Solar Guide
Solar in Los Angeles
Los Angeles homeowners are exploring solar power as California ranks 1st for residential solar installations and electricity prices have increased 56% from 2020 to 2024. With year-round sunshine, LA offers ideal conditions for harnessing clean energy.
Understanding your solar options is key to reducing energy costs. Our comprehensive guide to home solar panels provides the information you need for this important decision.
CALIFORNIA by the Numbers
Key Takeaways
- Los Angeles enjoys excellent solar conditions with year-round sunshine and high electricity rates averaging 31.9¢/kWh, making solar a smart investment.
- California homeowners save an average of $5,824 through the federal tax credit plus state incentives and property tax exemptions.
- A typical 6.72 kW system costs $13,590 after incentives and saves Los Angeles homeowners over $105,000 in 25 years.
Solar Cost Calculator
Our calculator uses real installation data from thousands of Palmetto customers across Los Angeles neighborhoods like Beverly Hills, Santa Monica, Pasadena, and Burbank. Get personalized solar costs based on actual local installations, not estimates.
System
Cost
Savings
Los Angeles Electricity Prices
Los Angeles electricity rates have climbed dramatically, making solar an increasingly attractive option for homeowners seeking energy independence.
California electricity costs jumped from 22.8 cents per kWh in 2021 to 31.9 cents in 2024—nearly double the national average of 16.5 cents.
Solar panels generate clean electricity at a fixed cost, protecting homeowners from these rising utility rates while reducing monthly energy bills.
Over 25 years, solar systems can save thousands of dollars compared to traditional grid electricity, providing predictable energy costs and long-term value.
Price of Energy: California vs National Average
Los Angeles Area Utility Providers
Los Angeles residents receive electricity from four main utilities with varying rates. In 2023, costs ranged from 17.5¢ to 32.3¢ per kWh, compared to the 16.0¢ national average.
Most LA utilities charge above the national average due to California’s renewable energy mandates, infrastructure costs, and environmental regulations. However, rates remain below the state average of 29.5¢.
Higher electricity rates mean greater potential savings from solar energy. When utility costs exceed national averages, homeowners can offset more expensive grid electricity with clean, self-generated power.
Los Angeles Utilities Electricity Rates
California Solar Incentives
Los Angeles homeowners can significantly reduce solar installation costs through federal and state solar incentives in California.
California offers property tax exemptions, special programs for disadvantaged communities, and equity funds to make solar panel installation more affordable for LA residents.
These solar incentives change frequently, so research current programs and act promptly to maximize your savings.
$5,824
Average savings in California solar rebates
Incentive | Type | Description | Source |
---|---|---|---|
Residential Clean Energy Credit | Federal tax credit | A federal tax credit worth 30% the cost of a solar panel system in the year it’s installed | Learn More |
Property Tax Exemption | State tax exemption | Any increase in value to your home tied to installing solar panels will not be taxed. | Learn More |
Disadvantaged Communities Single-Family Affordable Solar Homes (DAC-SASH) Program | State program | If you meet key criteria on being in a disadvantaged community you will receive a generous incentive to install solar of $3 per watt. This can add up to $15,000 for a small system of kW. | Learn More |
Equity Fund | State program | If you meet certain criteria, California is offering rebates that help bring some of the original Net Metering benefits to lower income communities that missed out when CA switched to NEM3.0 | Learn More |
The Residential Clean Energy Credit lets people claim a tax credit worth 30% the cost of a solar panel system in the year it’s installed. The credit can only be used against taxes you owe or have already paid that year, but any excess credit can be rolled over to future years.
The credit is broadly available, though there are a few restrictions — you must own the panels and they must be on a house you live in — so be sure to consult a tax professional about your situation.
California’s Active Solar Energy System Property Tax Exclusion prevents your property taxes from increasing when you install a qualifying solar energy system on your home. This state incentive works as a “new construction exclusion,” meaning that while your solar system adds value to your property, that added value won’t be assessed for property tax purposes. Your existing property tax assessment stays the same, saving you money every year for as long as you own your home.
The financial benefit varies based on your solar system’s value and local property tax rates, but it can save homeowners hundreds to thousands of dollars annually. For example, if you install a $30,000 solar system in an area with a 1.2% property tax rate, you could save approximately $360 per year in property taxes. The exclusion applies to solar systems used for electricity production, water heating, space conditioning, and other qualifying purposes, but excludes solar pool heaters and hot tub heaters.
