What’s the Cost of Solar in California?

Cost of Grid Power

California electricity prices average $0.19/kWh, well above the national average of $0.14/kWh. This may help explain why California has the second-lowest per capita residential energy consumption in the country.

In 2018 renewables accounted for nearly half of in-state power generation. While California does need to import one third of all the electricity consumed in the state, about half of that is from renewables. California leads in automotive greening - in 2019 a quarter of all electric vehicle charging stations were located in the state. Perhaps most importantly, as of 2020 California requires solar PV installs on all new homes.

Cost of a Solar Install

The average cost of a 5kW (equivalent to saving almost 100 trees a year) solar system starts around $16,000. Before any incentives, in the first year you’d save about $1,200, compared to if you had been paying the normal rates for the energy you used. These savings can continue for well over 25 years, improving with inflation.

---

altE in California

We're proud to have sold fifteen hundred solar power systems since 2016 in California. In September 1, 2019 we acquired California-based Real Goods, known for selling the first retail solar panel in the US back in 1978. Real Goods moved to a new warehouse in Ukiah California, and has experienced rapid growth since. Learn more about them here.

---

Just How Much Can I Save With Solar in California?

This depends on may factors such as your system size, power output, and financing. Here are the main ways you can finance your home solar power system, and the kinds of returns you may expect to see:

Out-of-Pocket

From our example above, the homeowner purchased a 5kW system to offset their energy bill. Overhead cost was $16,640, with a significant proportion returned in the first year through incentives, rebates, and savings, then paying itself in full over 6 years.

Most solar power systems have a warranty lifetime of 25 years.In that time, between incentives and paying lower rates you could make a profit of around $45,000 - more than twice the up-front cost of the system! Even with occasional maintenance or part replacement, that is a massive savings. Solar panel power output falls on average 0.8% per year, so with a little TLC and load management you can extend the life of your system well beyond the warranty’s expiration date, continuing to save indefinitely.

Solar Loan

Whether or not you can afford the up-front cost of the install, you may want to consider a Home Equity Line of Credit (HELOC). With equity in your home, or good credit, you may qualify for a 15-year solar HELOC with fixed rate of 4% or lower.

Starting with that same 5kW system costing $16,640 but with zero up-front cost, accounting for incentives, credits, rebates, and annual energy savings starting around $1,200, you could see a revenue surplus of about $4,300 at the end of the first year.

In the first fifteen years, while paying off the loan, you could expect to make only $4 per month as your energy savings slightly outpace the loan payments. Once the loan is paid off, you can expect to save about $1,200 a year. Over 25 years you could expect to make about $39,000.

---

What Incentives are Available in California?

