof works for solar. The most common carve-out is the solar access exception: if permanent shading from hills, neighboring structures, or protected trees blocks more than 30 percent of the available solar radiation on the roof area, the solar zone requirement is reduced or eliminated. The shading analysis has to be documented with approved tools and submitted on the compliance form.
A small-roof exception applies when the usable roof area meeting solar access thresholds is too small to support a meaningful system. In that case the requirement is reduced, though a solar zone equal to half the eligible area is still required. Thresholds vary with slope and orientation, so it pays to work through the numbers with the energy modeler during design.
Disaster Rebuilds
Homeowners rebuilding after wildfires or other disasters faced the full mandate for years. Executive Order N-29-25, signed in July 2025, created a narrow exemption for homes substantially damaged or destroyed in declared emergencies. The order waives installation of solar panels and battery storage during the rebuild, but the home must still be built “solar ready” so panels can be added later.8Office of the Governor. Executive Order N-29-25 If you are rebuilding, confirm with your local building department whether the order covers your permit.
Community Solar for Larger Projects
Developers of larger subdivisions and multifamily complexes may sometimes satisfy the requirement through a centralized shared installation instead of panels on every roof. This works when rooftop geometry is poor across many units but a common area or nearby parcel has good solar exposure. Formal participation agreements are required so energy credits reach individual residents correctly, and approval must be obtained before construction begins.
What It Costs
As of early 2026, installed residential solar in California averages about $2.39 per watt. A typical new-construction system in the 3 to 4 kilowatt range works out to roughly $7,000 to $9,600 before incentives. Larger homes needing 5 or 6 kilowatt systems pay proportionally more. Those figures cover equipment and labor but not battery hardware, which adds several thousand dollars if installed at the outset.
Builders typically bundle the solar cost into the home’s price, so buyers rarely see a separate line. Ask for a breakdown anyway. Knowing the system size, panel and inverter brands, and warranty terms tells you what you are actually buying.
Owning vs. Leasing the System
Builders often offer a choice between an owned system (paid for through the home price or financed separately) and a third-party arrangement such as a lease or power purchase agreement. Owned systems become part of the property and transfer with the home at sale, much like the HVAC or roof. Leased and PPA systems remain the property of the third party, and selling the home means the buyer has to qualify for and assume the contract, which adds paperwork to closing.
The math changed sharply in 2026. The federal Residential Clean Energy Credit under Section 25D, which provided a 30 percent tax credit for homeowner-purchased systems, expired on December 31, 2025. Systems placed in service during 2026 or later do not qualify.9Internal Revenue Service. Residential Clean Energy Credit Third-party-owned systems may still qualify for separate commercial clean energy credits under Section 48E, with some of that value passed through as lower monthly payments. That shift makes leasing more attractive relative to owning than it was a year ago for some buyers.
Property Tax Treatment
California law excludes the value of an active solar energy system from property tax reassessment. Under Revenue and Taxation Code Section 73, installing solar on a new or existing home does not count as “new construction” that would raise your assessed value.10California Legislative Information. California Revenue and Taxation Code Section 73 For a new-build, the initial purchaser can file for the exclusion with the county assessor to reduce the home’s base year value by the value of the solar system, minus any rebates or credits received.11California State Board of Equalization. Active Solar Energy System Exclusion – Forms
Section 73 is currently set to expire on January 1, 2027. Systems that qualify before that date continue to receive the exclusion after the statute sunsets, but the legislature would need to extend the provision for homes built afterward to get the same treatment.10California Legislative Information. California Revenue and Taxation Code Section 73
How You Get Paid for Extra Power
When your panels produce more than your home is using, the excess flows to the grid. Under California’s Net Billing Tariff, sometimes called NEM 3.0, the utility compensates you for exported power at “avoided cost” rates set by the California Public Utilities Commission.12California Public Utilities Commission. Net Energy Metering and Net Billing Those rates are almost always well below the retail rate you pay when importing from the grid, though they can spike above retail on high-demand summer evenings.
Export compensation under the Net Billing Tariff dropped roughly 75 to 80 percent compared to the previous NEM 2.0 framework. Consuming a kilowatt-hour of your own solar during the day, or storing it for evening use, is worth substantially more than exporting it. That is why storage now sits at the center of residential solar economics in the state, and why battery-readiness on a single-family home is often worth acting on rather than leaving as future infrastructure.
Permits, Inspection, and Turning the System On
Building departments require specific energy paperwork before issuing a permit. The core document is the Certificate of Compliance, Form CF1R for residential projects. It carries the full energy model output: solar wattage, inverter efficiency, panel orientation, and how the system interacts with the home’s envelope and mechanical systems. A certified energy consultant produces the CF1R using CBECC.13California Energy Commission. 2025 Energy Code Compliance Documents – Forms for Single-Family Buildings
After the panels go in, a Home Energy Rating System (HERS) rater visits the site to confirm the installed hardware matches the CF1R. HERS documentation is mandatory even when no diagnostic testing is required for a particular measure.14California Energy Commission. Home Energy Rating System Program – HERS The local building official then performs the final electrical inspection. Compliance forms are stored in a state registry that the builder, building department, and homeowner can access. The certificate of occupancy comes after those verification steps are logged.
Grid Interconnection
Passing inspection is not the last step. The system also needs interconnection approval from the serving utility before it can legally export power. Fast-track applications for standard residential systems are typically processed within two to six weeks. Permission to operate usually follows the final electrical clearance within five to ten business days, with a stated maximum of 30 business days. Delays occur mainly when the local transformer or distribution circuit is already saturated with solar. Submit the interconnection application as soon as the system passes inspection to keep the gap between move-in and full operation short.