Most homeowners don’t need to file any paperwork – the exclusion is automatically applied when your county assessor receives your building permit. However, if you’re the first buyer of a newly constructed home with solar installed by the builder (completed after January 1, 2008), you may need to file form BOE-64-SES to claim the exclusion. The program is currently extended through the 2025-26 fiscal year and is scheduled to sunset on January 1, 2027, so installations must be completed before this date to qualify.
The Disadvantaged Communities Single-Family Affordable Solar Homes (DAC-SASH) Program is a California state initiative designed to make solar energy more accessible to homeowners in disadvantaged communities. This program provides upfront cash incentives to help offset the cost of installing a solar energy system, making clean energy more affordable for qualifying households.
The program offers up to $3 per watt in fixed, capacity-based incentives. For example, if you install a 6-kilowatt solar system, you could receive up to $18,000 in upfront incentives to reduce your installation costs.
To qualify for DAC-SASH, you must own and live in your home, receive electricity service from PG&E, Southern California Edison, or San Diego Gas & Electric, and be enrolled in or eligible for the CARE or FERA income-qualified utility programs. Additionally, your property must be located in a designated disadvantaged community area. If you think you might qualify, you can visit the GRID Alternatives website to learn more about the application process and check your eligibility.
The Equity Fund is a California state program that provides battery storage rebates specifically for low-income households and disadvantaged communities. Created in 2022 with $630 million in funding under Assembly Bill 209, this program addresses the fact that previous solar incentives mainly benefited higher-income families by focusing support on those who need it most.
Eligible homeowners can receive rebates of $150, $850, or $1,000 per kilowatt-hour of battery storage capacity they install. The higher rebate amounts ($850-$1,000 per kWh) are available for customers enrolled in CARE or FERA utility assistance programs, those living in disadvantaged communities, California tribal areas, high fire-risk zones, or areas with frequent power outages. To qualify, you must be enrolled in California’s CARE/FERA programs, live in a designated disadvantaged community, or reside in a California tribal area. Additionally, participants in these programs receive enhanced net billing credits under California’s NEM 3.0 program and can save approximately 18-35% on their electric bills through CARE/FERA discounts.
Net Billing in California is the current system that determines how much credit you receive for excess solar energy your system sends back to the electric grid. Unlike the previous net metering system, Net Billing provides export credits based on the time of day and utility company’s avoided cost calculations, rather than a simple 1:1 credit for energy produced.
The financial benefits vary significantly by utility company and time of export. For the three major investor-owned utilities (PG&E, SCE, and SDGE), the new ‘NEM 3’ system launched April 15, 2023, provides hourly export credits that change based on grid demand – typically ranging from 3-5 cents per kWh during annual true-up periods. Municipal utilities like LADWP still offer 1:1 net metering, while SMUD provides a fixed 7.4 cents per kWh export rate, and Imperial Irrigation District offers 6.98 cents per kWh with monthly settlement.
For the major utilities, customers who submitted complete interconnection applications by April 14, 2023, may qualify for the more favorable NEM 2.0 grandfathering, but cannot increase their system size or decrease it by more than 20% without losing this benefit. New applications after this date automatically fall under the NEM 3 system with lower export credit rates.
Important considerations include understanding that excess credits are typically settled annually during your true-up month, and the export credit values are generally much lower than your retail electricity rates. This makes maximizing self-consumption of your solar energy more important than ever for optimizing your financial returns from solar investment.
Ready to start saving with solar?
Speak with a Palmetto solar expert to find out exactly how much you can save with California incentives.
Get a Free QuoteLos Angeles Solar Irradiance
Solar panel production varies throughout the year based on daylight hours, weather patterns, and sun intensity. Understanding how seasons affect your solar system helps set realistic expectations for your investment.
Los Angeles enjoys abundant sunshine year-round, though marine layer and seasonal variations affect solar production. Even cities with challenging weather can achieve excellent solar performance.
Solar Production in Los Angeles by Month
What Can Your Solar System Power?
