Solar panels California:

Prices, incentives and best companies 2023

Avg CA solar panel cost:

$10,259 - $12,539*

Avg 25 year savings:

$47,570 - $58,141

Avg payback period:

5.4 - 6.6 years

Estimate cost and savings based on your location and power usage

* Cost data based on quotes for fully-installed solar panel systems submitted on our platform. Prices are shown after applying the 30% federal tax credit.

California solar panels guide 2023

Updated December 19, 2022

California is among the top states in the U.S. for home solar. High levels of solar irradiance, high electric costs, the 30% federal tax credit, and the current net metering policy (until April, 2023) ensures that residents will benefit immensely from installing solar panels in California.

On this page:

Solar power prices, savings and payback in your part of California

The average cost for an installed residential solar system in California is currently $11,235 after claiming the 30% federal solar tax credit. This is $2.68 per watt. However, there is some variance in solar prices in different parts of the state. The graph below shows the average cost of installed solar systems in your part of the state.

Cost range of local prices


Net profit (savings less system cost)


Payback period

5.4-6.6 years

Recommended size for the selected utility bill


Solar panel cost calculator

Cash flow graph based on cash purchase of a 5.4kW system

Are solar panels worth it in California

Solar panels have fallen in price by more than 80% in the last ten years. In 2022 they also remain subsidized by the 30% federal tax credit and the net metering law, making them an excellent investment. They offer a return well above the long term average return from both the share market and also property investment.

Another way to look at this question is the levelized amount you will pay for each kWh of power you will use over the next 25 years with and without solar panels. As you can see below the savings are significant.

Levelized cost of solar energy
Levelized cost per kWh is the cost of the solar system divided by the total number of kWh produced by a solar system over it’s lifetime

5¢ /kWh

If you don't get solar

35¢ /kWh

(forecast avg California electric rates over the next 25 years)

CA solar panel cost calculator

Best 10 solar installers in California


California solar incentives & tax credits

Federal solar tax credit

The most significant incentive to install solar panels for homes and businesses is the federal tax credit. Right now, the federal tax credit is equal to 30% of the total costs of installing a solar system. If you can't claim the full tax credit in any given year, the remainder can be rolled over to future years.

Net metering

California currently has a state-wide net metering policy called NEM 2.0, which was instituted in 2016 by the California Public Utility Commission (CPUC). NEM 2.0 brought three major changes to net metering in the state, including:

  • Requiring utilities to implement time of use rates
  • Requiring new solar customers to pay an interconnection fee
  • Enumerating certain "non-bypassable" charges that cannot be offset by solar production

NEM 2.0 mandates that every solar customer must take service under a time-of-use rate plan, under which electricity is more expensive during times of peak grid usage. The policy also requires utilities to set an interconnection fee to recover the cost of adding a new solar customer to their billing system. 

Under NEM 2.0, non-bypassable charges (small fractions of the retail price of electricity that go toward public purpose programs like those that that help low-income customers) must be paid on every kilowatt-hour (kWh) discharged from the grid. That means the utility company keeps a record of all kilowatt-hours (kWh) pulled from the grid during the day, and charges the customer for the non-bypassable charges, even if that electricity was offset by exported solar energy during another time. 

Important note: NEM 3.0 is coming to California in April! The CPUC has finaized the design of a NEM replacement program called Net Billing, and the utilities are now hard at work on the transition to the new program. Any solar customer who submits a completed interconnection application before April 14th, 2023 can receive NEM 2.0 credits for 20 years, so if you're interested in solar power for your home or business, act fast!

PACE financing

California offers PACE financing to homeowners looking to go solar. 

Utility incentives 

Very few utilities in California offer additional solar incentives. For example, SMUD offers its customers a rebate when they install home energy storage system alongside rooftop solar panels.

Property tax exemptions

California has a property tax exemption for solar panel systems. Under the Property Tax Exclusion for solar Energy Systems, 100% of the assessed value of the solar system is exempt from the homeowner’s property taxes.

