Sacramento, CA Solar Panels
Solar Power in Sacramento
Sacramento homeowners are turning to solar energy in record numbers—and for good reason. With California electricity prices increasing 56% from 2020 to 2024, solar panels for your home offer a practical way to take control of rising energy costs.
This guide walks you through everything you need to know about Sacramento solar installation, from understanding local incentives to choosing the right system for your home.
CALIFORNIA by the Numbers
How Much Do Solar Panels Cost in Sacramento, CA?
Our calculator uses real installation data from Sacramento homes—including Elk Grove, Roseville, Folsom, and Citrus Heights—to show you accurate solar costs for your area. Get personalized estimates based on what your neighbors actually paid, not national averages.
System
Cost
Savings
You can still access the solar tax credit through Palmetto. Talk to us today to find out how.
Key Takeaways
- Sacramento receives abundant sunshine year-round with 5.8 peak sun hours daily, making it an excellent location for solar energy production.
- California electricity rates have jumped 40% since 2021 to 31.9¢ per kWh, while solar provides fixed energy costs for decades.
- A typical Sacramento solar system pays for itself in 6.3 years and can save homeowners over $100,000 over 25 years.
Sacramento Electricity Prices
Understanding electricity costs in Sacramento helps you make informed decisions about your home’s energy future and long-term budget planning.
California electricity rates have climbed from 22.8 cents per kWh in 2021 to 31.9 cents per kWh in 2024—a 40% increase in just three years. Sacramento residents now pay nearly double the national average of 16.5 cents per kWh.
Solar panels generate electricity at a fixed cost, protecting homeowners from these rate increases. By producing your own power, you reduce reliance on utility companies and gain more predictable monthly energy expenses over time.
Over a typical 25-year system lifespan, solar panels can shield your household from decades of utility rate increases. This long-term price stability becomes increasingly valuable as traditional electricity costs continue their upward trend.
Price of Energy: California vs National Average
Sacramento Area Utility Providers
Sacramento residents have two primary electricity providers: SMUD and PG&E. According to 2023 data, SMUD customers paid 16.9¢ per kWh, while PG&E customers paid 34.0¢ per kWh—significantly different rates for neighboring communities.
SMUD’s rates remain close to the 2023 national average of 16.0¢ per kWh due to its public utility structure and diverse energy mix. PG&E’s rates exceed both the national average and California’s state average of 29.5¢ per kWh, reflecting infrastructure costs and regulatory requirements.
For PG&E customers especially, solar panel costs can be offset by long-term savings on electricity bills. Even SMUD customers benefit as utility rates historically increase over time, while solar provides predictable energy costs for decades.
Sacramento Utilities Electricity Rates
California Solar Incentives
Sacramento homeowners have access to multiple state and local programs designed to reduce the upfront cost of going solar. Below, you’ll find a breakdown of solar incentives in California available to residents.
These incentives include property tax exemptions that protect your home’s increased value, specialized programs for disadvantaged communities, and equity funds that help offset changes to net metering policies. Each program has specific eligibility requirements worth exploring.
Incentive programs evolve as state policies change, so research current requirements carefully. Acting sooner rather than later ensures you can take advantage of programs before they’re modified or phased out.
| Incentive | Type | Description | Source |
|---|---|---|---|
| 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 |
California’s Property Tax Exemption for solar energy systems protects homeowners from paying additional property taxes when they install solar panels. Normally, home improvements that increase your property’s value result in higher property tax bills. However, this state tax exemption ensures that any added value from your solar installation is excluded from your property’s assessed value for tax purposes. This means you can enjoy the benefits of increased home value without the burden of increased annual property taxes.
The financial benefit varies based on your home’s location and the size of your solar system, but it can result in significant savings over time. For example, if your solar installation adds $20,000 to your home’s value and your property tax rate is 1.25%, you would save $250 per year in property taxes—adding up to $2,500 over ten years. This exemption is available to all California homeowners who install active solar energy systems on their property. The exemption remains in effect as long as you own the home, providing ongoing savings throughout your ownership. There are no application deadlines, as this is an automatic benefit that applies to qualifying solar installations.
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 financial 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 capacity-based incentives. For example, if you install a 5-kilowatt solar system, you could receive up to $15,000 in upfront incentives to reduce your installation costs. To qualify, you must own and live in your home, receive electrical service from Pacific Gas & Electric (PG&E), Southern California Edison (SCE), or San Diego Gas & Electric (SDG&E), be enrolled in or eligible for the CARE or FERA income-qualified utility bill programs, and live in a designated disadvantaged community (DAC) area. If you think you might qualify, you can learn more and apply through GRID Alternatives, which administers the program.
The Equity Fund is a California state program that provides rebates for home battery storage systems to help low-income residents afford clean energy storage. Created in 2022 through Assembly Bill 209, this $630 million fund offers incentives through the Self-Generation Incentive Program (SGIP) specifically for households enrolled in California’s CARE or FERA utility assistance programs, residents of Disadvantaged Communities, and California Tribal communities.
The rebate amount is based on your battery’s storage capacity and ranges from $150 to $1,000 per kilowatt-hour, depending on your specific circumstances. The higher rebate rates of $850 or $1,000 per kilowatt-hour are available if you’re enrolled in DAC-SASH, CARE, or FERA programs, or if you live in California tribal areas, fire-affected zones, high fire-risk areas, or regions with frequent power outages. For example, a 10 kilowatt-hour battery system could qualify for up to $10,000 in rebates at the highest tier.