Summer Production (July)
In July, your 10 kW system could power:
- 3.6 average homes (15 kWh/day per home)
- or Run central AC for 18 hours AND power all other appliances
- or Fully charge 5.4 Tesla Model 3 electric vehicles
Winter Production (December)
In December, your 10 kW system could power:
- 2 average homes (15 kWh/day per home)
- or Keep your home heating system running for 15 hours
- or Fully charge 3 Tesla Model 3 electric vehicles
Annual Production
Over a year, your 10 kW system could:
- Offset 10 tons of carbon dioxide emissions
- or Equal the environmental benefit of planting 175 trees
- or Save approximately $4,234 in electricity costs
Want to know exactly how much solar can power your home?
Get a personalized solar analysis based on your actual home, energy usage, and roof characteristics.
Get My Custom EstimateSolar Installations in Los Angeles
We’ve mapped every solar installation across the United States to show you something exciting: your Los Angeles neighbors are embracing clean energy! Explore this interactive map to discover which communities have made the switch to solar.
Leasing Solar Panels
Los Angeles residents have excellent solar financing options through Palmetto. Based on your utility provider, different solutions are available across the LA area.
Most Los Angeles homes are served by Southern California Edison (SCE), San Diego Gas & Electric (SDGE), or Pacific Gas & Electric (PGE), which qualify for our Power Purchase Agreement (PPA) option. With a PPA, you pay only for the clean energy your panels produce at a set rate per kilowatt-hour, typically lower than utility rates. Homes served by Los Angeles Department of Water & Power (LADWP) can access our solar lease program, offering predictable monthly payments regardless of production.
These financing options eliminate upfront costs and include system monitoring, maintenance, and repairs. Unlike purchasing outright, you avoid large initial investments and ongoing maintenance responsibilities while immediately reducing your electricity bills. Learn more about solar financing options or explore our LightReach program for hassle-free solar access.
Go solar without the investment
With LightReach, there are no investment costs to recoup, loan payments to manage, or maintenance needs to take on. As soon as your panels are active, your solar savings are too!
Learn MoreFrequently Asked Questions
Yes, solar makes excellent sense in Los Angeles. The city enjoys abundant year-round sunshine and high electricity rates averaging 31.9¢/kWh, creating ideal conditions for solar savings.
A typical 6.72 kW system costs $13,590 after incentives and saves LA homeowners over $105,000 in 25 years. With California’s federal tax credits and property tax exemptions, most systems pay for themselves in under 5 years while providing decades of clean energy.
Los Angeles has different net metering policies depending on your utility provider. Most LA residents served by Southern California Edison, San Diego Gas & Electric, or Pacific Gas & Electric fall under California’s NEM 3.0 ‘Net Billing’ system, which provides hourly export credits based on avoided costs rather than 1:1 retail rates.
However, Los Angeles Department of Water & Power (LADWP) customers still enjoy traditional 1:1 net metering, where excess solar energy is credited at full retail rate. This makes LADWP one of the most favorable utilities in California for solar customers.
Yes, solar panels increase home value in Los Angeles. Research from Zillow shows solar panels increase home value by 4.1% on average across the United States.
In LA’s competitive real estate market, solar installations make homes more attractive to buyers seeking lower energy costs and environmental benefits. California’s property tax exemption means you won’t pay additional taxes on the added value, maximizing your investment return.
Solar costs in Los Angeles range from $10,562 to $17,274 after federal tax credits, depending on your home size and energy needs.
A typical medium-sized home needs a 6.72 kW system costing $13,590 after the 30% federal tax credit. This system saves LA homeowners over $105,000 in 25 years with current electricity rates of 31.9¢/kWh.
Yes, solar is financially worth it in Los Angeles. With electricity rates at 31.9¢/kWh and abundant sunshine, solar systems typically pay for themselves in 4-5 years while providing 25+ years of savings.
A typical LA home saves over $105,000 in 25 years after system costs. Federal tax credits reduce upfront investment by 30%, and California’s property tax exemption adds value without increasing taxes.
We’re proud to serve Los Angeles homeowners with reliable solar installations and excellent customer service. As a national company with local focus, we’ve completed over 7,123 installations across California since 2020.
Our comprehensive approach includes some of the industry’s best financing options, a trusted installation network, and ongoing support throughout your solar journey. We make the transition to clean energy simple and affordable for LA residents.