Lawrence Berkeley National Laboratory

New homes provide a ready option for states hoping to reduce energy use, as evidenced by the steady increase in energy efficiency requirements in new home building codes. A less common approach is to specifically encourage or require new homes to produce their own carbon-free energy, through the installation of a solar energy system. Adopting these practices nationwide might significantly reduce new home energy use, but the drivers of the new solar home market have not been well studied. Partly filling this gap, this report looks at historical deployment trends of solar on over 500,000 new homes built through 2020 across 19 states and the District of Columbia, most of which were in California. California is a useful test case because if first incentivized in 2007, and more recently required in 2018, new homes to have solar. The report finds that solar adoption rates at roughly 40% in recent years in California eclipse—by a wide margin—rates in other states, which top out near 4%. The presence of California’s New Solar Home Partnership (NSHP) incentives appear strongly correlated with deployment levels, as do builder market share. The Top-10 builders in California installed solar in recent years at rates almost three times the average of non-Top-10 builders in the state. Interestingly, the authors found the same large builders did not install solar at the same elevated rates outside California, which might be related to the lack of incentives, they hypothesize. The report also investigates the characteristics of new solar homes such as living area (i.e., square feet), solar system size, frequency of battery installations, and use of third-party ownership. The authors also include quotes directly from builders to provide context to the findings.