California requires a rooftop solar photovoltaic system on nearly every new home as a condition of the building permit, and for permits filed on or after January 1, 2026, the 2025 Energy Code sets the rules. The California solar mandate for new homes applies to single-family houses, low-rise multifamily buildings, high-rise multifamily buildings of four or more habitable stories, and most newly constructed detached accessory dwelling units.1California Energy Commission. 2025 Building Energy Efficiency Standards The system has to be sized so the home generates roughly as much clean energy over a year as it uses.
Which New Homes Are Covered
Single-family homes have been covered since the mandate first took effect in 2020. The 2022 Energy Code added high-rise multifamily buildings with four or more habitable stories to the list, and low-rise multifamily was already in.2California Energy Commission. 2022 High-rise Multifamily Solar PV In practice, almost every new residential project in the state now needs solar on the plans before the local building department will issue a permit.
A newly built detached ADU is covered too. The builder can either install a dedicated system for the ADU or add panels to an existing array on the main house, as long as the added panels are sized to code and sit on the same residential lot.3California Energy Commission. 2022 Energy Code Accessory Dwelling Units ADU FAQs
One boundary worth knowing: the mandate applies to ground-up construction. Renovations and additions to an existing home generally do not trigger it unless the project is effectively a teardown and rebuild.
How Big the System Has to Be
Two things drive the required solar capacity: the home’s conditioned floor area and the climate zone it sits in. California is divided into 16 climate zones running from the foggy north coast to the inland deserts, and a 2,000-square-foot home in the Central Valley will need a bigger system than the same home near the ocean because the cooling load and solar resource are different.4California Energy Commission. Climate Zone Tool, Maps, and Information Supporting the California Energy Code
A certified energy consultant runs the home’s specifications through the California Building Energy Code Compliance (CBECC) software, which models insulation, windows, HVAC, and projected electrical loads and then outputs the minimum solar wattage.5California Energy Commission. 2025 Energy Code Compliance Software For a typical single-family home, the required system usually lands somewhere between 2.5 and 4.0 kilowatts.
Battery Storage and Battery-Ready Wiring
How the code treats batteries depends on the building type. High-rise multifamily buildings of four or more habitable stories must have an actual battery energy storage system installed with the solar array under the 2025 Energy Code, sized to the solar installation, with at least 80 percent round-trip efficiency and a warranty covering 70 percent of nameplate capacity.6California Energy Commission. 2025 High-Rise Multifamily Battery Energy Storage Systems BESS
Single-family homes face a lighter standard: they must be battery-ready, not battery-equipped. The builder has to put in the infrastructure that makes adding a battery later a straightforward job. That means a main panelboard with a busbar rated at least 225 amps, interconnection equipment or a dedicated raceway from the main panel to a subpanel, at least four branch circuits that would be supplied by the future battery (covering, at a 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.
Doing the battery wiring during framing costs far less than retrofitting it into a finished home. And because California’s current export rates compensate solar sent to the grid at a small fraction of the retail rate, most energy consultants now recommend installing a battery at construction rather than treating battery-readiness as a check-the-box exercise.
When You Can Skip or Reduce the Solar
The code accounts for sites where rooftop solar does not make sense. The most common relief is the solar access exception: if permanent shading from hills, neighboring buildings, or protected trees blocks more than 30 percent of the available solar radiation on the roof, the required solar zone is reduced or eliminated. The shading analysis has to be documented with an approved tool and submitted on the compliance form.
There is also a small-roof exception for homes where the usable roof area that meets solar access thresholds is too small to carry a meaningful system. Even then, the code still requires a solar zone equal to half the eligible area. The specific thresholds shift with roof slope and orientation, so the energy modeler should run the numbers early.
Disaster Rebuilds
For years, homeowners rebuilding after wildfires faced the full mandate, and Governor Newsom vetoed proposed exemptions in both 2022 and 2024. 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 the requirement to install panels and batteries during the rebuild but still requires solar-ready construction so panels can be added later.8Office of the Governor. Executive Order N-29-25 If you are rebuilding after a qualifying disaster, confirm with your local building department whether the order applies to your permit.
Community Solar for Larger Projects
Developers of larger subdivisions and multifamily complexes can sometimes satisfy the mandate through a shared, centralized solar installation rather than panels on every roof. This can work when rooftop geometry is poor across many units but a common area or nearby parcel has good exposure. It requires formal participation agreements allocating energy credits to individual residents, and approval has to be secured before construction begins.
What the System Costs
As of early 2026, residential solar in California runs about $2.39 per watt installed. For a code-required system of 3 to 4 kilowatts, that is roughly $7,000 to $9,600 before incentives. Larger homes needing 5 or 6 kilowatts pay proportionally more. Those figures cover equipment and labor but not battery hardware, which adds several thousand dollars.
Builders usually fold the solar cost into the home’s purchase price, so buyers rarely cut a separate check. That bundling can obscure what you are actually paying, so ask the builder for a line-item breakdown that identifies the system size, panel brand, inverter type, and warranty terms.
Owning vs. Leasing in 2026
When solar is bundled into a new build, you may have a choice between owning the system (through the home price or separate financing) and a third-party-owned arrangement such as a lease or power purchase agreement. An owned system transfers automatically if you sell the home. A leased or PPA system remains the provider’s property, and selling the home requires the buyer to qualify for and assume the lease, which adds paperwork at closing.
The financial math shifted in 2026. The federal Residential Clean Energy Credit under Section 25D, which gave homeowners a 30 percent credit for purchased solar systems, expired on December 31, 2025. Systems placed in service in 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 makes the lease-versus-own decision look different than it did a year ago.
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 with the county assessor to reduce the base year value of the home by the value of the solar system, minus any rebates or tax 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 then keep the exclusion afterward, but the legislature would need to extend the statute for homes built after that date to get the same treatment.10California Legislative Information. California Revenue and Taxation Code Section 73
How the Utility Pays You for Exported Power
When your panels produce more electricity than the home is using, the excess flows to the grid. Under California’s current 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 for grid power, 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 with the previous NEM 2.0 framework. Exporting a kilowatt-hour of midday solar now earns far less than using that same kilowatt-hour at home. Storing daytime production in a battery and drawing it during expensive evening peak hours delivers much more bill savings than sending it to the grid, which is why battery-readiness becomes a real decision rather than a line item.
Permit Paperwork and Final Approval
Local building departments want specific energy compliance paperwork before issuing the permit. The core document is the Certificate of Compliance (Form CF1R) for residential projects, generated by a certified energy consultant using CBECC. It contains the full energy model output: solar wattage, inverter efficiency, panel orientation, and how the system interacts with the building envelope and mechanical systems.13California Energy Commission. 2025 Energy Code Compliance Documents – Forms for Single-Family Buildings
After the permit is granted and the hardware is installed, a Home Energy Rating System (HERS) rater visits the site to verify that the installed panels, inverters, and wiring match the CF1R. HERS documentation is mandatory to close the permit even when no diagnostic testing is called for.14California Energy Commission. Home Energy Rating System Program – HERS The local building official then performs a final electrical inspection. Compliance forms are logged in a state registry accessible to the builder, the building department, and the homeowner. The project can receive a certificate of occupancy only after those verification steps are recorded.
Utility Interconnection
Passing the building 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 qualifying residential systems typically clear in two to six weeks, and permission to operate usually follows the final electrical clearance within five to ten business days, with a stated maximum of 30 business days. Delays are uncommon for straightforward homes but can happen when the local transformer or distribution circuit is already saturated with solar. Submit the interconnection application as soon as the system passes inspection so there is no unnecessary gap between move-in and switching the system on.