Nathan Healy
Certified by Nathan Healy
Updated: July 2025
Quality Solar Solutions Since 2011
Palmetto has served 20,000+ customers across 31 states with an approval rating over 85%.
01

Solar in Sacramento

Sacramento homeowners are turning to solar panel installation as California electricity prices have increased 56% from 2020 to 2024. With year-round sunshine and rising utility costs, solar offers a smart path toward energy independence.

Whether you’re exploring home solar panels for the first time or ready to make the switch, understanding your Sacramento solar installation options is key.

CALIFORNIA by the Numbers

6th Most residential solar in the United States
159k Households have installed solar panels
~$6k California average solar rebate savings
~$102k Sacramento average savings over 25 years
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Key Takeaways

  • Sacramento’s abundant sunshine and rising electricity costs make solar panels an excellent investment for local homeowners.
  • Federal tax credits can save you 30% on installation costs while California offers property tax exemptions for solar systems.
  • A typical 6.72 kW system costs $13,590 after incentives and can save over $101,000 in 25 years.
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Palmetto Reviews

04

Solar Cost Calculator

Our solar cost calculator uses real installation data from Sacramento neighborhoods including Midtown, East Sacramento, Natomas, and Elk Grove. Get accurate pricing estimates based on actual local projects, not generic estimates.

Small Home Up to 2,000 sq ft
Medium Home 2,000-3,000 sq ft
Large Home Over 3,000 sq ft
System Size
This system size is designed to offset approximately 100% of the average electricity usage for a home of this size in California.
Recommended
System
6.72 kW
Cost Breakdown
Your estimated investment
System Cost
$19414
Federal Tax Credit (30%)
$-5824
Final
Cost
$13590
Savings
Your total financial benefit
Monthly Savings
Average utility bill reduction
$232
Payback Period
Break-even point
4.6 years
25-Year
Savings
$101583
05

Sacramento Electricity Prices

Sacramento homeowners face some of the nation’s highest electricity costs, with rates climbing significantly faster than the national average.

California electricity rates jumped from 22.8 cents per kWh in 2021 to 31.9 cents in 2024—a 40% increase in just three years.

Solar panels help Sacramento families generate their own clean electricity, reducing dependence on the grid and protecting against these rising utility costs.

With decades of reliable energy production, solar systems provide long-term protection from escalating electricity rates while supporting California’s clean energy goals.

Price of Energy: California vs National Average

10¢
20¢
30¢
40¢
13.7¢
22.8¢
15.0¢
25.8¢
16.0¢
29.5¢
16.5¢
31.9¢
2021
2022
2023
2024
US Average
California

Sacramento Area Utility Providers

Sacramento residents face varying electricity costs depending on their utility provider, with 2023 rates ranging from SMUD’s 16.9¢ per kWh to PG&E’s 34.0¢ per kWh.

SMUD customers enjoy rates slightly above the national average of 16.0¢, while PG&E customers pay significantly more than California’s state average of 29.5¢ per kWh.

These rate differences highlight solar’s value proposition, especially for PG&E customers facing premium electricity costs that make solar savings more substantial over time.

Sacramento Utilities Electricity Rates

SMUD
16.90¢
+6%
PG&E
34.00¢
+112%
CA Average
29.50¢
+84%
US Average
16.0¢
06

California Solar Incentives

Sacramento homeowners can significantly reduce solar installation costs through various solar incentives in California and federal programs.

Federal tax credits allow you to deduct a percentage of your solar system costs from your taxes. California offers property tax exemptions and special programs for qualifying Sacramento residents.

These incentives change frequently, so research current programs thoroughly and consider acting 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 system’s value and local 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 (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 systems must be installed 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.

Eligible homeowners can receive 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 Pacific Gas & Electric (PG&E), Southern California Edison (SCE), or San Diego Gas & Electric (SDG&E), 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 may qualify, you can visit the GRID Alternatives website to learn more about the application process and verify 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 concern that previous solar incentives primarily 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 installed. The higher rebate amounts ($850-$1,000 per kWh) are available for customers enrolled in CARE or FERA utility assistance programs, residents of disadvantaged communities, California tribal areas, fire-prone regions, 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 actual value of your solar energy to the grid at the time it’s produced, rather than a simple 1:1 credit against your electric bill.

