Is Solar Worth It in California? Costs and Benefits of Solar Panels in California | House Grail (2024)

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Is Solar Worth It in California? Costs and Benefits of Solar Panels in California | House Grail? ›

Yes, solar is worth it in California! In fact, solar panels are worth it in most areas, though certain factors – including the cost of electricity, available incentives, the climate, and sun angle – will all impact how quickly you break even on your investment relative to other areas.

Spoiler alert: yes, solar is still worth it for bill savings under NEM 3.0. The savings won't be the same as your neighbors that was grandfathered into NEM 2.0, but a home solar system is still far more affordable than paying utility electricity in California.

How much could you save by going solar in California? If we assume an average annual electricity bill of around $1,800, a California homeowner who goes solar in 2023 might expect to save about $45,000 in electricity costs over the 25-year warranty of their panels.

California does not have a free solar program. In fact, no state currently has such a program. Instead, California offers tax incentives and rebates to reduce solar panel installation costs.

Given solar panels usually last for 25 to 30 years before losing efficiency, you would still have 17 to 22 years of savings on energy costs. With an estimate of $1,500 each year in savings, you could easily save $25,500 to $33,000 on electricity during the life of your system—and that's if energy prices don't rise.

This update is called NEM 3.0, and it's set to replace NEM 2.0 on April 14, 2023. California's new NEM policy will see customers of major utility companies receive 75% less for the electricity they send back to the grid compared to the average amount of the current model.

Section 73 of the state's revenue and taxation code allows a property tax exclusion for qualifying new solar installations. Meaning, your property taxes will not increase if you install solar on your property.

1. Solar Will Become 35% Cheaper By 2024. When the sun shines onto a solar panel, energy from the sunlight is absorbed by the PV cells in the panel. This energy creates electrical charges that move in response to an internal electrical field in the cell, causing electricity to flow.

This federal tax credit is worth 30% of the cost of installing solar and battery storage systems. Thanks to the Inflation Reduction Act, the ITC will remain at 30% until 2032 and beginning on January 1, 2023 applies to battery storage that isn't hooked up to solar. Learn more about the federal solar tax credit here.

Solar costs are very likely to decrease in 2023, making rooftop renewables affordable for more homeowners. In November 2022, the National Renewable Energy Laboratory (NREL) published its analysis of the cost of solar and energy storage (battery) system installations for the first quarter of 2022.

How long does it take for solar to pay for itself in California? ›

Key points. Solar panels typically pay for themselves within nine to 12 years. Solar panels reduce or eliminate the cost of electric utility bills. Utilities may pay solar panel users through a process called net metering.

Frequently asked questions (FAQ) about the Net Surplus Compensation (NSC) program. California Assembly Bill 920 allows PG&E and other state utilities to offer payment for surplus energy sent back to the electric grid by your home or business' renewable energy systems. Our NSC program is based on this bill.

California Solar Panel Costs

The total cost of solar panels in California generally ranges between $15,000 and $25,000.

Solar energy systems can generate electricity in any climate. One of the disadvantages of solar energy is that it's subject to temporary weather disruption. Cloudy days reduce the amount of electricity you produce. Cold, however, doesn't affect productivity.

The most common estimate of the average payback period for solar panels is six to ten years. This is a pretty wide range because there are many factors that will influence the number of years it can take to pay off your panels and the monthly savings you can expect.

The simple answer to this question is yes. You can most definitely run your AC on solar power. As long as you provide steady voltage and continuous current, you will have no problems.

On April 15, 2023, new solar customers will be enrolled in the new Net Billing Tariff (NBT) where customers will be credited for electricity they export based on its value to the grid.

The California Public Utilities Commission's new solar program encourages the continued growth of rooftop solar. It also incentivizes customers to add battery storage to solar systems to help make the state's electric grid more sustainable and reliable.