To be eligible, you must receive electrical service from Pacific Gas & Electric (PG&E), Southern California Edison (SCE), or San Diego Gas & Electric (SDG&E), and meet the low-income qualifications through enrollment in CARE/FERA programs or residence in qualifying communities. It’s worth noting that CARE program participants also receive approximately 35% off their electric bills, while FERA participants receive approximately 18% off. Under California’s current net billing program (NEM 3.0), eligible community members can also receive enhanced bill credits for excess solar energy sent to the grid.
Net Billing in California is a program that credits you for the excess solar energy your system sends to the electric grid. Unlike older net metering programs that credited exports at retail rates, Net Billing (commonly called “NEM 3”) credits your excess solar at rates that vary by hour and reflect the actual value to the grid at that time. The credit you receive depends on when your solar system exports energy—typically, exports during peak demand hours (like late afternoon and evening) are worth more than exports during midday when solar is abundant.
The financial benefit varies significantly by utility and time of export. For the three major investor-owned utilities (PG&E, SCE, and SDGE), Net Billing began April 15, 2023, and uses an Avoided Cost Calculator to determine hourly export rates. Any unused credits are “trued up” annually during your anniversary month and paid out at approximately 3-5 cents per kWh. Imperial Irrigation District settles excess credits monthly at $0.0698/kWh. SMUD credits exports at 7.4 cents per kWh with monthly settlement. LADWP offers traditional 1:1 net metering where credits roll over indefinitely as dollar credits.
New solar customers with PG&E, SCE, or SDGE automatically fall under Net Billing if their interconnection application was submitted on or after April 15, 2023. If you submitted a complete application by April 14, 2023, you may qualify for the older NEM 2.0 program, but you cannot increase your system size at all or decrease it by more than 20% without losing that grandfathered status. Municipal utilities like LADWP and SMUD have their own programs and are not subject to the NEM 3 rules.
Because Net Billing credits vary by time of day, pairing your solar system with battery storage can significantly improve your financial returns. Batteries allow you to store solar energy generated during low-value midday hours and use it during high-cost evening hours, rather than exporting it at lower rates. This is an important consideration when designing your solar system under California’s current Net Billing structure.
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 QuoteSacramento 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.
Sacramento’s Mediterranean climate delivers abundant sunshine year-round, with minimal cloud cover and long summer days. Even foggy winter months produce strong solar output, making Sacramento ideal for solar energy production.
Solar Production in Sacramento 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 Panel Systems in Sacramento
We’ve mapped every solar installation across Sacramento to help you explore the clean energy movement in your community. Click any hexagon to see how many of your neighbors have already made the switch to solar power.
Leasing Solar Panels
Sacramento homeowners served by SMUD currently don’t have access to solar lease or PPA options through Palmetto. However, if you’re looking for ways to go solar without a large upfront investment, we offer alternative financing solutions.
Our LightReach program provides a flexible approach to solar energy. Instead of purchasing your system outright or managing loan payments, you can access solar power through a service agreement. This means no maintenance responsibilities, no equipment ownership concerns, and immediate savings on your electricity bills.
The key advantage is simplicity. You won’t need to worry about system repairs, monitoring performance, or dealing with equipment issues. Your solar panels start working for you from day one, reducing your monthly utility costs while Palmetto handles everything else. To explore whether leasing or buying solar makes more sense for your situation, speak with one of our solar advisors.
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 Sacramento. With 5.8 peak sun hours daily and abundant year-round sunshine, Sacramento offers ideal conditions for solar energy production.
California electricity rates have jumped 40% since 2021 to 31.9¢ per kWh. A typical Sacramento solar system pays for itself in about 6.3 years and can save homeowners over $100,000 over 25 years through reduced utility bills and protection from future rate increases.
Sacramento’s net metering depends on your utility provider. SMUD customers have a Net Billing program that credits excess solar at 7.4 cents per kWh with monthly settlement. PG&E customers fall under California’s NEM 3.0 (Net Billing), which provides hourly export credits based on time-of-day value to the grid.
Under NEM 3.0, exports during peak evening hours earn higher credits than midday production. Any unused credits are settled annually at approximately 3-5 cents per kWh. Pairing solar with battery storage helps maximize your savings by storing energy for use during high-value periods.
Yes, solar panels increase home value in Sacramento. Research from Zillow shows solar panels boost home values by an average of 4.1%. For a typical Sacramento home valued at $500,000, that translates to approximately $20,500 in added value.
California’s property tax exemption means you won’t pay higher property taxes on this increased value, letting you enjoy the financial benefit without additional tax burden. Solar panels make your home more attractive to buyers seeking lower energy costs and environmental benefits.
Solar costs in Sacramento depend on your home’s size and energy needs. Based on actual Palmetto installations, a typical 6.72 kW system for a medium-sized home costs approximately $19,414, or about $2.89 per watt.
A small home system (5.01 kW) runs around $15,088, while larger homes (8.80 kW) average $24,677. These prices reflect complete installation with quality equipment and professional service.
Yes, solar is financially worth it in Sacramento. With California electricity rates at 31.9¢ per kWh and climbing, a typical 6.72 kW system costs around $19,414 and pays for itself in approximately 6.3 years through utility bill savings.
Over 25 years, Sacramento homeowners can save over $100,000 while protecting themselves from future rate increases. Solar panels also increase home values by an average of 4.1% without raising property taxes, thanks to California’s property tax exemption.
At Palmetto, we combine national expertise with local focus to serve Sacramento homeowners. We’ve completed over 7,123 installations across California since 2020, bringing proven experience to every project.
We offer competitive financing options and work with trusted local installation partners who understand Sacramento’s specific requirements. Our team guides you through the entire process—from initial consultation to system activation—making solar accessible and straightforward for your home.