California residents usually pay high electricity rates, costing around $272 per month. Residential energy rates have increased 16% since 2021 and could continue to go up. The average monthly solar energy cost is $77.70. By switching to residential solar panels, you could save an average of $2,340 each year.
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Solar power in California
California is the nation’s leader when it comes to solar energy, producing almost 30% of the country’s total solar power. California began promoting solar energy in 1976, much earlier than many other states.
In the past decade, a rising number of homeowners in California have invested in residential solar panels for their properties. Curious about solar panels in California? SaveOnEnergy explains the cost of solar panels in California, solar rebates and incentives, and why so many California residents have turned to solar energy for their homes.
California solar panel cost
Several factors contribute to the cost of home solar panels in California, including the system size, components, installation costs, and local fees and permits. According to Lawrence Berkeley National Laboratory’s Tracking the Sun report, in California solar panel system price per watt ranges between $3.05 and $4.63 per watt, with system sizes ranging from 3.7-kW to 8.6-kW, resulting in a system cost range between $11,361 and $39,975. The California median solar panel system price per watt is $3.87, and median system size is 5.7kW, resulting in a $21,935 median system cost. However, there are several solar incentives and tax credits available to bring the total cost down, including the 30% federal solar tax credit.
There are also a variety of financing options to help make the transition to solar energy more affordable. You can buy your solar system outright, but many homeowners choose to finance it through a solar loan. You can also lease your solar system or sign a solar power purchase agreement (PPA).
Price Per Watt
System Size (kW)
California solar panel incentives or rebates
A residential solar system is a big investment. Thankfully, there are incentives, rebates, and tax credits in place to lower the total cost. The federal solar tax credit — also called the Residential Clean Energy Credit — offers a 30% tax credit on solar systems installed through 2032, with a slight decrease in 2033 and 2034.. There is no cap on the amount you can claim, so you can take advantage of the solar tax credit regardless of the size of your solar system.
This program offers rebates to residences and businesses that install energy storage systems.
California Solar Rights Act
This legislation prevents HOAs from prohibiting solar system installations in neighborhoods.
LADWP - Non-Residential Energy Efficiency Incentive Program
Under this program, commercial properties can receive a range of customized incentives when they install solar systems on their properties.
Net Metering Programs
California offers net metering programs, which allow consumers to sell excess solar energy that they generate back to the power grid.
Federal Solar Tax Credit
The solar tax credit offers 30% of the total cost of a solar system back as a federal income tax credit for consumers who purchase and install a solar system on their primary or secondary residence.
Why choose California solar power?
There are many reasons why California residents choose to power their homes with solar energy. In the last decade, the cost of solar panels has decreased while the panel technology has improved. Most consumers who choose solar are drawn to lower energy costs, increased independence from the power grid, and wanting to live a more environmentally friendly life.
Lower energy costs
Installing solar panels can significantly reduce your energy costs. In recent years, electricity rates in California have risen steadily, with an 82% increase in the last 10 years and an average 3%-4% increase annually. California tends to have some of the highest electricity prices in the nation, which is why so many residents are turning to solar as their primary source of power. As long as your solar panels generate energy, your home will be powered by solar power instead of relying on electricity from the grid. As a result, your electricity bill will go down. California consumers could save thousands each year in energy costs by switching to solar energy compared to a traditional California energy bill.
Increased energy independence
By using solar panels to power your home, you can lower your reliance on the power grid and increase your home’s energy independence. Your home solar panels will generate electricity for your home, so you’ll be less subject to rising electricity rates during times of high demand. Most homeowners who buy solar panels remain connected to the grid so they can still draw power at night or when the sun isn’t shining. If you choose to install a solar battery as a backup source, you may also be able to protect yourself when there are power outages in California. This will depend on the solar battery you choose, as not all solar batteries are able to retain power when there is an electrical outage.
Solar panels aren’t just friendly to your wallet — they’re also beneficial to the environment. Solar energy is a renewable power source, meaning it leaves a much smaller carbon footprint than traditional power sources like gas and coal. When you power your home with solar energy, you can lower your environmental impact because solar energy doesn’t emit the greenhouse gases that contribute to climate change.
