San Diego, CA Solar Panels
Solar Power in San Diego
San Diego’s abundant sunshine makes it an ideal location for solar installation. With California electricity prices jumping 56% from 2020 to 2024—driving monthly bills higher—many homeowners are exploring solar panels for their homes to offset rising electricity expenses.
This guide covers everything you need to know about solar installation in San Diego—from costs and permits to choosing the right system for your home.
CALIFORNIA by the Numbers
How Much Do Solar Panels Cost in San Diego, CA?
Our calculator uses real installation data from San Diego neighborhoods—from La Jolla to Chula Vista, Mission Valley to Oceanside—to show you what solar actually costs in your area. Get personalized estimates based on thousands of local installations.
System
Cost
Savings
You can still access the solar tax credit through Palmetto. Talk to us today to find out how.
Key Takeaways
- San Diego’s high electricity rates make solar financially compelling—SDG&E customers pay 45.5¢ per kWh, nearly triple the national average.
- A typical 6.72 kW system costs around $19,414 and can save San Diego homeowners approximately $100,000 over 25 years.
- San Diego’s abundant sunshine produces strong year-round solar performance, generating enough energy to power your home even during shorter winter days.
San Diego Electricity Prices
Understanding San Diego’s electricity costs is essential when evaluating your home energy options and long-term budget planning.
San Diego electricity rates have climbed significantly in recent years. California rates jumped from 22.8 cents per kWh in 2021 to 31.9 cents in 2024—a 40% increase that far outpaces the national average of 16.5 cents per kWh.
Solar panels allow homeowners to generate their own electricity, reducing reliance on utility power. By producing energy from sunlight, you can offset a significant portion of your monthly electricity consumption and shield yourself from future rate increases.
Over a typical 25-year system lifespan, solar can provide substantial savings as utility rates continue rising. Many San Diego homeowners find that solar helps stabilize their energy costs while contributing to California’s clean energy goals.
Price of Energy: California vs National Average
San Diego Area Utility Providers
San Diego Gas & Electric (SDG&E) serves most of San Diego County. According to 2023 data, SDG&E’s residential electricity rate averaged 45.5¢ per kilowatt-hour—significantly higher than both California and national averages.
SDG&E’s rates exceed the state average of 29.5¢ per kWh by 54% and nearly triple the national average of 16¢ per kWh. These elevated costs stem from California’s infrastructure investments, wildfire prevention programs, and the region’s reliance on natural gas generation.
With SDG&E rates among the nation’s highest, San Diego homeowners face substantial monthly electricity expenses. Solar installation allows residents to generate their own power, reducing dependence on utility rates that continue climbing year after year.
San Diego Utilities Electricity Rates
California Solar Incentives
San Diego homeowners have access to several solar incentives in California that help reduce installation costs and improve long-term savings.
California offers property tax exemptions, programs for disadvantaged communities, and equity funds designed to make solar more accessible. While net billing policies have changed under NEM 3.0, combining solar with battery storage can maximize your investment.
Review the available programs carefully, as eligibility requirements and incentive amounts vary. These programs can change over time, so acting promptly ensures you benefit from current offerings.
| 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 increase in your home’s assessed value resulting from a solar installation is excluded from property tax calculations. This means you get to enjoy the added home value from your solar system without the ongoing tax burden.
The financial benefit varies based on your home’s location and the size of your solar system, but it can be substantial. For example, if your solar installation adds $30,000 to your home’s value and your property tax rate is 1.25%, you would save approximately $375 per year in property taxes. These savings continue for as long as you own the home, making this a valuable long-term benefit. The exemption applies to both residential and commercial solar installations, including solar thermal systems and photovoltaic systems. California homeowners should note that this exemption is currently set to expire on January 1, 2027, unless extended by the state legislature, so it’s important to complete your solar installation before this deadline to ensure you receive this benefit.
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.
Eligible homeowners can receive up to $3 per watt in capacity-based incentives. For example, a typical 6-kilowatt solar system could qualify for up to $18,000 in upfront incentives. 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 assistance programs, and live in a designated disadvantaged community (DAC) area.
There are no specific deadlines mentioned for this program, though funding availability may vary. If you think you might qualify, you can visit the GRID Alternatives website to learn more about the application process and confirm your eligibility. This program can be combined with other incentives to further reduce the cost of going solar.
The Equity Fund is a California state program that provides battery storage rebates to help low-income residents afford clean energy systems. Established in 2022 through Assembly Bill 209, this $630 million initiative offers financial incentives under the Self-Generation Incentive Program (SGIP) specifically for qualifying homeowners who want to add battery storage to their solar systems.
Eligible homeowners can receive rebates ranging from $150 to $1,000 per kilowatt-hour of battery capacity installed, depending on their circumstances. The highest rebate rates ($850-$1,000 per kWh) are available to customers enrolled in California’s CARE or FERA utility discount programs, residents of Disadvantaged Communities, members of California Tribal communities, and those living in areas with high fire risk or frequent power outages. These same customers also receive enhanced net billing credits under California’s NEM 3.0 program and can save approximately 18-35% on their monthly electric bills through CARE/FERA enrollment.
