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California Becomes First State to Order Solar on New Homes
By Mark Chediak , Prashant Gopal , and Brian Eckhouse
May 9, 2018, 7:54 PM GMT+1 Updated on May 10, 2018, 5:00 PM GMT+1
Rule will cut emissions while also driving up home prices
U.S. residential solar market started slowing in 2017
The Way Humans Get Electricity Is About to Change Forever
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California just sent the clearest signal yet that rooftop power is moving beyond a niche market and becoming the norm.
On Wednesday, the Golden State became the first in the U.S. to require solar panels on almost all new homes. Most new units built after Jan. 1, 2020, will be required to include solar systems as part of the standards adopted by the California Energy Commission. While that’s a boost for the solar industry, critics warned that it will also drive up the cost of buying a house by almost $10,000. Solar shares surged on the decision. Homebuilders fell.
The move underscores how rooftop solar, once a luxury reserved for wealthy, green-leaning homeowners, is becoming a mainstream energy source, with California -- the nation’s largest solar market -- paving the way. The state has long been at the vanguard of progressive energy policies, from setting energy-efficiency standards for appliances to instituting an economy-wide program to curb greenhouse gases. The housing mandate is part of Governor Jerry Brown’s effort to slash carbon emissions by 40 percent by 2030, and offers up a playbook for other states to follow.
“This is massive,” said Morten Lund, chair of an energy storage initiative at law firm Stoel Rives LLP. “Essentially, this could turn residential solar into an appliance, like a water heater. There has always been a certain inevitability about that outcome, but this is moving faster than most of us thought likely.”
Perhaps the biggest winner will be San Francisco-based Sunrun Inc., the largest U.S. residential-solar installer. Oppenheimer & Co. raised its price target Thursday for the company to $12, from $10. “We see Sunrun as the biggest beneficiary considering its entrenched position in the state,” Sophie Karp, a New York-based analyst at Guggenheim, said in a research note.

Sunrun rose as much as 15 percent to $11.34 Thursday, the most intraday since November 2016. First Solar Inc., a U.S. panel manufacturer, gained as much as 6.3 percent. KB Home, which has significant exposure to the California market, fell as much as 1.7 percent
Great Unwinding
China will also return the favor -- Beijing has announced plans to target U.S. auto, aircraft, plastics and chemicals sectors -- and “the imposition of tariffs will not solve the underlying Chinese distortive behavior,” warned Linda Menghetti Dempsey, vice president of International Economic Affairs at the National Association of Manufacturers.
Instead of using tariffs, the U.S. could’ve sought to join with the European Union and Japan to bring a case against China at the World Trade Organization. But that’s unlikely after Trump slapped tariffs on EU nations and Japan, while also undermining the WTO. His withdrawal from the 11-nation Trans-Pacific Partnership trade deal removed another key device to alter China’s behavior.

Some prominent academics are calling for more drastic measures to undercut China’s practice of trading market access for technology transfers, such as unwinding Asian supply networks in high-end tech sectors.
Harvard Business School Professor Willy C. Shih favors tax incentives, and even setting up import processing zones in the U.S. to repatriate offshore suppliers for the likes of Intel, Apple and Microsoft. “It would strengthen our ability to sustain the most advanced semiconductor fabs in the United Sates,” Shih said.

In the end, the U.S. and China economic rivalry probably won’t be decided by administrative law judges or trade negotiators, but in the global marketplace. Right now, the U.S. still enjoys a lead in many tech and manufacturing sectors, particularly aerospace and biotech.
Yet the days when China could be dismissed as merely a low-wage assembly center for Western manufacturers are long gone. This is a country on what it views as a historic mission to become a 21st century economic power, and the contest is just beginning.
— With assistance by Lee J Miller
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