Table 2: Available incentive programs
Eligibility: Federal incentive
Type: Personal Tax Credit
Eligibility: Residential incentive
Type: Low-income solar program

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Top models of solar panel installed in California 2023

Average cost of solar panel installation in California by system size

System size*
Cash purchase

(After tax credit)

Financed purchase

(After tax credit)

4kW $11,624 $12,438
5kW $14,040 $15,023
6kW $16,050 $17,174
7kW $18,599 $19,901
8kW $21,464 $22,966
9kW $23,364 $24,999
10kW $25,780 $27,585

Find city information in California


Home solar basics

Is it better to lease or buy solar panels in California

You will save most money by buying your solar system rather than leasing it. Read more about the pros and cons of leasing vs buying solar.

How long do solar panels last?

Minimum of 25 years but generally 30 or more

How do solar panels work on a home?

Solar panels power your house when they can but your home uses the utility company for power at other times. In 2023 "solar systems with battery storage" are becoming more popular. These are known as hybrid systems.

How do solar panels work?

Grid-tied solar system

A grid-tied system is the most common type of solar system. It has no solar battery for backup power and utilizes net metering to maximize savings. Solar panels are mounted on your roof then wired together, and the power generated flows into an inverter where direct current (DC) electricity is converted into alternating current (AC) electricity. This electricity is either used by your home or is exported to the utility grid.

Hybrid solar system

In hybrid solar systems, rooftop solar panels are connected to both a solar battery and the electric grid. The solar electricity generated by your panels that your home does not use is stored in the battery instead of being sent to the grid, which reduces your reliance on the utility while also providing backup power when needed. Battery storage is still expensive but you may be able to reduce costs by using state incentives.

Off-grid solar system

Off-grid solar systems are not connected to the grid at all, so all of your energy needs must be met by the sun. There is no utility to fall back on. The solar installation needs to power your home not only during the day, but after dark as well, so many solar panels and a large battery system are required. These systems are often expensive and don’t make sense for homes that have access to the grid.

Read more about types of home solar systems.

Do solar panels require regular maintenance?

No, but cleaning them can improve power generation if they are dirty.

Will residential solar power system cost fall in California in 2023?

Given this environment, and the effect of import tariffs placed on solar panels by the Trump administration during 2018, it is hard to see that solar power system prices in California will fall during 2023.

How much electricity do solar panel systems generate in California?

Depending on the location, solar panels will generate different amounts of electricity.

A solar system that is installed on a south-facing 29-degree pitch roof California will generate 1,550kWh of peak DC (direct current) capacity per year per 1kW in the Los Angeles area.

Enter your details into the solar panel calculator to see how your location, roof tilt, and roof direction impacts solar panel production.

What are the pros and cons of installing solar panels in California?

The biggest advantages in California for installing solar panels are the net metering policy and the 30% federal tax credit. Plus, there are some local utility incentives available that can save you even more.

There are not many disadvantages to installing solar panels in California. If you’re a California homeowner, you’ll be kicking yourself that you didn’t get solar while all of these incentives (especially NEM 2.0) were still around.

Enter your details to calculate the cost and savings you are likely to get from installing solar panels for your home.

What you can learn from our state solar panel calculator

This solar calculator requires you to input your address, utility company, your average monthly power spend - it tells you:

If you want to see all of the above but also see live pricing, the three best solar deals available in your city and get binding quotes from each of these solar companies then use this California solar panels calculator. This calculator requires you to also input your name and contact details because most of our 200+ installer partners will only authorize the sharing of their live solar pricing where we have validated that you are a real homeowner with a home in their service area. We respect the privacy of your data and only share your contact details with the solar companies you ask us to get binding quotes from.

Note: Please keep in mind that the best source of up-to-date information on incentives are the solar installers who specialize in your area.

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