Data from DSIRE. For more info visit: https://www.dsireusa.org/

Name	Implementing Sector	Program Type	Administrator	DSIRE ID
City of Davis - Green Power Purchasing	Local	Green Power Purchasing		122
Small Business Energy Loan Program	State	Loan Program	California Energy Commission	126
City of Los Angeles - Zoning Code	Local	Solar/Wind Access Policy		253
City of Sacramento - Zoning and Subdivision Regulations	Local	Solar/Wind Access Policy		255
City of San Diego - Planned Development Regulations	Local	Solar/Wind Access Policy		258
Public Benefits Funds for Renewables and Efficiency	State	Public Benefits Fund		407
Palo Alto - Solar Access	Local	Solar/Wind Access Policy		445
Los Angeles - Contractor Licensing	Utility	Solar/Wind Contractor Licensing		472
Property Tax Exclusion for Solar Energy Systems	State	Property Tax Incentive	California State Board of Equalization	558
Tax Deduction for Interest on Loans for Energy Efficiency	State	Personal Tax Deduction	California Franchise Tax Board	657
Tax Rate on Ethanol or Methanol	State	Corporate Tax Exemption	California Franchise Tax Board	890
City of San Francisco - Solar Program	Local	Green Power Purchasing		1039
City of Santa Cruz - Solar Access Ordinance	Local	Solar/Wind Access Policy		1107
Santa Cruz County - Solar Access Protection	Local	Solar/Wind Access Policy		1113
Marin County - Solar Access Code	Local	Solar/Wind Access Policy		1114
City of Palo Alto Utilities - Renewable Energy Credit Purchase Program	Utility	Performance-Based Incentive		2873
Local Option - Municipal Energy Districts	State	PACE Financing		3526
Local Option - Municipal Energy Districts	State	PACE Financing	California Energy Commission	3527
County Wind Ordinance Standards	State	Solar/Wind Permitting Standards		3729
City of Los Angeles - Green Building Retrofit Requirement	Local	Energy Standards for Public Buildings		4708
LADWP - Net Metering	Utility	Net Metering		4855
Orange County - Development Standards for Small Wind Energy Systems	Local	Solar/Wind Permitting Standards		4924
Riverside County - Sustainable Building Policy	Local	Energy Standards for Public Buildings		4934
CaliforniaFIRST	State	PACE Financing	Renewable Funding	5309
Statewide Solar Permitting Standards	State	Solar/Wind Permitting Standards		5315
Partial Sales and Use Tax Exemption for Agricultural Solar Power Facilities	State	Sales Tax Incentive	California State Board of Equalization	5351
LADWP - Feed-in Tariff (FiT) Program	Utility	Performance-Based Incentive		5365
Burbank Water and Power - Solar Water Heater Rebate Program	Utility	Rebate Program		5428
PG&E - Non-Residential Energy Efficiency Financing Program	Utility	Loan Program		5620
City of Lancaster - Mandatory Solar Requirement for New Homes	Local	Building Energy Code		5624
City of Sebastopol - Mandatory Solar Requirement for Residential and Commercial Buildings	Local	Building Energy Code		5625
Renewable Market Adjusting Tariff (ReMAT)	State	Feed-in Tariff		5665
LADWP - Feed-in Tariff (FiT) Program	Utility	Feed-in Tariff		5685
City of Palo Alto Utilities - PV Partners Program	Utility	Rebate Program		5788
Lodi Electric Utility - Commercial and Industrial Energy Efficiency Loan Program	Utility	Loan Program		5854
San Bernardino County – Accessory Wind Energy System Permit	State	Solar/Wind Permitting Standards		5899
San Bernardino County – Accessory Wind Energy System Permit	Local	Solar/Wind Permitting Standards		5901
Los Angeles County - WECS-N and Temp Met Towers	Local	Solar/Wind Permitting Standards		5904
San Bernardino County - Solar Energy Development Standards	Local	Solar/Wind Permitting Standards		5905
City of San Francisco - Green Building Requirements for City Buildings	Local	Energy Standards for Public Buildings	Municipal Green Building Task Force	5906
City of Long Beach - Green Building Policy for Municipal Buildings	Local	Energy Standards for Public Buildings		5907
City of Oakland - Green Building Policies and Requirements	Local	Building Energy Code	City of Oakland Planning and Building	5908
Anaheim Public Utilities - Comprehensive Energy Audit	Utility	Energy Analysis	Anaheim Public Utilities	14221
Anaheim Public Utilities - Customized Energy Incentives	Utility	Energy Analysis	Anaheim Public Utilities	14222
Anaheim Public Utilities - Small Business Energy Management Assistance	Utility	Energy Analysis		14234
Burbank Water & Power - Business Bucks Program	Utility	Energy Analysis	Burbank Water and Power	14247
California Center for Sustainable Energy - Energy Efficiency Programs	Non-Profit	Energy Analysis	California Center for Sustainable Energy	14255
Glendale Water & Power - Business Energy Solutions (BES)	Utility	Energy Analysis	Glendale Water & Power	14271
Los Angeles Department of Water and Power - Energy Load Monitoring (ELM) Program	Utility	Energy Analysis	Los Angeles Department of Water and Power	14296
PG&E - Energy Training Center	Utility	Training and Information	Pacific Gas and Electric Company (PG&E)	14321
PG&E - Food Service Technology Center	Utility	Energy Analysis	Pacific Gas and Electric Company (PG&E)	14322
PG&E - Pacific Energy Center	Utility	Energy Analysis		14325
