Sacramento, CA Solar Panels
Solar Power in Sacramento
California ranks 1st in the nation for residential solar installations — and it’s easy to see why. With electricity rates at 31.86 cents per kWh, compared to the national average of 16.6 cents per kWh, Sacramento homeowners are increasingly turning to solar to reduce their energy bills.
Whether you’re just starting to explore your options or ready to move forward, this guide covers everything you need to know about solar panels for your home in Sacramento.
CALIFORNIA by the Numbers
How Much Do Solar Panels Cost in Sacramento, CA?
Using real installation data from Sacramento and surrounding areas — Elk Grove, Roseville, Folsom, and Rancho Cordova — this calculator gives you an honest, localized estimate of what solar installation actually costs for a home like yours.
System
- No upfront investment
- Palmetto handles all maintenance
- 90% Production Guarantee
- Comprehensive protection program included
Key Takeaways
- Sacramento gets 265+ sunny days a year, making it one of California’s best cities for solar — with average homeowner savings of around $102,000 over 25 years.
- California’s electricity rates are nearly double the national average at 31.9¢/kWh — solar helps Sacramento homeowners generate their own power and reduce exposure to rising utility costs.
- Sacramento homeowners can go solar with no upfront cost through Palmetto’s LightReach lease, with monthly payments starting as low as $89/month for an average-sized home.
Sacramento Electricity Prices
Sacramento homeowners pay some of the highest electricity rates in the country — and the numbers have been climbing fast.
California’s residential electricity rate reached 31.9 cents per kWh in 2024 — nearly double the national average of 16.5 cents per kWh. That gap has widened every year since 2021, when California’s rate was 22.8 cents per kWh.
Solar can help offset those rising costs. By generating your own electricity at home, you rely less on the grid — and less on rates that have increased nearly 40% in California over the past four years.
Over the life of a solar system — typically 25 years or more — that protection from rate increases can add up to significant savings. The higher utility rates climb, the more value a solar system provides for your home.
Price of Energy: California vs National Average
Sacramento Area Utility Providers
Sacramento is served by two main electric utilities: SMUD and Pioneer Community Energy. Based on 2023 data (the most recent available), SMUD charges 16.9¢/kWh and Pioneer Community Energy charges 12.8¢/kWh — both at or below the 2023 national average of 16.0¢/kWh.
While local rates are competitive nationally, California’s 2023 state average was 29.50¢/kWh — nearly double what Sacramento residents pay. SMUD’s nonprofit structure and Pioneer’s community-choice model help keep local costs significantly lower than most Californians experience.
Even at today’s lower local rates, electricity prices tend to rise over time. Solar can help Sacramento homeowners lock in more predictable energy costs, reducing exposure to future rate increases from any utility provider.
Sacramento Utilities Electricity Rates
California Solar Incentives
Sacramento homeowners have access to a range of solar incentives in California that can help reduce the upfront cost of going solar.
State programs like SGIP and DAC-SASH offer rebates for income-qualified California households — in some cases covering up to 100% of system costs. Eligibility depends on income level, location, and system type.
The federal residential solar tax credit is no longer available. Homeowners who lease solar through a provider like Palmetto’s LightReach may still benefit indirectly, as commercial tax savings are passed through as lower monthly payments.
| Incentive | Type | Description | Source |
|---|---|---|---|
| SGIP – Residential Solar & Storage Equity (RSSE) – AB 209 | Rebate | A state-funded rebate of $3,100/kW for solar and $1,100/kWh for battery storage available to income-qualified California households, potentially covering 100% of system costs. | Learn More |
| DAC-SASH – Disadvantaged Communities Single-Family Solar Homes Program | Rebate | An upfront solar installation rebate of up to $3/watt for income-qualified homeowners in California disadvantaged communities, administered by GRID Alternatives through 2030. | |
| Federal Commercial Solar Investment Tax Credit (ITC-48E) – Third-Party Owned Systems | Tax Credit | Businesses and third-party solar owners (lease/PPA providers) can claim a 30%+ federal Investment Tax Credit for solar projects that begin construction before July 4, 2026, with savings often passed to homeowners through prepaid leases at a ~30% discount. | Learn More |
The Self-Generation Incentive Program (SGIP) Residential Solar and Storage Equity (RSSE) budget is the only active SGIP pathway in 2026. Funded by $280 million in state dollars under AB 209, it offers $3,100 per kW for paired solar and $1,100 per kWh for battery storage — generous enough to cover 100% of system costs for many households. For example, a typical 7 kW solar system paired with a 10 kWh battery could receive up to $21,700 for solar and $11,000 for the battery, totaling $32,700 in incentives.