You Save Money on Energy

Using solar energy guarantees saving on your bills because the energy you produce is natural, and you are not relying on energy from the city's grid. Other kinds of energy are getting more expensive, and solar energy could be the best source in California.

Manufacturers typically consider 25 to 30 years a point at which enough degradation has occurred where it may be time to consider replacing a panel. The industry standard for manufacturing warranties is 25 years on a solar module, said NREL.

How much can you write off solar panels on taxes? ›

When you purchase a solar photovoltaic (PV) system during the tax year, you are eligible for a Federal Solar Tax Credit that you can claim on your federal income taxes for a percentage of the cost of the system. In 2021, the ITC provided a 26% tax credit for systems installed between 2020 through 2022.

When you install home solar panels in 2023, you can claim the Investment Tax Credit, otherwise known as the ITC or federal solar tax credit, on your 2023 taxes. The ITC is the best solar incentive of 2023. It allows you to reduce what you own in federal income taxes by 30% of your total solar installation costs.

In 2023, we predict solar panels will be a substantial investment for homeowners with the available capital to overcome the upfront costs. With rising electricity rates and further increasing monthly electricity bills, more homeowners each year will be drawn toward solar panel systems to offset monthly utility bills.

The good news is that most residential solar panels should operate for 25 years before degradation (or reduced energy production) is noticeable. Even after that point, solar panels can continue to convert sunlight into solar energy—just at a less efficient rate than when they were new.

The average cost of a solar panel installation in 2023 ranges from $17,430 to $23,870 after taking into account the federal solar tax credit, with an average solar installation costing about $20,650. On a cost per watt ($/W) basis, solar panel prices in 2023 average $2.95/W (before incentives).

Thanks to California's Active Solar Energy Tax Exclusion, homeowners can install solar panels today without fear of their property taxes going up. This incentive protects homeowners from any impact on their property taxes through Jan. 1, 2025.

Solar Incentives, Tax Credits, and Rebates in California*

Qualified homeowners with home solar could be eligible for a tax credit of up to 30% against the cost of the system. Property tax exclusion on the added home value from the rooftop solar system.

California will exempt property taxes on the added value to your home that comes with installing a solar energy system. Net metering allows homeowners that create excess energy to use it as a credit on their next electric bill.

Waiting on installing solar panels means missing on savings

In summary, purchasing solar panels for your home sooner rather than later is in your best interest as a homeowner. You can begin saving on electricity immediately and secure flat energy costs, rather than paying for ever increasing rates.

Will solar batteries become less expensive over time? It seems like the current supply chain issues affecting metal prices – and a soaring demand for electric vehicles – means lithium-ion battery prices won't drop until at least 2024.

Are solar panels cheaper in the long run? ›

The benefits of solar energy don't end with cost-savings. When you install solar panels, you'll increase the overall value of your home by an average of about 3%. If you eventually sell your house, you'll actually make money on your smart investment in renewable energy.

Once you pay off your loan or buy your system outright you will essentially be getting energy for free. When it comes to payment, those who are using solar energy will still get a monthly utility bill. This will show how much energy you produced versus how much energy you used for the month.

Solar lease buyout – Buy out the remaining part of the solar lease or keep making monthly payments. Purchase the solar PV system in its entirety at market price. Transfer your solar lease agreement.

Solar panels pay for themselves over time by saving you money on electricity bills, and in some cases, earning you money through ongoing incentive payments. Solar panel payback time averages between 5 and 15 years in the United States, depending on where you live.

If you received a high utility bill, chances are, you're consuming more energy than the amount used to design your solar system. This can occur during the day or at night. Keep in mind that once the sun goes down, your solar panels are no longer producing power.

The California State Board of Equalization has approved the Active Solar Energy System Exclusion. So if you install a new home solar system in California or build a house with a solar panel system, your property taxes won't increase until the end of the 2024 fiscal year.

If demand on the grid is expected to exceed capacity, the state may trigger rolling blackouts.