Sacramento Municipal Utility District - Savings by Design: New Construction and Major Remodel Projects	Utility	Energy Analysis	Sacramento Municipal Utility District	14369
San Diego Gas & Electric - Business Energy Solutions Program	Utility	Energy Analysis	San Diego Gas & Electric	14382
San Diego Gas & Electric - Premium Efficiency Cooling	Utility	Training and Information	San Diego Gas & Electric	14400
San Diego Retrocommissioning Program - Retrocommissioning Program	Other	Energy Analysis	San Diego Retrocommissioning Program	14402
San Francisco Department of the Environment - Energy Watch Commercial Program	Local	Energy Analysis	San Francisco Department of the Environment	14403
Southern California Edison - Saving Solutions for Business	Utility	Energy Analysis	Southern California Edison	14434
Modesto Irrigation District - Energy Survey	Utility	Energy Analysis	Modesto Irrigation District	16033
Riverside Public Utilities - Energy Load Profiler	Utility	Energy Analysis	Riverside Public Utilities	16054
San Diego Gas & Electric - Small Business Energy Efficiency Workshops	Utility	Training and Information		16059
Southern California Edison - SCE EnergyManager	Utility	Energy Analysis	Southern California Edison	16065
SoCalGas - Energy-Efficiency Assessments for Industrial Customers	Utility	Energy Analysis	Southern California Gas Company	16462
Glendale Water & Power - Smart Business AC Tune-up	Utility	Other	Glendale Water & Power	16568
City of Palo Alto Utilities - Right Lights+	Local	Energy Analysis	City of Palo Alto Utilities	16580
City of Palo Alto Utilities - Solar Water Heating Program	Local	Other	City of Palo Alto Utilities	16583
Berkeley Office of Energy and Sustainable Development - SmartSolar Program	Other	Energy Analysis	Berkeley Office of Energy and Sustainable Development	17443
Berkeley Office of Energy and Sustainable Development - Commericial Solar Photovoltaic Permit Guide	Other	Training and Information	Berkeley Office of Energy and Sustainable Development	17445
Berkeley Office of Energy and Sustainable Development - Solar Thermal Hot Water Installations	Other	Training and Information	Berkeley Office of Energy and Sustainable Development	17446
PG&E - InterAct Energy Management Tools	Utility	Energy Analysis	PG&E	17506
Merced Irrigation District - eMeter Manager	Utility	Energy Analysis	Merced Irrigation District	17507
U.S. Department of Energy - Industrial Assessment Center (IAC): San Diego State University	Federal	Energy Analysis	U.S. Department of Energy	17597
U.S. Department of Energy - Industrial Assessment Center (IAC): San Francisco State University	Federal	Energy Analysis	U.S. Department of Energy	17598
Southwest Gas Corporation - Industrial Energy Assessments	Other	Energy Analysis	Southwest Gas Corp., California Div.	17886
Palo Alto Utilities Dept. - Right Lights+ Program	Other	Energy Analysis	Palo Alto Utilities Dept.	18115
Sacramento Municipal Utility District - Online Energy Audit for Businesses	Utility	Energy Analysis	Sacramento Municipal Utility District	18927
Anza Electric Cooperative - Free Energy Audit	Utility	Energy Analysis	Anza Electric Cooperative, Inc.	19037
Los Angeles Department of Water and Power - RCx Express program	Utility	Energy Analysis	Los Angeles Department of Water and Power	19331
Sacramento Municipal Utility District - Learn Energy Efficiency	Utility	Training and Information	Sacramento Municipal Utility District	19489
Silicon Valley Power - Energy Design Assistance	Utility	Energy Analysis	Silicon Valley Power	20400
Roseville Electric - Facility Assessment Wizard	Utility	Energy Analysis	Roseville Electric	20577
Pasadena Water and Power - Green Power Program	Utility	Other	Pasadena Water and Power	20946
Southwest Gas Corporation - Industrial Services	Utility	Energy Analysis	Southwest Gas Corp., Arizona Div.	21558
Pacific Gas and Electric Company (PG&E) - Savings by Industry	Utility	Training and Information	Pacific Gas and Electric Company (PG&E)	21976
Sales and Use Tax Exemption for Electrical Power Generation and Storage Equipment	State	Sales Tax Incentive		22047
Sales and Use Tax Exemption for Electric Power Generation and Storage Equipment	State	Sales Tax Incentive	California Department of Tax and Fee Administration	22048
Burbank Water and Power - LEED Certification Incentive Program	Utility	Green Building Incentive		22065
Burbank Water and Power - LEED Certification Incentive Program	Utility	Rebate Program	Burbank Water and Power	22066
Plumas-Sierra REC - Commercial and Irrigation Rebate Program	Utility	Rebate Program	Plumas-Sierra REC	22067
energy storage	State	Corporate Tax Credit		22069
Redding Electric - Commercial Energy Efficiency Rebate Program	Utility	Rebate Program	Redding Electric Utility	22070
Electrify Marin - Natural Gas Appliance Replacement Rebate Program	Local	Rebate Program		22106
Marin County Residential Rebate Program	State	Rebate Program		22107
Energy Storage Procurement Target	State	Energy Storage Target	California Public Utilities Commission	22112

---

Resources

• California Energy Commission
• California Public Utilities Commission (CPUC)
• California Center for Sustainable Energy
• U.S. Energy Information Administration (EIA): California
• National Renewable Energy Laboratory (NREL): California