Before factoring in the federal solar investment tax credit (ITC), the average cost to install solar panels is $16,380 in California. The price drops to $11,466 after the ITC.
Going solar in the Golden State is a little bit cheaper than the national average. The out-of-pocket investment is lower than in other states, though the average cost per watt is slightly higher. On the bright side, Californians get plenty of financial incentives that make installing solar panels more affordable.
• The average cost per watt is $2.73 in California.
• The average payback period in California is eight years if you pay for your system upfront.
• California residents who go solar save an estimated $30,000 over 25 years.
How much do solar panels cost in California?
Installing residential solar panels typically costs $10,000 to $30,000 or more. We've talked to solar customers who told us they paid $18,000 in Santa Barbara, $20,000 in Santa Rosa and $28,000 in Anaheim. On the higher end, one solar customer spent $52,000 in Westlake Village.
How much you pay in California depends on your energy needs, the system's size and other factors. Systems are typically measured in kilowatts (kW). The average residential solar installation in California is 4 kW or 5 kW - about half the size of the national average, which is 9 kW. This is why systems are often cheaper than the national average, even though energy costs per watt are relatively high.
Are solar panels worth it in California?
We've talked to hundreds of solar customers in California over the last few years, and the majority seem happy with their decision to go solar.
Many tell us about the financial advantages, environmental benefits or both, like Tammy in Rancho Cucamonga, who said: "It was really a good decision. Our only regret was that we weren't able to afford it sooner."
David in Palm Desert put it this way: "Energy prices continue to rise and we live in an area where the sun shines most of the year. Securing [a] fixed expense for electricity seemed to be the smart move. … We also believe we are contributing to a cleaner environment by installing solar panels."
Unfortunately, it didn't work out for Jay in Woodland Hills: "Because of the overpriced system, I am paying more for the loan payment than I save from the utility. Interest payments alone are over $1,000 per year, and this will continue for a long, long time."
Ralph in Redondo Beach said: "For us, it will take more than 25 years to pay back, but as a little contribution to the environment we feel that is worth it. We are not into solar for the money."
In the best-case scenario, you can completely eliminate your electricity bill, like Jeffrey in Pasadena. If you finance, it's worth it if your loan payments are cheaper than your current monthly electricity bill. That's why getting quotes from multiple installers is essential.
Cost factors of going solar in California
How much you actually pay for your solar panels depends on a range of factors, including the size of your system and the quality of your panels.
To estimate what size system you need, first look up how many kilowatt-hours (kWh) you used last year on your electricity bill. Divide that number by 1,200. This will be roughly the system size you need. For example, if your home used 30,000 kWh last year, you would need a 25-kW system.
Robert Flores, a solar expert at the University of California, Irvine, said it's smart to upgrade any old appliances before going solar. For example, replacing an old refrigerator with a more eco-friendly one reduces your electric load, which also helps lower your utility bill.
You need fewer solar panels if you use less electricity, which makes the overall system cheaper. If you add more solar power capacity for your home, each extra kilowatt you install is predicted to produce an extra 100 kWh of electricity every month. On average, for each of these extra units of solar power, you would have to spend an additional $2,730.
Panels and other solar equipment
Monocrystalline panels are generally considered the "best bang for your buck," according to Flores. Cheaper solar panels are typically polycrystalline - the difference comes down to efficiency and materials. Polycrystalline panels are less efficient than monocrystalline panels.
• Inverters: Inverters convert the electricity generated by your solar panels from direct current (DC) to alternating current (AC), which is what powers most homes. Inverter costs usually range from $1,000 to $3,000.
• Batteries: Batteries are what store energy to be used for later. Prices often depend on the battery's storage capacity, expected life span, brand and other factors. You can probably expect to pay between $7,000 and $18,000, though some cost $30,000 or more.
Recent changes to California's net metering encourage solar batteries for storage. Under NEM 3.0, adding battery storage will provide more savings compared with solar alone.
Condition of your roof
If you've been thinking about replacing your roof, it's smart to do that before getting solar panels.
