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San Francisco now requires solar panels on new homes and buildings

SolarCity’s hometown market is getting more serious about boosting solar energy.

San Francisco last week became the first major city in the nation to require that solar energy systems be installed on all new homes and commercial buildings up to 10 stories tall that are built in the city. The solar arrays can be used to either provide electricity or heat hot water.

The requirement, approved unanimously by the city’s Board of Supervisors, gives a small, but visible boost to SolarCity, the solar energy installer based in nearby San Mateo that is the dominant player in the nation’s residential solar market.

California law already requires that all new small and midsized buildings have at least 15 percent of their roof area be “solar ready,” which means that portion of the roof is unshaded and free of obstructions. San Francisco’s new rule requires that those solar-ready spaces have solar energy systems installed.

The San Francisco requirement expands on a small but growing trend of cities taking a leading role in setting laws that mandate the installation of renewable energy or energy efficiency technology. Two other smaller California cities – Lancaster and Sebastopol – passed laws in 2013 similar to what San Francisco enacted.

San Francisco has a goal of meeting all of its electricity demand with renewable sources by 2025, and California, like New York, has set a mandate that the state’s utilities get half of their electricity from renewable sources by 2030.

The actual impact on installers, like SolarCity, is likely to be fairly modest, since the new law only applies to new buildings, but it still was greeted favorably by investors.

SolarCity’s stock has jumped more than 15 percent since the law was passed on Tuesday.