Solar Panel Cost in California (2022 Local Savings Guide)
Here’s what we’ll cover in this guide:
- What does the typical solar power system in California cost?
- How much you can save in the Golden State by converting to solar energy?
- How do you save money when installing a residential solar system in California?
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How Much Do Solar Panels Cost in California?
The average cost of solar panels in California is around $16,380. If you take the full federal solar tax credit into account, you’re looking at an effective total of around $11,466.1 This estimate is based on the assumption that you only need a to offset the CA average of 572 kilowatt-hours (kWh) used per household per month.
This system size comes out to cost $2.73 per watt, which is slightly above the U.S. average of $2.66. While that means that equivalent solar equipment in California costs more than it would in most other states, California homeowners also consume far less energy on average, need much smaller systems and therefore pay less overall for solar than most Americans.
The table below provides average prices for solar systems of different common sizes seen in California. We’ll include totals before and after the federal solar investment tax credit (ITC).
How Does the Current Cost of Solar in California Compare to the National Average?
As mentioned above, Californians pay a bit more per watt for solar equipment than residents of most other states. The cost per watt is around $0.07 more in CA than throughout the U.S.
However, the average system size in the country is 9 kW, which is about 50% larger than what is required in CA. This is partially due to the abundance of sunlight in the Golden State and partially to the low energy needs in the state.
At 9 kW, the average system in the nation costs $23,940 before the ITC and $16,758 after the credit. CA residents pay around 30% less in system totals than the average solar customer in the U.S.
How Are Solar Costs Trending in California?
California is ranked number one in the country in terms of solar adoption, according to the Solar Energy Industries Association (SEIA).2
Thanks to the booming solar industry in the area, solar equipment has become more widely available, and prices have fallen year over year for the past decade or so. Over the last ten years, equipment costs have dropped around 53% in CA.3
The solar industry has continued to make advancements both in equipment and manufacturing processes. As a result, we expect that PV panels will only continue to rise in their efficiency rating and come down in price over time.
Since equipment prices have historically fallen, some prospective solar customers feel that it might be wise to wait for costs to continue to drop before converting. While this does seem to make sense in practice, it will likely only cost you money in the long run.
The primary issue with waiting is that electricity rates are on the rise in California.4 The ever-increasing difficulty of sourcing fossil fuels and the number of customers converting to solar — especially in an area like California — will likely lead to energy prices continuing to rise.
As such, the long-term energy burden of remaining with fossil fuels is becoming more expensive. Currently, California residents can expect to pay over $46,000 in energy costs over the next 25 years — this could be more if electricity rates continue to rise. In that same time, converting to solar would save nearly $30,000.
The numbers are clear: the earlier you convert to solar, the less you’ll spend on energy, and the more you’ll save overall. It’s usually not beneficial to wait for equipment prices to drop further.
How Much Can You Save By Going Solar in California Today?
According to our research, solar systems in California can save you an average of $29,734 on utility bills over the life of the system. This number assumes a few things:
- You pay for your system in cash
- Your system is appropriately sized for your home
- Your household consumes the average amount of electricity per month
Installing solar equipment in California is expensive, but it’s important to keep long-term savings in mind when considering solar. For most residents of the Golden State, converting to renewable energy not only reduces their contribution to global warming and pollution, but it also is a financially wise decision.
Additionally, our estimated savings are based on current electricity rates. Recent increases from companies like Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) indicate that prices will continue to rise. As such, savings are likely to be even greater over time.
One important thing to remember when choosing how to pay for your solar array in California is that the payment method matters. The payment option you pick will influence your upfront costs but also how much you pay in total for your equipment.
The chart below provides some typical costs for the common payment methods, plus the payback period — how long it takes for the panels to pay themselves off — and your total estimated savings over the panel lifespan.
|Solar Financing Option||Upfront Cost (estimated)||Payback Period||Est 25 Year Savings|
|Cash||$11,500 (after tax credit)||8 years||$30,000|
|Loan||Often $0, but higher down payments can reduce payback period and long-term cost||11 years||$25,840|
In the following sections, we’ll explain how the different payment options affect your system costs, and we’ll take a look at the pros and cons of each option.