Quality solar panels should last 25 to 30 years, so you need your roof to last just as long. Otherwise, you'll have to pay to remove the panels, fix your roof and reinstall them again. This is a frustrating and expensive process you should avoid if you can.
Also, consider your available space. We're in the Northern Hemisphere, so the best place to install is on south-facing roofs.
"If you have that, great," Flores said. "The worst place would be to install on north-facing roofs, especially if those roofs have a high pitch."
For example, if the only place you can install is a north-facing roof with a 30-degree pitch, your cost of going solar will increase by 30% to 40%. The overall amount of electricity produced will be less, and the dollar per unit of electricity gets a lot more expensive, according to Flores.
How you pay
Installing solar panels costs roughly as much as buying a new car. You can pay cash upfront, but a lot of people finance.
Like almost any other kind of loan, you have to pay interest on a solar loan. Solar loan rates are generally low, but the interest still adds up. For example, David in Ahwahnee told us that with "financing it was $18,000. But if I paid cash, it was $15,000, and they gave me a $1,000 debit card. It only cost me $14,000."
If you finance, the California Solar & Storage Association advises against making a down payment of over $1,000. There are plenty of leasing and power purchase agreement (PPA) options that don't require a large upfront investment.
For example, Christopher in San Diego has 33 panels through a PPA. He doesn't actually own the panels, so he's not responsible for maintaining, fixing or monitoring the panels over the next 25 years.
"And at the end of that term, if we want to renew a maintenance contract with them, we can do that at that time or we can have them remove the system or we can pay fair market value for the panels and keep the system as it is," Christopher told us. "Before, my electricity bill was $600 a month. … But now, if I pay anything, it's 20 bucks."
Where in California you live
System costs are relatively consistent throughout the state. Between Northern California and Southern California, the main difference comes down to how quickly you can break even and how much you can save over time.
Permitting fees are a little different in each city or county. In general, solar providers have to get your initials and a signature before submitting applications to interconnect in the service areas of Pacific Gas and Electric Company (PG&E), Southern California Edison (SCE), San Diego Gas & Electric (SDGE), Bear Valley Electric Service (BVES) and PacifiCorp, according to the California Solar Consumer Protection Guide.
Incentives, tax credits and rebates in California
The federal solar investment tax credit (ITC) provides significant savings to Californians going solar. Residents who install solar panel systems by the end of 2032 can deduct 30% of the system's total cost from that year's federal taxes. The credit includes the cost of equipment, labor and permits. Eventually, this credit drops to 26% in 2033 and 22% in 2034.
California residents also qualify for a property tax exemption on the value a solar energy system adds to a home. Other incentives include the Self-Generation Incentive Program (SGIP), the San Diego County Green Building Program and the Rancho Mirage Energy Authority (RMEA) rebate program.
Local solar resources in California
Below are some additional resources that can guide you through transitioning to solar in California.
• Los Angeles Department of Water and Power Feed-in Tariff program
• Pacific Power energy rebates
• PG&E renewable energy programs
• Rancho Mirage Energy Authority rebate program
• Riverside Public Utilities solar information
• San Diego Gas & Electric solar options
• San Diego County Green Building Program
• Southern California Edison residential solar programs
Compare solar companies in California
Hundreds of solar companies operate in California. Read our guide to find the best solar companies for tips on how to pick the right one for you.
Bottom line: Are solar panels a good investment in California?
The long-term savings from reduced electric bills and tax incentives make solar a wise investment for many Californians. As Edward in Coarsegold said: "I made a pretty good decision going solar. It's costing me about half as much now on electricity, and once it's paid off, then we'll even get a better investment."
"I did the math at home and it seems like everything works," Christian in Rancho Palos Verdes told us. "Instead of paying $100 or $200 for the electric bill, if I use the same amount of energy or less, I will end up paying just the financing, which is $150. But only for six years, and then after that, the panels will be mine and I don't have to pay anymore. That's a good investment now. Especially since I will have an electric car."
On average, residents get a better deal going solar than in a lot of other states - see how California's solar panel costs, savings and payback periods compare with other states' below. Your financial payoff timeline might be different, but the eco-friendly benefits alone make solar worthwhile for some homeowners.