The financial benefits vary significantly by utility company and time of day. 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. Other utilities like SMUD offer a fixed export rate of 7.4 cents per kWh, while Imperial Irrigation District provides 6.98 cents per kWh with monthly settlement. LADWP maintains traditional 1:1 net metering as a municipal utility.

If you submitted a complete interconnection application before April 14, 2023, you may qualify for the more favorable NEM 2.0 grandfathering with the major utilities. However, any system size increases or decreases of more than 20% will move you to the new Net Billing structure. Most utilities settle excess credits annually during your anniversary month, though some like IID and SMUD settle monthly, and LADWP allows credits to roll over indefinitely.

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 Quote
07

Sacramento 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 brings abundant sunshine year-round, though seasonal variations affect solar output. Even cloudy winter months generate substantial clean energy with proper system design.

Solar Production in Sacramento by Month

Daylight Hours
Energy Production (kWh/day)

What Can Your Solar System Power?

Summer Production (July)

[SummerProduction] kWh/day

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)

[WinterProduction] kWh/day

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

[AnnualProduction] kWh/year

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 Estimate
08

Solar Installations in Sacramento

We’ve mapped every solar installation across America to show you something exciting: your Sacramento neighbors are embracing clean energy! Explore this interactive map to discover which communities have made the switch to solar.

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Leasing Solar Panels

Sacramento homeowners served by SMUD benefit from Palmetto’s Power Purchase Agreement (PPA) financing option, which lets you go solar with little to no upfront costs. With a PPA, you purchase the clean electricity your panels produce at a fixed rate per kilowatt-hour, typically lower than your current utility rate.

Unlike paying cash upfront and handling maintenance yourself, a solar PPA includes system monitoring, maintenance, and repairs throughout the agreement term. This means you can start saving on electricity immediately while Palmetto handles all technical aspects of your solar system.

Our LightReach program makes solar accessible to more Sacramento families by removing the barriers of large upfront investments and ongoing maintenance responsibilities, allowing you to enjoy clean energy benefits from day one.

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 More
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Frequently Asked Questions

Yes, solar makes excellent sense in Sacramento. With abundant year-round sunshine and electricity rates that have increased 56% since 2020, solar offers significant financial benefits for local homeowners.

A typical 6.72 kW system costs $13,590 after federal tax credits and can save over $101,000 over 25 years. Sacramento’s Mediterranean climate provides consistent solar production, making it an ideal location for solar investment.

Yes, Sacramento has net billing programs that vary by utility provider. Sacramento Municipal Utility District (SMUD) offers net billing with export credits of 7.4 cents per kWh, while PG&E customers follow California’s NEM 3.0 system with hourly export rates.

These programs allow you to receive credits for excess solar energy sent back to the grid, though rates are typically lower than retail electricity prices. The specific terms depend on your utility company and when your system connects to the grid.

Yes, solar panels increase home value in Sacramento, CA. A Zillow study shows solar panels increase home value by 4.1%, which translates to approximately $20,000-$30,000 for typical Sacramento home prices.

Sacramento’s strong solar market and high electricity costs make solar installations particularly attractive to buyers. California’s property tax exemption ensures you won’t pay additional taxes on the added value from your solar system.

Solar installation costs in Sacramento range from $10,562 to $17,274 after federal tax credits, depending on your home size and energy needs. A typical medium-sized home requires a 6.72 kW system costing $13,590 after incentives.

The federal tax credit saves you 30% on installation costs, while California’s property tax exemption prevents increased property taxes. With average monthly savings of $232, most Sacramento homeowners see payback in 4.6 years.

Yes, solar is financially worth it in Sacramento. With electricity rates at 31.9¢/kWh and rising, a typical solar system pays for itself in 4.6 years while providing over $101,000 in 25-year savings.

Federal tax credits reduce installation costs by 30%, and California’s property tax exemption prevents additional taxes on your home’s increased value from solar panels.

We believe Palmetto Solar is the best choice for Sacramento homeowners. As a national company with local expertise, we’ve completed 7,123 installations in California since 2020, demonstrating our proven track record in the state.

Our comprehensive approach includes some of the industry’s best financing options and a reliable installation network. We focus on making solar accessible and straightforward for Sacramento families, handling everything from initial consultation through system activation and ongoing support.