Cash Purchase of Solar System
Using cash to purchase your solar energy system will, of course, mean you’ll have the highest possible initial costs. However, since you won’t need to pay interest on a loan, you’ll end up spending less for your system over time than you would if you financed.
The typical system in CA costs around $11,500 after the federal tax credit. While this is a lot for many people to pay out of pocket, you’re expected to earn that money back on your utility bill savings in just eight years. This is called the panel payback period, and it’s the point at which your panels become profitable.
After that, your panels should save an additional $29,000. Overall, the solar investment you’ll make is usually worthwhile. This is especially true when you consider that the alternative is paying over $45,000 for energy rather than saving $29,000.
It’s also worth keeping in mind that these numbers only reflect the federal tax incentive being taken. As the number one state for solar in the country, California is home to plenty of appealing incentives that can help you save even more money over time. We’ll discuss some of the most beneficial perks in a later section.
A solar loan is a means of financing your panels, which means you’ll pay a monthly payment that includes interest until you pay off the loan. Most loans for PV equipment are between 4% and 8% APR, and they typically last for between five and seven years. However, these numbers depend on your financier and your credit score.
In many cases, the company or institution offering the loan will make sure that your monthly payment is close to what you’d be paying for electricity alone. This helps ensure that you can afford the payments easily. In CA, that means that your monthly loan payment can be as low as $116.
Loans for PV systems sometimes have no-money-down options to make solar as accessible as possible. However, paying a down payment will help reduce financing costs and may lower your rate, which means it’s a good idea to pay as much as possible when you first convert.
In California, Property-Assessed Clean Energy (PACE) financing is available to help keep financing costs to a minimum. If you qualify, this could be a great option for keeping your all-in price down.
As you might imagine, your panel payback period will be longer if you finance than if you pay with cash. This is due to the interest you’ll be paying on top of your total equipment cost. The average payback period is around 11 years when you finance, about 25% longer than if you paid with cash.
Much like a car lease, a lease for PV equipment lets you pay a monthly fee to use a company’s property — in this case, residential solar panels — but that company retains ownership of the property.
Leases are a great option for property owners who don’t want to spend anything on their panels but still want to do their part in slowing down global warming and reducing pollution.
Most leases will give you a monthly payment equal to your current average electric bill. That means you won’t see any change in your monthly expenses, but you can rest assured knowing that the electricity you’re using comes from a clean energy source. The average lease payment in California will be at or under $116, which is the average monthly energy bill.
Leases are becoming less popular because more and more appealing no-money-down options are becoming available. However, they’re still a good option for aspiring solar customers who cannot afford a cash purchase and don’t have the credit to qualify for a loan.
Watch Below: See why Californians often have to pay their utility providers twice as much as the rest of the nation for electricity
How Do You Get the Best Solar Prices in California?
California residents are spoiled when it comes to solar perks. The benefit programs available are part of the reason why the Golden State is one of the best places in the country to convert to solar. While there are a bunch of benefits and incentives available, there is a handful of them that you’ll want to make sure you take advantage of.
- File for the Investment Tax Credit (ITC)
- Take advantage of the Self-Generation Incentive Program
- Get multiple solar quotes
- Take advantage of local solar incentives
File for the Investment Tax Credit
First and foremost, make sure you don’t miss out on the federal solar investment tax credit. This provides a credit to your income taxes for a massive 30% of your entire system value, including panels, inverters, batteries and electric vehicle (EV) chargers. The credit comes out to an average of just under $5,000 in CA.
The federal tax incentive is super easy to apply for as well. You’ll just need to fill out IRS form 5695 when you file your taxes. The information you need should all be on the paperwork you receive from your installation company. The benefit provided by this incentive far outweighs the minimal time you’ll spend applying for it.
