San Francisco Law Boosting Solar Stocks
The San Francisco Board of Supervisors approved legislation Tuesday night that requires all new buildings of 10 or fewer stories in the city to include solar PV panels. The rule goes into effect on January 1, 2017, and buildings currently under construction that do not have solar panels will be required to add them retroactively.
Solar installation firm SolarCity Corp. (NASDAQ: SCTY) is seeing its stock rise 10% while Vivint Solar Inc. (NYSE: VSLR) traded flat in the mid-afternoon. SunEdison Inc. (NYSE: SUNE) is seeing a jolt of more than 16%, with competitors SunPower and First Solar getting a bump of around 3% or so.
Though not the first municipality in California to require solar panels, San Francisco is by far the largest city in the state to institute the requirement and the first major city in the United States to do so.
According to a press release from Supervisor Scott Wiener, who sponsored it, the legislation has the support of the San Francisco Commission on the Environment, the U.S. Green Buildings Council, the Building Inspection Commission and Brightline Defense.
San Francisco has adopted a goal of meeting 100% of its electricity requirement with clean energy by 2025. The state has mandated that 50% of the state’s electricity must come from clean energy by 2030.
Supervisor Wiener said:
Activating underutilized roof space is a smart and efficient way to promote the use of solar energy and improve our environment. We need to continue to pursue aggressive renewable energy policies to ensure a sustainable future for our city and our region.
Existing state law requires that 15% of the roof area of new small and mid-sized buildings must be “solar ready.” That means that 15% of the roof must be unshaded and free of obstruction. The San Francisco legislation goes to the next step of requiring that the 15% be covered with solar panels.