Guide to Solar Panels in California in 2023
How Much Do Solar Panels in California Cost?
The Golden State is one of the best places in the country for installing solar panels thanks to plenty of sunlight hours and the 6th highest residential electricity prices.
The exact cost and savings of your system may vary depending on several factors, including:
- The size of your system
- Your current energy usage
- Your current electricity rates
- Any incentives in your area
- The size and layout of your roof
- Preference of loan or cash financing
With Palmetto, the cost of solar panels in California starts at $85 per month for a loan.1
4 Reasons Why It’s Worth Going Solar in California
Mitigate Outages
Add battery storage to your solar system and rely on clean energy if and when outages roll through.Count On Savings
The sun is relentlessly shining energy upon us. Solar panels take advantage of this by providing you with consistent, reliable power.Lower Your Footprint
Unlike fossil fuels, solar energy is both clean and renewable—a better solution for your home, your community, and the environment.Increase Home Value
Planning to sell? Solar-powered homes have been shown to stand out, earn more, and sell faster in the national real estate market.
Learn How Solar Works in California
California homeowners who install solar panel systems utilize net metering and switch to time-of-use electric rate structures. Here’s how those work:
- Net metering, or NEM 3.0, allows you to earn credits toward your utility bill for the excess electricity your PV system generates and sends to the electric grid. These credits can be used to offset retail electricity purchased during other time periods, like at night.
- Time-of-use (TOU) rates work by charging homeowners different rates for their energy usage based on the time of day that the energy is being used. Rates increase during peak periods like the late afternoon and evening and decrease when demand is low, such as late at night. Peak hours in PG&E, SCE, and SDG&E are 4-9 p.m. every day.
California recently implemented a new version of net metering called NEM 3.0, or net billing. Any solar energy not immediately used in the home will be sent to the grid and earn credit at the “avoided cost” rate—or the value your utility provider pays to purchase energy from power generators. The new export rates vary by utility and by the hour each day. Learn more about NEM 3.0 and how it works.
Available Solar Incentives in California
Rebate programs were once the key to driving down solar costs, but most California homeowners can now see significant savings even without utility incentives! California homeowners who purchase solar may be eligible to receive the following:
- Residential Clean Energy Credit: Most solar energy installations are eligible for the Residential Clean Energy Credit, which allows you to deduct up to 30% of your solar system’s installation costs from your total tax liability for the year of purchase.
- Solar Energy System Property Tax Exclusion: California homeowners who install an active solar system onto their home or build a house with rooftop solar included won’t have their property taxes increased until 2025.
- Local Utility Rebates: Some local electric cooperatives and municipal utilities may offer solar rebate programs to offset the cost of your renewable energy system even further.
Frequently Asked Questions
How does solar work with my utility provider in California?
Palmetto will manage the solar interconnection application process with your utility. Once the system is installed, we will submit the required documentation. Your utility will grant Permission to Operate (PTO), and enable net metering credits on your bill. Palmetto works with the 4 largest utilities today, and plans to operate in more utilities soon.
Southern California Edison (SCE)
- 4.37 Million Customers
- 370,000 residential solar installations
- Generating your own power
- Time-of-use plans
- 1.26 million customers
- 190,000 residential solar installations
- Support for solar customers
- Getting started with Solar
- 4.45 million customers
- 525,000 residential solar installations
- How to read your bill
- Customer guide to going solar
- 1.35 million customers
- 51,000 residential solar installations
- Understanding your electric rates
- Understanding your LADWP solar bill
What are net metering and net billing?
Net energy metering (NEM) is a unique billing arrangement that allows solar owners to earn credits on their electricity bill in exchange for the excess solar energy their panels generate and add to the grid. These credits can be used to offset the cost of electricity that solar owners need to pull from the grid when the sun isn’t shining, like at night.
Net billing, or NEM 3.0, works similarly, but how the utility provider credits homeowners is a bit different. Excess solar that homeowners add to the grid will be credited at the avoided cost rate—or the price a utility provider would otherwise pay to produce the same power itself or purchase from a power plant. The avoided-cost rate changes every hour but tends to average around 4 to 8 cents/kWh.