To qualify, your household income must be at or below 80% of the Area Median Income (AMI), or you must be enrolled in the CARE, FERA, or ESA utility assistance programs. You must also be a residential customer of PG&E, SCE, SDG&E, SoCalGas, or LADWP. Systems must be sized to the home’s actual electricity usage — batteries larger than 15 kWh for single-family homes require justification based on energy consumption.
As of early 2026, the $280 million budget is fully reserved, but new applications are accepted on a waitlist and funded as existing reservations cancel. The best way to apply is through an SGIP-approved installer. All applicants must enroll in a qualified Demand Response program within one year of reserving funds. Check current funding availability at selfgenca.com.
The Disadvantaged Communities – Single-Family Affordable Solar Homes (DAC-SASH) program provides an upfront rebate of up to $3 per watt for solar installations, which can cover $12,000–$15,000 of the cost of a typical 4–5 kW system. The program is funded at $8.5 million annually and remains active through 2030, making it one of the most valuable solar incentives available to qualifying Californians in 2026.
To be eligible, you must: (1) receive electrical service from PG&E, SCE, or SDG&E (2) own and occupy a single-family home as your primary residence; (3) live in a Disadvantaged Community (DAC) as identified by the CalEnviroScreen 4.0 map; and (4) have a total household income within CARE or FERA program limits. You can verify your address using the CalEnviroScreen tool at oehha.ca.gov/calenviroscreen.
The program is administered by GRID Alternatives, a nonprofit solar installer. The rebate covers equipment and installation costs, though out-of-pocket expenses may apply for roof repairs, panel upgrades, or permitting fees. To get started, complete the online eligibility form at gridalternatives.org or call GRID Alternatives toll-free at (866) 921-4696 for a pre-screening conversation.
While the federal residential solar tax credit (25D) has expired for homeowner-purchased systems, the commercial Investment Tax Credit (ITC-48E) remains available for third-party owned solar systems — including those installed under leases and Power Purchase Agreements (PPAs). Solar companies that own and install systems on residential rooftops can claim a base credit of 30% of system costs, with bonus adders of up to 10% each for projects in low-income communities, energy communities, or on Indian land — potentially reaching 40% or more.
For homeowners in Sacramento, the most practical benefit comes through prepaid solar leases: because the third-party owner claims the commercial ITC, they can pass the equivalent ~30% savings directly to you as a reduced purchase price at the point of sale. This effectively replicates the financial benefit of the expired residential ITC without requiring you to have any personal tax liability. PPAs offer a similar benefit — you pay nothing upfront and lock in a per-kWh rate below your utility’s current price.
To qualify for the commercial ITC, projects must begin construction before July 4, 2026. Projects that miss this deadline must be placed in service by December 31, 2027 to remain eligible. If you are considering a solar lease or PPA, act promptly to ensure your provider can begin construction in time to capture the credit and pass the savings to you. LightReach is currently the only California PPA provider offering battery storage under the same agreement — an important consideration for PG&E customers in Sacramento under NEM 3.0.
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 265+ sunny days and mild climate make it one of the best cities for solar. Minimal cloud cover and low humidity mean consistent, reliable energy production year-round.
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 solar installations across Sacramento so you can see just how many of your neighbors have already made the switch. Explore the heatmap below to discover which communities and neighborhoods are leading the way in clean energy adoption!