Should I buy or lease my solar panels in California?
When you install solar panels on your home, you’ll have the option to either buy or lease the system. When you buy the solar panels, you can pay upfront or finance the system over a period of time outlined in your financing agreement.
Solar leasesare another option that can seem attractive because leasing reduces your upfront cost and ensures you won’t be responsible for any future repairs. But there are some downsides to consider as well.
First, when you lease your system, you will always have a payment and will never own your system outright. Additionally, a leased solar system won’t increase the resale value of your home. In fact, it might make it more difficult to sell your home if you were to move, since buyers would have to agree to take on your lease payments. Finally, homeowners who buy their solar panels will experience more energy savings over time than those who lease.
California is a leader in solar power, with a growing number of solar panel companies operating across the state. Solar installers can create a customized solar system that works well for your home and energy consumption. SaveOnEnergy is an independent energy marketplace. We can help you shop for electricity plans as well as renewable options in your area. We work with top-tier solar companies offering leading solar products for consumers in California. If you are ready to connect with a California solar installer, SaveOnEnergy can help. Fill out this form or give us a call at 866-420-6556.
The history of solar power in California
Solar energy in California dates back to 1976 when the state passed a law to create financial incentives for investments in solar technology. Just a few years later, the state passed a law preventing neighborhood associations from banning solar systems.
In 1996, California strengthened its commitment to green energy with the passage of the Electric Utility Industry Restructuring Act. In addition to deregulating the energy industry, it also enacted net metering policies that let customers sell extra solar energy back to the grid.
California has continued to invest in solar energy in recent decades, going so far as to require that all new homes built have solar panels. Because of these progressive policies, California has a very high rate of residential solar power generation. The state also has experienced significant investment from utility companies and a rise in solar farms across the state.
Important solar installation factors to consider
Before installing solar panels on your property, there are several factors to take into account because they can impact the effectiveness of your solar system. A few of the most important considerations include:
The age, angle, and condition of your roof. According to the U.S. Department of Energy, solar panels are most effective on south-facing roofs with slopes of between 15% to 40%. They may not be well suited to older roofs that will need to be replaced in the near future.
How much sun your home receives. California gets more sunshine than many other states, making solar power particularly attractive. But it’s important to consider how much sun your home receives in your location. If your roof is under complete shade, your solar panels will not generate as much electricity as they would if they had direct sunlight throughout the day.
HOA and neighborhood rules. In some states, HOAs and other neighborhood associations may have restrictions around the installation of solar panels or require prior approval. However, California law prevents HOAs from banning solar panels, so just be sure to follow any requirements and approval processes outlined in your area.
California solar power FAQs
The price of a solar system can depend on factors such as its size, configuration, and labor costs. The average price is anywhere from $11,160 to more than $46,500 before accounting for any tax credits or other incentives.
Solar power can be an excellent investment, especially if you live somewhere with plenty of sunshine, such as California. Not only will you lower your monthly electricity bill, but you can also increase the resale value of your home. In California, you will be exempt from increases on your property tax if you install solar panels on your home, which has incentivized many homeowners.
The amount you can save by using solar panels depends on factors such as your electricity rates, how much sun your home gets, and the amount of energy you normally use. Based on the average traditional electricity rate in California, residents who power their homes with solar panels could save more than $100 every month on energy costs
Traditional electricity sources such as coal or gas emit greenhouse gases, including carbon dioxide, into the air. These chemicals contribute to climate change and pollute the air and water. Solar energy, on the other hand, is a clean and renewable resource. When you use solar power, you’re reducing carbon emissions and helping to lower your home’s environmental footprint.
There are many great solar panel companies in California; do your research before signing a contract with one. Be sure to check for reviews, referrals, and company history beforehand. SaveOnEnergy can help you find a great solar panel installer in your area. Fill out the form above or call the number on your screen to learn more.
The SaveOnEnergy marketplace helps you search, compare, sign up and save on the right energy fit for your home — all for free. If you’re interested in solar, answer a few questions to get an exact price quote from our solar advisors.
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