Net billing only applies to California’s three investor-owned utility companies:
- Pacific Gas & Electric (PG&E)
- Southern California Edison (SCE)
- San Diego Gas & Electric (SDG&E)
Municipal and cooperative utilities, such as Los Angeles Department of Water and Power (LADWP) adopt their own policies. LADWP currently offers 1-to-1 net metering credits at the same rate the utility charges you for consuming electricity.
To learn more about net billing, visit: NEM 3.0: Learn about California's net billing program
What are time-of-use rates?
A time-of-use rate is a type of billing structure in which the amount you pay for electricity is based on the time of day when you use it. This method, also known as TOU rates, determines how you as the homeowner will be billed for your electricity usage.
In instances where TOU rates are active, the utility company will charge more for electricity when the demand for electricity is higher since they are spending more to meet the increased usage from all of the customers in their service area. Rates, subsequently, are lower during times of low demand, such as early mornings and nights, when the weather is cooler and people are winding down.
Learn more about time-of-use rates here
How long do solar panels last?
The first solar cells were manufactured by Bell Laboratories in the late 1950s and are still functional today. Likewise, panels installed on homes in the 1970s and ’80s continue to generate power. Most solar modules today have a 25-year power output warranty and may continue to produce power well beyond that point. Homeowners interested in additional protection and savings can enroll in Palmetto Protect and earn quick access to energy monitoring, dedicated customer support, exclusive discounts, and best-in-class maintenance services.
Where do I start? It seems complicated.
You're right, solar energy can feel very complex, especially if you're researching providers, technologies, incentives, municipal requirements, permits, the list goes on. That’s why Palmetto created end-to-end solar energy solutions allowing you to plug into savings with less time and no hassle. From financing and design to installation, production monitoring, and maintenance, our dedicated Customer Experience Team is here to answer questions, address concerns, and guide you through every step of the process. Visit our product pages to learn more about Palmetto’s solar and storage solutions.
Will solar panels work with my roof?
Before designing your custom solar solution, we’ll take a detailed survey of your property and assess the solar energy potential of your roof. Beyond the size, angle, and orientation of your roof, we’ll look at shading, estimated tree growth, materials, ventilation and drain pipes, and the overall condition. Because solar panel arrays can last 25-30 years without the need for repair or replacement, it’s important the roof beneath is in good shape. In some cases, it may be advisable to have your roof repaired or replaced entirely before the installation of solar panels can begin.
How much of my home can be powered by solar panels?
That depends on your overall household energy usage relative to the total capacity of your solar array. Many homeowners desire a system size producing 100% of their energy usage needs, but they may not always be possible. Alternatively, if you plan to change your behavior, such as by purchasing an electric vehicle, you may wish to go a little larger than historical usage.
How much does a solar power system cost?
The cost of your solar power system will vary based on a number of factors including your location, the size of your solar array, installation fees in your area, and if you desire energy storage for backup power. That said, solar technologies have never been more efficient or affordable.
Does my solar array come with a warranty?
What happens if I produce more solar power than I need?
Your home will still be connected to the electric grid so you have power when your system is not producing. Excess energy produced beyond what your home is using at any moment can flow back into the grid, and will earn you credit on your electricity bill. If you choose to integrate energy storage with your solar power system, any excess energy that is produced and not immediately used by your household will function to charge your battery. This, in turn, allows you to access stored solar power for your home when energy usage exceeds production, and provide valuable backup power during an outage.
Will I still receive an electric bill with solar panels?
Yes, almost all solar customers maintain a connection to the grid, even those with battery storage, which means you will still receive an electricity bill, though you can dramatically reduce the amount you pay each month thanks to the energy produced by your solar panels.
If there is a power outage, will my power go out?
- The size and production of your solar panels
- The size of the battery system
- The battery state of charge when the outage occurs
- The areas or appliances in your home that are prioritized to receive power when the grid goes down.
