05/22/2018

As home prices soar, a California commission issues new solar-panel rule that will drive up the cost of new houses by as much as $30,000.

When one is trying to reduce the cost of something, imposing a mandate that increases its cost is counterproductive. The commission argues that it will add only around $40 a month in payments but will save $80 a month in utilities (based on a $9,500 installation cost). My calculations suggest it will add $50 to $150 a month for a 30-year loan, and $75 to $225 with a 15-year note. Lenders don’t factor utility costs, but they do factor mortgage amounts. This will cut more people out of the housing market, despite the fancy government math.

It’s particularly disturbing that state commissions can simply impose such a far-reaching and costly regulation by edict. California’s Legislature is run by representatives who have an equally strong environmental tilt, but it’s doubtful that such a requirement would have easily made its way throughout the entire process. Housing activists would have complained. Builders would have lobbied for amendments. The issue would have been widely discussed.

Instead, five largely unknown commissioners, appointed by the governor with little fanfare, announced the rule as part of building-code change.

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