Last year, California became the first state to pass a law—which will go into effect on January 1, 2020—requiring builders to install solar panels on all new homes up to three stories tall. The impact to homeowners is obvious. Homes with solar technology typically sell for more than homes without solar panels, while energy costs decrease because the homes are more energy efficient.
But consumers aren’t the only group that will be affected. There are potential impacts for homebuilders and the mortgage industry as well. While California is the first state to require this type of action, there’s evidence to suggest that consumer demand for solar power is growing, representing an opportunity for homebuilders to invest in and incorporate solar technology in their building plans. In fact, homes with solar panels attract more potential buyers and sell faster than those without them, and homeowners are willing to pay more for homes equipped with solar capabilities.
As policy and consumer demand shift toward cleaner and more efficient energy sources the mortgage industry has a greater opportunity to include the cost of solar materials and installation in traditional mortgages. According to the Institute for Market Transformation, by incorporating energy audits into the building assessment and underwriting processes, mortgage lenders have a chance to not only increase their loan portfolios but also reduce the risk of default.
Whether you’re a builder getting ready to finance your next project or a homeowner looking to secure a mortgage for your next home, we can help. Give us a call today to learn more.