Assessing the New Home Market Opportunity: Case Study and Cost Modeling for Solar and Storage in 2030
Residential solar and storage markets are growing in the United States. With approximately 1 million new homes constructed every year, this represents a significant opportunity for solar and storage installations. Some homebuilders have begun to build new homes with solar and storage included as a standard offering. It is not clear how solar and storage is incorporated into the new construction process and at what cost. Further, it is unclear what barriers or opportunities exist to scale this model nationwide. To fill this gap in the literature, this research conducts a case study of Mandalay Homes' new solar and storage community in Arizona to gather lessons learned. From this foundation, we further generate a set of pathways to reduce install costs and expand solar and storage market penetration in this sector. To model existing and 2030 solar and storage costs, we use the National Renewable Energy Laboratory's (NREL's) bottom-up cost model. This modeling is further informed by 12 interviews conducted with new home builders, solar contractors, and other subject matter expert organizations. Our case study analysis generated three key considerations for other homebuilders including: 1. Educating local permitting, inspection, and in some cases utility officials on solar and storage products, designs, and code compliant building practices may be required. The need for education may decline as more local governments and utilities review and approve solar and storage projects. 2. Incorporating solar and storage systems into the homebuilding process can add complexity and related coordination challenges. This does not need to result in home construction delays, but can result in costly contractor "dry runs" to construction sites. 3. Deploying solar and storage at the time of new construction has significant economies of scale, which can improve the value proposition of the systems. The case study, extant literature, and interviews were used to model both existing and future solar and storage installation costs at time of new construction. Here, we find three key cost reduction opportunities relating to solar and battery storage hardware, customer acquisition, and overhead. If future contractors can maximize the cost reduction opportunities outlined here, residential new construction costs could decline by 8 - 25% by 2030, depending on the modeled scenario. Though we expect costs to decline through 2030, it is unclear which of these scenarios may ultimately appear. Interviewees further identified a variety of barriers across each cost category that could temper the savings shown here. At the same time, interviewees described several pathways to scale the new construction solar and storage market, beyond installation cost savings. Interviewees confirmed that changes in finance, rate design, resilience policies, deployment mandates, and DER aggregation could all support more market adoption than seen today. These findings suggest that there are significant opportunities to expand new construction markets and this research can serve as a baseline to assess progress in this segment through 2030.
- Research Organization:
- National Renewable Energy Lab. (NREL), Golden, CO (United States)
- Sponsoring Organization:
- USDOE Office of Energy Efficiency and Renewable Energy (EERE), Renewable Power Office. Solar Energy Technologies Office
- DOE Contract Number:
- AC36-08GO28308
- OSTI ID:
- 1867584
- Report Number(s):
- NREL/TP-6A20-82511; MainId:83284; UUID:281f90a3-5015-4f32-ba4e-0278da77ef46; MainAdminID:64350
- Country of Publication:
- United States
- Language:
- English
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