For more information on how to apply, you can check out the quick guide on the Department of Energy’s website.5
Take Advantage of the Self-Generation Incentive Program (SGIP)
Second, the California Public Utilities Commission (CPUC) offers the SGIP to all solar customers, and it provides an outstanding value. Best of all, this initiative doesn’t take long to file for, so it’s worth your time.
The program offers rebates for going solar, with the amounts varying based on your utility provider. You can check the CPUC website for information on how to file based on your utility company. The program is available for the following companies:
- Pacific Gas & Electric Company (PG&E)
- Southern California Edison (SCE)
- Southern California Gas Company (SoCalGas)
- San Diego Gas & Electric (SDG&E)
Get Multiple Quotes
As we’ll discuss later, the contractor that you choose to install your system will have a large impact on your final price. This is because labor costs, travel times and quality of an installer all vary from company to company.
If you take the time to gather multiple quotes, you can compare them and even shop them against each other. Some companies may be offering specials, product bundles or deals on certain products. Others might give you a discounted quote if they know that they have to compete for your business.
Taking the extra time to get multiple quotes can potentially save you thousands of dollars in the long run.
Take Advantage of Local Solar Incentives
Finally, there are a handful of local perks available to residents of certain municipalities. Two of the most appealing ones are listed below:
- Sacramento Municipal Utility District (SMUD) benefits: If you live in Sacramento or the surrounding suburbs, you probably have access to several incentives that amount to around $2,500 in rebates and savings. You can check the SMUD website for more information on how to apply and what your incentive amount might be.4
- Rancho Mirage Energy Authority (RMEA) benefits: Customers of this utility company can get a one-time rebate of up to $500 for converting to solar. The application process takes just a few minutes, so it’s worth the relatively small amount of money you’ll get back.5
As shown in the below video, the CA Public Utilities Commission is aiming to reduce rooftop solar
What Factors Affect the Cost of Solar Panel Systems in California?
Most Californians pay between $10,000 and $20,000 for their solar arrays after the full federal credit is considered. The range is so large because there are several things that affect panel costs. We’ll discuss the most influential price factors in the sections below.
- The size of your system
- The installer you choose
- The equipment you install
The Size of Your System
One of the most significant cost factors for solar equipment in California is the size of the system you need for your home. Your system should be sized to fit on your roof and to meet your energy demands.
Larger systems that generate more electricity require more panels, which means you’ll pay more for the equipment. In California, each additional kW of solar capacity you install is expected to generate an additional 100 kWh of power each month and cost an additional $2,730, on average.
Below are some typical prices (after the federal credit) for systems of different sizes in CA:
- 5 kW: $9,555
- 6 kW: $11,466
- 7 kW: $13,377
- 8 kW: $15,288
- 9 kW: $17,199
The Installer You Choose
California is home to nearly 900 registered solar installers, which means you’ll have plenty of options when it comes to choosing a solar company.6
Picking the right one will provide you with a positive experience but can also lower your costs overall. Each company charges different amounts for installation labor and equipment, and similar systems can be thousands of dollars apart in price from different installers.
It’s often tempting to choose your installer based on price alone, but you should really consider the value provided as well.
For example, NRG Clean Power is a local solar company based in Los Angeles, and it installs panels made by SolarEdge, SMA, Panasonic, Solaria, REC, Hyundai and Tesla. Many of the best solar panel brands are affordable and provide plenty of efficiency for CA residents.
On the other hand, SunPower — the top national solar company that operates in California — only installs monocrystalline panels from Maxeon. These are quite expensive, which means you’ll pay more when you choose SunPower. However, the panels come with an industry-leading warranty and efficiency and are, therefore, a better value.
The Equipment You Have Installed
Every solar panel system is different, and the pieces of equipment you choose to install, as well as the brands you choose, can have a major impact on your total system cost.
First, you’ll need to consider the size and efficiency of the equipment. Most property owners choose a system that is expected to cover their total energy consumption, which means the efficiency of the panels you install and the number of panels you need can vary.
