Solar panels California:

Prices, incentives and best companies 2020

Avg CA solar panel cost:

$10,507 - $12,842*

Avg 25 year savings:

$47,718 - $58,322

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 26% federal tax credit.

California solar panels guide 2020

Updated October 30, 2020

California is among the top states in the U.S. for home solar. High levels of solar irradiance, high electric costs, the 26% federal tax credit, and their net metering policy 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 $11,877 after claiming the 26% 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

$10,507-$12,842

Net profit (savings less system cost)

$47,718-$58,322

Payback period

5.4-6.6 years

Recommended size for the selected utility bill

5.9kW

Solar panel cost calculator

Cash flow graph based on cash purchase of a 5.9kW system

Are solar panels worth it in California

Solar panels have fallen in price by more than 80% in the last ten years. In 2020 they also remain subsidized by the 26% 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

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 26% of the total installed costs of installing a solar system. At the end of 2020, the amount of the credit will fall to 22%. This means that in order to maximize your savings potential, the best time to go solar in California is now.

Net metering

California does have a state-wide net metering policy called NEM 2.0. In 2016, the California Public Utility Commission instituted NEM 2.0 which brough three major changes to net metering in the state, including:

  • Imposing interconnection fees
  • Changes regarding non bypassable charges
  • Requiring utilities to implement time of use rates

NEM 2.0 mandates that each utility must set its own interconnection fee for customers to pay when they install solar. The new net metering policy also requires utilities to determine a time interval at which they will measure the amount of energy obtained from the grid.

Nonbypassable charges will then be paid on every kilowatt-hour (kWh) discharged from the grid within any given interval.

PACE financing

California offers PACE financing to homeowners looking to go solar. 

Utility incentives 

Some utilities in California do offer additional solar incentives. For example, the Sacramento Municipal Utility District offers their customers a $300 rebate when they install solar panels on their roof. 

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: State incentive
Type: Low-Income Program

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Top models of solar panel installed in California 2020

Average cost of solar panel installation in California by system size

System size*
Cash purchase

(After tax credit)

Financed purchase

(After tax credit)

4kW $11,708 $12,528
5kW $14,005 $14,985
6kW $16,050 $17,174
7kW $18,536 $19,834
8kW $21,520 $23,026
9kW $23,346 $24,980
10kW $25,670 $27,467

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 2020 "solar systems with battery storage" are becoming more popular. These are known as hybrid systems.

How do solar panels work?

Grid-tied solar system

Solar panels are mounted on your roof and wired together in groups called solar arrays. The power they generate flows into a solar inverter, where the direct current (DC) is converted into alternating current (AC). The electricity is then either used by your home or exported to the electric grid.

Off-grid solar system

Off-grid solar power involves meeting all your energy needs from the sun; there’s no utility to fall back on. The solar installation needs to power your home not just during the day, when the sun is shining, but after dark as well. This requires many solar panels, paired with a large battery system.

Hybrid solar system

In hybrid solar systems, rooftop solar panels are connected to both a solar battery and the electric grid. This 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.

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 2020?

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 2020.

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 26% 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 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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