Solar Stocks Heat Up After California Votes To Mandate Solar Panels On New Homes

California approved regulations Wednesday requiring most homes constructed after Jan. 1, 2020, to be built with solar panels.

Why It’s Important

The news is a boon for solar companies, not only guaranteeing contracts but also validating the yet-nascent market’s move to become mainstream.

SunPower Corporation SPWR expects the change to boost California’s residential solar demand by 50 percent, according to Bloomberg.

Bloomberg estimates an increase in annual demand by about 260 megawatts. The state of California adds about 80,000 new homes each year, and about 19 percent are already built with solar panels.

Guggenheim Solar ETF TAN traded up 2.5 percent and related stocks similarly spiked:

• SunPower popped 5.2 percent;
• First Solar, Inc. FSLR 1.1 percent;
• Sunrun Inc RUN 2.6 percent;
• Vivint Solar Inc VSLR 4.7 percent; and
• Tesla Inc TSLA, which bought Solar City in 2016, spiked up 1.6 percent.

What’s Next

California is the only state to have mandated such energy-efficiency standards, and it remains to be seen whether peers will follow suit.

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