To qualify for the Equity Fund, you must be enrolled in or eligible for the CARE/FERA programs, live in a designated Disadvantaged Community or California Tribal area, or reside in a high-risk fire zone or area with frequent brownouts or blackouts. Your electric service must come from Pacific Gas & Electric (PG&E), Southern California Edison (SCE), or San Diego Gas & Electric (SDG&E). This program works alongside other California solar incentives to make clean energy storage more accessible to communities that need it most.
Net Billing in California is a program that credits you for the excess solar energy your system sends back to the electric grid. Unlike older net metering programs that credited you at full retail rates, Net Billing (also called “NEM 3”) credits you based on the grid’s avoided cost at the specific hour you export energy. This means the value of your credits changes throughout the day, with higher values typically during peak demand hours when electricity is most needed.
The financial benefit varies significantly by utility and time of day. For the three major investor-owned utilities (PG&E, SCE, and SDGE), Net Billing began April 15, 2023, and export rates are calculated hourly using each utility’s Avoided Cost Calculator. Any unused credits remaining at your annual anniversary month are paid out at approximately 3-5 cents per kWh. SMUD credits exports at a fixed 7.4 cents per kWh with monthly settlement, while Imperial Irrigation District settles monthly at $0.0698 per kWh. LADWP continues to offer traditional 1:1 net metering as a municipal utility.
Net Billing applies to new solar interconnection applications submitted after April 14, 2023. If you submitted a complete application by April 14, 2023, you may qualify for the previous 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. Because Net Billing values exports lower than previous programs, pairing your solar system with battery storage can help you maximize savings by storing energy to use during expensive peak hours rather than exporting it at lower rates.
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 QuoteSan Diego 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.
San Diego’s coastal marine layer can create morning clouds, but abundant sunshine year-round makes it excellent for solar. Even cloudier cities produce strong results with properly designed systems.
Solar Production in San Diego 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 San Diego
We’ve mapped every solar installation across San Diego to help you explore which neighborhoods are leading the clean energy transition. Click any hexagon to see how many homes in that area have made the switch to solar.
Leasing Solar Panels
San Diego homeowners served by San Diego Gas & Electric (SDG&E) have access to Power Purchase Agreements (PPAs) through Palmetto. With a PPA, you pay only for the electricity your solar panels generate at a set rate per kilowatt-hour, rather than paying the full system cost upfront.
This approach eliminates the need for a large initial investment or loan payments. Palmetto handles all maintenance and system monitoring, so you can enjoy solar savings without the responsibilities of ownership. Your monthly costs vary with production—typically higher in summer when panels generate more energy, lower in winter—but annual savings remain consistent.
Learn more about Palmetto’s LightReach program to see how a PPA can make solar accessible for your San Diego home without upfront costs or maintenance concerns.
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 strong financial sense in San Diego. With SDG&E rates at 45.5¢ per kWh—nearly triple the national average—and over 260 sunny days annually, San Diego offers excellent conditions for solar savings.
A typical 6.72 kW system costs around $19,414 and can save approximately $100,000 over 25 years. The combination of high electricity costs, abundant sunshine, and California’s solar-friendly policies creates compelling economics for homeowners looking to reduce energy expenses.
San Diego homeowners served by San Diego Gas & Electric (SDG&E) now operate under California’s Net Billing program (NEM 3.0), which replaced traditional net metering on April 15, 2023. Instead of receiving full retail rate credits for excess solar energy, you receive hourly export credits based on the grid’s avoided cost at the time you send energy back.
Export credit values change every hour and are typically higher during peak demand periods. Any unused credits remaining at your annual anniversary month are paid out at approximately 3-5 cents per kWh. Pairing your solar system with battery storage helps maximize savings under this program by storing energy for use during expensive peak hours.
Yes, solar panels can increase your home value in San Diego. Research from Zillow shows that homes with solar panels sell for approximately 4.1% more than comparable homes without solar systems.
In San Diego’s housing market, this translates to substantial added value. Beyond the immediate price increase, solar panels also make your home more attractive to buyers who want lower energy costs and protection from rising utility rates.
The cost to go solar in San Diego depends on your home size and energy needs. A typical medium home (2,000-3,000 sq ft) requires a 6.72 kW system costing approximately $19,414, or $2.89 per watt. Smaller homes need around 5.01 kW ($15,088), while larger homes may require 8.80 kW ($24,677).
With San Diego’s high electricity rates averaging 31.9¢ per kWh, most homeowners see payback periods of 6-7 years and can save around $100,000 over 25 years. Your actual costs vary based on your roof characteristics, energy usage, and chosen equipment.
Yes, solar is financially worth it in San Diego. With SDG&E rates at 45.5¢ per kWh—nearly triple the national average—solar provides significant savings. A typical 6.72 kW system costs around $19,414 with a payback period of 6.4 years.
Over 25 years, homeowners can save approximately $100,000. San Diego’s abundant sunshine and high electricity costs create strong financial returns that protect you from future rate increases while reducing monthly energy expenses.
At Palmetto, we bring a national presence with local expertise to San Diego solar installations. We’ve completed over 7,123 installations across California since 2020, giving us deep experience with the region’s permitting, utilities, and installation requirements.
We offer flexible financing options and work with a trusted network of local installers who understand San Diego’s unique characteristics—from coastal marine layers to HOA requirements. Our approach combines competitive pricing with quality equipment and transparent service, helping you make an informed decision about your solar investment.