* 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.
With plenty of sunshine, great incentives, and the 30% federal tax credit to consider, California ranks among the top states to go solar in the U.S.
However, new rules for how utilities bill solar customers mean that homeowners now save less when they go solar. Despite these changes, installing solar panels is still a great investment in the Golden State.
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.
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Prices based on a 5.4kW system, after 30% federal tax credit
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.
(forecast avg California electric rates over the next 25 years)
The federal tax credit is the most significant incentive to install solar panels for homes and businesses. Right now, the federal tax credit equals 30% of the total solar system costs. The remainder can be rolled over to future years if you can't claim the full tax credit in any given year.
California's newest solar billing rules, NEM 3.0 or Net Billing, are now in effect for customers of investor-owned utilities. Under the new policy, homeowners can still use the solar energy they produce to reduce their energy costs, but the savings are not as high as they were under the previous billing structure.
Here are some key points to know about California Net Billing:
California offers PACE financing to homeowners looking to go solar.
California offers a property tax exemption for solar panel systems. Solar panels increase the property value of your home, but the exemption ensures you won't have to worry about an increased tax statement. This policy is in effect until 2026.
Eligibility: Federal incentive
Type: Personal Tax Credit
Eligibility: Residential incentive
Type: Low-income solar program
(After tax credit)
(After tax credit)
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.
Minimum of 25 years but generally 30 or more
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.
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.
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 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.
No, but cleaning them can improve power generation if they are dirty.
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.
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.
A significant advantage to going solar in California is the 30% federal solar tax credit. Plus, California is a very sunny state, so your solar system can generate plenty of energy.
There are not many disadvantages to going solar in California. Even though the net metering policy recently changed, Californians can still see a shorter payback than homeowners in many other states.
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.