California receives 284 sunny days per year, which is well above the U.S. average of 205. That means most property owners don’t need high-efficiency panels, so some money can be saved there. Additionally, the number of panels you need depends on your home size and energy efficiency, which can also vary quite a bit.
If you live in California, you experience more power outages than any other state. This is due to extreme heat and an enormous population. As a result, solar batteries are a good idea if you don’t like the idea of losing power. Solar batteries store the excess energy that your panels produce for use at night or during power outages. However, most solar batteries cost near $10,000 upfront, so they can add to your system cost.
California residents also use much less energy than the national average — 572 kWh per month as opposed to 893 kWh — so most homeowners can get away with smaller systems that cost less and still eliminate electric bills.
Are There Any Maintenance Costs of Going Solar in California?
Thankfully, solar energy systems are relatively low-maintenance in CA. The area isn’t prone to much severe weather, so the risk of panel damage from extreme weather events is relatively low.
One type of panel “maintenance” is removing panels for roof replacement and reinstalling them afterward. This usually costs between $500 and $1,000, and many installers in your area are likely to provide this service if you need it.
However, reputable solar panel installation companies will let you know before installing panels if your roof is expected to need repairs or replacement within the next ten years or so. If that’s the case, they’ll typically recommend carrying out the roof maintenance before installing solar to prevent removal expenses down the road.
Since CA receives such little rainfall, you may also need to rinse any dirt, pollen or other debris off of your panels from time to time. These can all build up on panels and reduce efficiency. In other states, the more frequent rainfall will wash it off, but CA residents should plan on cleaning the panels about once every six months.
You can certainly pay for this service — an average of around $400 per year — but it’s much more cost-effective to spray down your panels with a hose yourself.
Typical Costs of Solar Providers In California
As we mentioned above, what you pay for your system can vary based on the installer you choose. The chart below provides a handful of the best solar companies in CA, along with relative pricing to help you decide which are most likely to fit into your budget.
|Solar Installer||Average Installation Cost Per Watt ($-$$$$$)|
|ADT (SunPro) Solar||$$$|
Read More About Going Solar
FAQs: California Solar Panel Costs
At EcoWatch, we’re happy to get questions about the process and costs of getting rooftop solar from California residents. Below are some of the questions we see most often, along with our responses. If you have specific questions that aren’t answered here, reach out to our team of solar experts at email@example.com.
The average cost of California solar panels is $2.73 per watt. This means a 5 kW system would cost around $9,555 after the solar tax credit. Heavy investment in renewable energy has lowered the cost of solar in the state significantly, and this cost offers great value relative to high local energy prices. You can use our solar calculator to see what a system on your home will cost and get a free solar quote from a reputable installer in your area.
Solar panels increase home value everywhere, but mostly in areas with generous net metering policies and solar rebates. This policy lets you earn energy credits to offset future bills, saving you more money over time. As such, the areas in California where solar panels increase home value the most correspond with the areas that have the most solar-friendly policies. It’s worth noting that even if your home’s value increases, California has property tax exemption laws in place to ensure your property taxes don’t rise as a result of solar panel installation.
For the large majority of homeowners, yes! CA is one of the best places to go solar, and there are a few factors that help make solar more affordable and more beneficial in the area.
- Energy needs are low, which means system sizes and total equipment costs will also be below average. This means your outlay of money will be minimal.
- California receives abundant sunlight — around 260 sunny days per year — which means your panels will have ample opportunity to generate power and offset your utility bills.8
- California residents pay a higher cost of electricity than property owners in nearly every other state. The typical cost per kWh for energy is nearly double the U.S. average, so panels have more to offset and greater potential to save you money.8
- The State of California provides quite a few perks to bring down the cost of converting to solar and boost long-term savings.
The average system in CA pays for itself in just eight years — faster than the U.S. average of 12 years. After that, it saves an average of nearly $30,000!