The most expensive part of a solar energy utility is the property on which the system is installed. Remember this when making a purchase. The most expensive part of a solar energy utility is therefore the property on which it is installed.

A Solar permit is required for an owner or contractor of a property to construct rooftop or ground mounted solar. Prior to starting construction you will be required to submit plans and any necessary supporting documentation for review and approval by the County.

California requires building permits before you can start installing the panels. To have your application approved by the permitting agency, you must submit a full set of plans that meet state and local building code standards.

What can go wrong with solar panels? ›

Yes, getting a solar panel system is worth it for the excellent financial benefits and cost savings. However, solar panels aren't suitable for everyone. Residents with low energy needs, low electricity rates, or year-round inclement weather may not save money from a solar system.

Can you make money with solar? A rooftop solar array could save you tens of thousands of dollars in electricity costs over the panels' lifetime. You're unlikely, however, to make money with solar. Most utility companies still charge a basic fee for service even if you put more energy into the grid than you take out.

There are three primary ways to pay for solar: with a cash purchase, with a solar loan, or with a solar lease/power purchase agreement.

The estimated operational lifespan of a PV module is about 30-35 years, although some may produce power much longer. While few systems are entering the waste stream right now, more systems will come to the end of their useful life in the next few decades.

Yes, you can run an air conditioner with solar power.

It is conceivable because of powerful solar panels and a converter system. Be that as it may, you may be connected to the grid or be completely off-grid. Both of the systems will allow you to power an AC with solar energy. It will reduce electricity costs rapidly.

The number of solar panels one needs to run a 1.5-tonne air conditioner comfortably is determined by the maximum kVA of the individual solar panels. However, as a general rule of thumb, we recommend getting roughly 10 panels, each having a wattage of around 250 watts.

Yes, getting a solar panel system is worth it for the excellent financial benefits and cost savings. However, solar panels aren't suitable for everyone. Residents with low energy needs, low electricity rates, or year-round inclement weather may not save money from a solar system.

The Inflation Reduction Act (IRA) passed in 2022 has also extended tax incentives for solar installation. While inflation and supply chain challenges have increased the price of solar recently, the reality is that 2023 is one of the best years in recent memory for homeowners to consider investing in solar.

Is it too late to get solar in California? ›

So, if you're a California resident, now is the time to go solar. Don't wait any longer, or you may miss out on the chance to save more, help the environment, and increase the value of your property. If you're not sure where to start, reach out to our solar expert at +1 (408) 780-2889.

The most common estimate of the average payback period for solar panels is six to ten years. This is a pretty wide range because there are many factors that will influence the number of years it can take to pay off your panels and the monthly savings you can expect.

A new Credit Suisse report suggests that from 2025 through 2032, the United States could see solar and wind power purchase agreements regularly signed for under $0.01/kWh, due to a combination of manufacturing and project tax credits.

The tax credit for solar was originally scheduled to decrease to 22% in 2023. With the recent signing of the Inflation Reduction Act of 2022, not only will the credit still be available, but it will also increase to a 30% credit effective until at least 2032.

Solar contractors bill homeowners for this fee as part of the installation cost. Cities whose inspectors are most knowledgeable about PV systems usually cover their permitting expenses with a fee of $324 or less for standard, average- sized systems.

Breakdown of Solar Installation Process. The entire process for installing solar panels and getting them approved isn't an overnight process. Going solar in California takes approximately 45 days from the time a signed contract is submitted.

Eligible low-income households can receive a one-time up-front, capacity-based incentive of $3,000 for every kW of home solar installed. To qualify for SASH, the home must receive electrical service from PG&E, SCE, or SDG&E and be occupied by the homeowner/applicant.

On the other hand, California's 13.3% top marginal income tax rate is the highest of any State in the Union – contributing to the state's high cost of living, sometimes referred to as “the sunshine tax.” Perhaps the old adage “where much is given, much is expected” explains why nearly 40 million people continue to call ...