Peninsula Real Estate Guide
California’s New Home Solar Mandate: What It Means for New Construction and ADU Buyers
Every new San Carlos condo and TJH rebuild already comes with solar. Here’s why, and what it actually means for you.
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2020 Mandate First Took Effect |
2.5 to 5 kW Typical Required System Size |
2023 Extended to New Detached ADUs |
NEM 3.0 Rules New Solar Connects Under |
If you’re buying new construction on the Peninsula, whether a downtown San Carlos condo or a full rebuild through a builder like Thomas James Homes, solar isn’t an upgrade you’re choosing. It’s a legal requirement baked into the building permit, and understanding why helps explain a real cost, and a real benefit, already built into the price.
California Was First in the Nation
Since January 2020, California’s Title 24 Building Energy Efficiency Standards have required solar photovoltaic systems on most new residential construction, including single-family homes and low-rise multifamily buildings up to three stories. California was the first state in the country to mandate rooftop solar on new homes, and the requirement has been refined in each subsequent code update since.
What Changed With the 2025 Code Cycle
The Code That Applies Depends on Permit Date, Not Construction Date
California’s updated 2025 Energy Code took effect January 1, 2026, and it applies based on when the building permit application was submitted, not when construction started or design work began. Projects permitted on or after that date must use updated solar sizing formulas and follow stronger encouragement, though not yet an outright mandate, toward pairing solar with battery storage for low-rise residential projects. High-rise residential and commercial buildings, by contrast, now face a genuine mandatory requirement for both solar and battery storage together.
How Big a System Does a New Home Actually Get
The required system size is based on a formula tied to the home’s conditioned floor area and its specific climate zone, typically resulting in a 2.5 to 5 kilowatt system for a standard single-family home. This isn’t a token symbolic array; it’s sized to meaningfully offset the home’s expected energy use.
Yes, This Applies to New ADUs Too
The solar mandate was formally extended to Accessory Dwelling Units in 2023. If you’re building a brand-new, detached ADU from the ground up, solar is required unless a specific exemption applies. Garage conversions and interior ADUs, however, are classified as alterations rather than new construction under Title 24, and alterations are not subject to the solar mandate. This is a genuinely important distinction for San Carlos homeowners weighing a garage conversion against a full detached new build.
The NEM 3.0 Connection
New homes built under today’s rules interconnect their required solar system under NEM 3.0, the current net billing tariff, which means their export credits run significantly lower than the more generous NEM 2.0 rates that applied to systems installed before April 2023. For new construction buyers specifically, this makes battery storage genuinely valuable, since the gap between using your own solar power directly and selling it back to the grid is larger than ever under current rules.
What This Means Practically
| A new condo or spec-built home’s price already reflects the cost of a mandated solar system; it’s not an optional add-on you’re paying extra for |
| If you’re building a detached ADU, budget for solar as part of the required scope, not a separate decision |
| A garage conversion ADU can avoid this requirement entirely, since it’s classified as an alteration, not new construction |
| Consider adding battery storage to any new solar system, given how much more valuable self-consumption is under NEM 3.0 |
Key Takeaway
Every genuinely new home or detached ADU on the Peninsula already comes with mandatory solar built into its permit. Understanding this helps you evaluate new construction pricing accurately and make a smarter decision about pairing it with battery storage.
Frequently Asked Questions
Do all new homes in California require solar?
Most new single-family homes and low-rise multifamily buildings up to three stories, yes, since January 2020, with some exceptions.
Does a garage conversion ADU need solar?
No, it’s classified as an alteration rather than new construction, which exempts it from the mandate.
Is battery storage mandatory for new homes yet?
Not yet for low-rise residential under current rules, though it’s strongly encouraged and already mandatory for high-rise and commercial buildings.
What rate does a new home’s solar system get for exported power?
NEM 3.0 rates, which are significantly lower than the older NEM 2.0 rates that grandfathered systems still enjoy.
| Related Reading | |
| Solar Panels and Home Value on the Peninsula: NEM 3.0 Explained | Understand the export credit rules new solar systems connect under. |
| New Construction vs. Resale on the Peninsula | See how this mandate fits into the broader new-build value proposition. |
| San Carlos’s ADU Boom: Real Local Costs and What They Can Earn | Factor solar requirements into your ADU cost planning. |
| The New Downtown San Carlos Condos | See this mandate reflected in a real, current new construction project. |
Considering New Construction or a New ADU?
I can help you understand exactly what’s already included, and what’s worth adding, in a new build.
Holly Noto | Coldwell Banker Realty | DRE#01244498, DRE#01908304
580 El Camino Real, San Carlos, CA 94070
650.544.6185 | [email protected]
Regulatory information reflects California’s Title 24, Part 6 Building Energy Efficiency Standards as of the 2025 code cycle effective January 2026. This content is not legal, engineering, or regulatory advice; confirm current requirements with a licensed solar contractor or the local building department.