Leasing Solar Panels
Not every homeowner wants to pay for solar panels upfront — and that’s completely understandable. Palmetto offers an alternative through LightReach, a Power Purchase Agreement (PPA) available to Sacramento homeowners served by Pacific Gas & Electric (PGE). With a PPA, you don’t own the system — Palmetto does. Instead, you simply pay for the electricity your panels produce at a set rate per kilowatt-hour (kWh), typically lower than what PGE charges.
Because solar panels produce more energy in Sacramento’s long summer days and less in winter, your PPA bill will naturally vary by season. That said, the annual average tends to be consistent and predictable. And since Palmetto owns the system, all maintenance, monitoring, and repairs are handled for you — no out-of-pocket surprises. Learn more about how solar leasing compares to buying.
Compared to a cash purchase, a PPA requires no upfront investment and no payback period to wait through. You start saving from day one. It’s a straightforward way to go solar in Sacramento without taking on the responsibilities of system ownership.
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!
Explore LightReach LeasingFrequently Asked Questions
Yes, solar makes strong sense for Sacramento homeowners. With 265+ sunny days per year, 5.8 peak sun hours daily, and local electricity rates up to 31.9¢/kWh, the conditions are ideal for generating meaningful savings — with average projected savings of around $102,000 over 25 years.
If upfront cost is a concern, Palmetto’s LightReach lease removes that barrier entirely — homeowners can go solar with no money down and start saving from day one, with monthly payments starting as low as $89/month for an average-sized home.
Sacramento is primarily served by SMUD (Sacramento Municipal Utility District), which uses a Net Billing (Export Credit) program — not traditional net metering. All solar energy exported to the grid is credited at 7.4 cents per kWh (the Export Compensation Rate), and credits are settled monthly. This rate can change every 4 years by up to ±30% of the previous rate.
This differs from the NEM 3.0 program used by PG&E, SCE, and SDG&E, where export credits vary hourly based on grid conditions. SMUD’s fixed export rate makes it easier for Sacramento homeowners to predict the value of their excess solar production.
Yes, solar panels can increase your home value in Sacramento. According to a Zillow study, homes with solar panels sell for about 4.1% more than comparable homes without them. For a median-priced Sacramento home, that can translate to a meaningful bump in resale value.
This benefit applies to owned systems — not leased panels. If you purchase your system outright, the added equity becomes part of your home’s appraised value, making solar a long-term financial asset beyond just monthly utility savings.
With Palmetto’s LightReach lease, Sacramento homeowners can go solar for as low as $89/month with no upfront cost — Palmetto owns and maintains the system. It’s the most accessible way to go solar today.
For a cash purchase, a typical 6.72 kW system costs around $19,414 (about $2.89/watt). Note that the federal 30% residential tax credit is no longer available following the Big Beautiful Bill. Use the calculator above for a personalized estimate based on your home size.
For many Sacramento homeowners, solar is worth it financially — especially with rising electricity rates. With a LightReach lease, there’s no upfront investment required. Your monthly lease payment is typically less than your current electricity bill, so you start saving from day one.
For those who purchase outright, a typical system pays for itself in about 6–7 years, with projected savings of around $102,000 over 25 years. Either way, solar helps protect against Sacramento’s steadily rising utility costs.
We believe Palmetto Solar is the best choice for Sacramento homeowners. As a national company with a local focus, we’ve completed 7,123 installations across California since 2020, backed by a trusted install network and some of the best financing options in the industry.
Whether you prefer a cash purchase or our LightReach lease with no upfront cost, we make going solar straightforward and transparent — so Sacramento residents can start saving with confidence.
With Palmetto’s LightReach lease, Sacramento homeowners can go solar with no upfront cost. One simple monthly payment covers everything — the system, installation, monitoring, maintenance, and a 90% Production Guarantee. For a typical 6.72 kW system, the estimated monthly payment is approximately $89/month.
Because Palmetto owns the system, it claims the commercial Investment Tax Credit (ITC) and passes those savings to you through lower monthly payments — a key advantage today. Most Sacramento homeowners find the lease payment is less than their current electricity bill, so savings start from day one.