California is currently one of the best states in the U.S. for homeowners to get solar panels. There are a number of reasons why that’s the case including:

  • Lots of sunshine
  • High electricity costs
  • Frequent/prolonged power outages
  • Good incentives and rebates on solar panels

If you’re a California homeowner thinking about going solar, you’ll find an overview below on current solar panel costs, incentives and rebates, and whether solar panels are worth it in California.

(Note: The end of 2021/beginning of 2022 may be the ideal time to go solar. With many state tax credits going away, solar panel prices likely on the rise, and increased demand due to low prices & more frequent, prolonged power outages, now may be the prime time to find out if solar makes sense for your home.)

Solar Panels California: A Guide For CA Homeowners

How Much Do Solar Panels Cost in California?

Solar panels are priced per watt. Most estimates you see online put the average cost of solar panels in California at around $2.80 per watt. However, based on this great tool from the state, it shows homeowners are really paying somewhere closer to $4.50 per watt on average. (These numbers do NOT factor in the solar tax credit and other incentives.)

That said, the range varies quite a bit. Some homeowners get solar installed for under $1 per watt and others pay over $7 per watt. What you end up paying depends on a number of factors. And, at the end of the day, the only way to get a good idea of what your costs and savings will be is to talk to a local, trusted solar installer.

(Tip: Don’t automatically go with the lower estimate you get. Be sure to get multiple bids. And keep in mind some, less reputable installers may cut corners to cut costs. It’s usually worth it to pay a bit more and go with a proven, reliable solar installation company.)

The total cost for a system depends on how many solar panels you need / can put on your home. The average total costs for residential solar panels in California right now range between an average of $11,000 and $15,000. (Again, this does not take current incentives into account.)

California Solar Tax Credit

Currently, there is no state of California solar tax credit. However, there are a number of incentives which we’ll get into in a minute.

However, there is a federal solar tax credit that California residents are eligible for. This tax credit is 30% of the costs of your solar installation (this includes the panels, labor and other equipment).

If your solar installation costs $15,000, then you’ll get a tax credit of $4,500. That’s a dollar-for-dollar credit. So if you owe $5,000 in taxes, after the credit, you’d only pay $500 in taxes.

Not a bad deal at all! However, these solar credits are sunsetting so if you want to take advantage of them, you’ll need to act sooner rather than later.

California Solar Tax Rebates

There is a rebate program available in California if you decide to get a battery storage system with your solar panels.

This rebate is through the Self-Generation Incentive Program or SGIP. It provides CA residents a rebate of between $200 and $1,000 per kilowatt-hour of storage on their battery storage system. This can save you thousands if you get batteries with your solar panels!

California Solar Incentives

While not tax rebates or credits, California residents have a number of great incentives available for solar panels. Here are the current ones:

Property-Assessed Clean Energy (PACE)

Also called the Home Energy Renovation Opportunity (HERO), this is a loan program that lets you finance solar projects through your property taxes. The short version of the way it works is this…

Your local government will pay for the upfront costs for your solar panels. Then you’ll pay that money back over 20 years (though this can vary) through an increase in your property tax bill.

Property Tax Exclusion

This benefit is good through at least the end of 2024. It puts a freeze on property tax increases if you put solar on your home.

Net Metering

This is where the utility company pays you for any excess electricity your solar panels produce. California has some of the best net metering rules in the country.

The utilities in CA have to buy your excess solar electricity at close to retail rates. Net metering is one of the best reasons to go solar in CA. These rules also help increase the value of putting solar panels on your home.

However, there’s been some political fighting over net metering so it may not last. This is yet another reason to hop on solar sooner rather than later.

Incentives For Low-Income Single-Family Homeowners

CA has a program called SASH – the Single-Family Affordable Housing program. This gives incentives ($3 per watt of solar you have installed) to low-income homeowners to help offset the upfront costs of putting solar on your home. This is available for those who have PG&E, SCE or SDG&E as their power company.

Multifamily Affordable Solar Housing

This program, called MASH for short, is not currently open to new applications. However, there may be a waitlist available. If available, it provides incentive rates ($1.10 – $1.80 per watt of solar installed) for qualifying multifamily affordable housing.

Local Incentives

Some cities in CA offer rebate programs for those who go solar. However, many of these have expired. But it’s worth checking into to see if there’s anything available in your area.

Is Solar Worth It In California?

California has some of the highest electricity rates in the U.S. Rates are a little over $0.23 per kWh (kilowatt-hour) and that is up from right around $0.20 just last year! This is pushing the average electric bill in CA to around $130 / month.

With these high rates, abundant sunshine, and all the incentives listed above, solar is definitely worth it for many California homeowners.

Just the cost savings alone are pretty impressive. Estimates show the average California homeowner can save $40,000, $50,000, or even much more over 20 years by switching to solar electricity. And that doesn’t even include the environmental benefits, increased property values, and energy independence.

So, yes, for many (but not all) in The Golden State, solar makes a whole lot of sense!

Why NOW Is the Time To Act

Right now may pose a Golden Opportunity for those wanting to go solar that may not last much longer. Why?

  • While solar panel costs are still low, reports are that due to tariffs on imported solar panels, material shortages and supply chain issues, costs for solar panels may be going up quite a bit
  • As mentioned above, the 26% federal tax rebate is going away after 2022 so you could lose out on free money from the government (This is no longer the case with the August 2022 passage of the Inflation Reduction Act which increased the federal tax credit and extended it close to 10 years.)
  • Due to increasingly violent weather and power grid problems, there is no short-term solution for the more frequent, prolonged power outages that have impacted many areas of the state
  • The longer you hold off, the more you miss out on saving money on your energy bill

So if you haven’t already, you should at least get a solar savings estimate to see how much you could save.

It’s hard to know who to trust which is why we’ve partnered with the #1 Solar Advisor in the U.S., UnderstandSolar. They have relationships with the largest, most trusted solar installers to provide homeowners with free, accurate, no-obligation solar savings estimates.

If you are serious about going solar – and finding out how much you can save – the only way to get good, accurate information is to talk to a knowledgeable, trusted local installer.

To get started, just enter your zip code below and fill out the form on UnderstandSolar’s site to get an accurate savings estimate from a trustworthy local company. The representative that contacts you won’t bite (we promise!) and, if you’re not ready to go solar, then you can just say no thank you. But at least you’ll do know knowing you’ve made an informed decision.

And, by taking this first step now, you may just end up saving yourself a HUGE amount on your electric bills in the years and decades to come. So get a savings estimate now while you can still take advantage of low solar panel costs and free money from the government.