New California solar mandate means big business for integrated solar+roofing companies

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New California solar mandate means big business for integrated solar+roofing companies

The California Energy Commission’s new rule requiring solar to be installed on all new homes starting in 2020 will impact the solar industry as a whole in the biggest solar state in the union. But it may mean especially big gains for the companies already involved in both the new roofing construction and solar industries.

The rule applies to all new residencies and major home renovations on buildings under three stories. According to the New York Times, builders must either add solar to new individual homes or build a shared solar project serving a group of homes, with some exceptions. The minimum size of an array for a new build is 2 to 3 kW depending on the size of the home.

Some companies are well-positioned to get big business from this new mandate.
Manufacturer standpoint

Solar and roofing for new construction was already part of CertainTeed‘s portfolio, so this new mandate will increase the volume of jobs in California, but won’t change the company’s vision as a whole.

“I don’t think it’ll really significantly impact our business model,” said Chris Fisher, product manager for CertainTeed Solar. “What it might do is shift some of the focus and resources to try to address that sort of new market.”

The company manufactures roofing products and solar panels, and has a network of vetted local solar installers and roofers on hand to physically install both offerings. The company will leverage existing relationships with builders and solar installers to take advantage of the new mandate.

“Building off of that brand recognition and the existing relationships is the fact that builders in California can offer or can benefit from a combined roofing and solar warranty,” Fisher said. “So all the products on the roof are warrantied by one company.”

Fisher said California is a nationwide leader in sustainability, so this new mandate may have a domino effect across the country.

“We would expect and hope that this solar requirement is also adopted at some point by other states,” Fisher said.

He acknowledged that the mandate will increase the cost of new homes a bit, but he thinks the projections he’s seen so far in the news have been overblown. He believes people are forgetting that builders have a much lower cost for installing solar because there is no customer acquisition cost and they have the benefit of scale for designing, laying out and permitting.

“All of those costs, which are typically in a non-new construction setting which are individualized per project, can get aggregated and taken care of in bulk which inherently lowers that cost,” Fisher said. “I think it’s important to just make sure that people are understanding that it’ll increase cost, but not by as much as a typical retrofit solar installation.”

CertainTeed is looking forward to the new business that will come with this change. Fisher recognizes there will be a fair amount of competition as a result, but “we think it’s a good thing and we hope we can capitalize on it and use it to help grow our solar and roofing businesses.”

Solar Power World also reached out to roofing manufacturer and solar provider GAF but was told the company is “not commenting on the solar mandates at this time, but are continuing to watch it evolve.”
Roofing+solar installer response

PetersenDean is a roofing and solar installation company that works with manufacturers like GAF and CertainTeed to direct-purchase their roofing products. The company is also excited about the new mandate.

Gary Liardon, president of the consumer division at PetersenDean, said the company currently installs solar on roughly 10% of the new roofs it installs. When the mandate takes effect, that number will jump to nearly 100%.

“For us and our relationships with the builders, this is kind of an easy transition because we’re installing the roof and carrying a warranty on the roof for them,” Liardon said. He thinks builders will be more likely to choose PetersenDean’s combined solar+storage expertise rather than contracting two different entities to install roofing and then solar.

PetersenDean knew this new rule was coming, so in the past year the company has been planning how to expand its services. Since the required systems are quite small at only 2 to 3 kW, the key for PetersenDean is making sure the new systems are starting points that can easily be customized to fit a new homeowner’s specific needs.

“Solar’s the first half, but realistically, being able to kind of plug-and-play EV chargers and backup battery and other smart technology components—that’s really what we spent the most time on over the last nine to 12 months,” Liardon said.

PetersenDean wants to make sure that “what we install for the builder isn’t a hard-stop system. It’s not something that the homeowner, once in, can’t add to easily or can’t add to without significant cost,” Liardon said.

The company aims to satisfy home builders’ requirements while also ensuring it can right-size the designs for each specific homeowner.

The increase in California jobs will mean cross-training more employees to work on both roofs and solar at PetersenDean.

“A lot of the installers we have on the roofing side either are currently or are in the process of being cross-trained, so that once on the roof, they know how to do both things, so it’s really just another component,” Liardon said.

PetersenDean has done cross-training in-house for the past three years, so the added jobs “won’t stress our labor force dramatically,” Liardon said. Bringing in electricians to complete the wiring will take a bit more resources than cross-training workers on the roof to install modules while they’re up there.

The company hopes to see more solar mandates on new builds nationwide—and doesn’t think it will take long.

“I doubt, the way these things move, that it will take a decade for states like Florida and Texas to make that move,” Liardon said.

The companies already working in both solar and roofing or building construction should be able to easily adjust to the new mandate—and it will be interesting to see how all the other players line up to get a piece of the new pie.