California Solar Panels
Solar in California
California leads the nation in residential solar installations, and for good reason. With electricity rates climbing 56% from 2020 to 2024, homeowners across the state are taking control of their energy costs.
Ready to explore solar panels for your home? This guide walks you through everything you need to know about solar installation in California.
California Solar Panel Cost
Our calculator uses real installation data from California homes—from San Diego to Sacramento—to show you accurate solar costs for your area. Get personalized estimates based on actual projects we’ve completed in your community.
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Key Takeaways
- California electricity rates jumped 40% from 2021 to 2024 and continue rising faster than most states nationwide.
- Solar panels generate electricity at a fixed cost protecting you from ongoing utility rate increases for decades.
- The typical California system saves over $105,000 in electricity costs over 25 years with a 6-year payback period.
Looking for More Detailed California City Guides?
Explore our comprehensive solar guides for major cities across California to find location-specific information on incentives, installers, and solar potential.
California Electricity Prices
California’s electricity rates continue climbing faster than almost anywhere in the country—and it’s easy to see why residents are exploring alternatives.
From 2021 to 2024, California’s average electricity cost jumped from 22.8 to 31.9 cents per kilowatt-hour—a 40% increase in just three years. That’s nearly double the national average of 16.5 cents per kWh.
Solar panels generate electricity at a fixed cost, protecting homeowners from these ongoing rate increases. Once your system is installed, sunlight remains free—creating predictable energy expenses while utility rates continue their upward trend.
Over 25 years, the typical solar system can save California homeowners tens of thousands of dollars. As electricity rates rise, those savings grow—making solar an increasingly valuable long-term investment in energy independence.
Price of Energy: California vs National Average
California Area Utility Providers
Understanding your local utility rates is essential when evaluating solar. California’s electricity costs vary significantly by provider, with 2023 rates ranging from 16.9¢ to 45.5¢ per kWh—well above the national average of 16.0¢.
Investor-owned utilities like SDG&E, PG&E, and SCE charge substantially more than municipal providers due to infrastructure maintenance costs, wildfire mitigation expenses, and regulatory requirements. Meanwhile, public utilities like SMUD and Anaheim keep rates closer to national averages.
Higher electricity rates directly impact your solar savings potential. When utility costs exceed the state average of 29.5¢ per kWh, generating your own clean energy becomes increasingly cost-effective, helping you stabilize monthly expenses for decades.
California Utilities Electricity Rates
California Solar Incentives
California offers several state and utility programs to help reduce the upfront cost of going solar. Explore available solar incentives in California below.
From property tax exemptions to specialized programs for disadvantaged communities, these incentives can significantly offset installation expenses. California also maintains net billing regulations that affect how homeowners are compensated for excess energy production.
These programs change frequently, so research current offerings carefully. Acting promptly ensures you don’t miss out on time-sensitive opportunities to maximize your savings.
| 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 value result in higher property tax bills. However, this state tax exemption ensures that any increase in your home’s assessed value directly tied to your solar installation is excluded from property tax calculations. This means you can enjoy the added value solar brings to your home without the burden of increased annual property taxes.
The financial benefit of this exemption can be significant over time. For example, if your solar system adds $20,000 to your home’s value and your property tax rate is 1%, you would save approximately $200 per year in property taxes—savings that continue for as long as you own the home. This exemption applies to both residential and commercial solar installations in California. The exemption is currently active and available to all California property owners who install qualifying solar energy systems, making it an important consideration when calculating the long-term financial benefits of going solar.
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 for DAC-SASH, you must meet several requirements: you need to 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 your property must be located in a designated disadvantaged community (DAC) area.
If you think you might qualify for this program, you can visit the GRID Alternatives website to learn more about eligibility requirements and how to apply. This incentive can significantly reduce the upfront cost of going solar, making it easier for qualifying homeowners to start saving on their electricity bills while contributing to a cleaner energy future.
The Equity Fund is a battery storage incentive program created in 2022 through Assembly Bill 209, providing $630 million in funding to help low-income California homeowners afford energy storage systems. This program operates under the Self-Generation Incentive Program (SGIP) and offers rebates based on your battery’s storage capacity, making it more affordable to add backup power to your home.
Eligible homeowners can receive rebates of $150, $850, or $1,000 per kilowatt-hour of battery capacity installed. The higher rebate amounts ($850 or $1,000 per kWh) are available if you’re enrolled in California’s CARE or FERA utility discount programs, live in a disadvantaged community, reside in a California tribal area, or live in an area with high fire risk or frequent power outages. For example, a 10 kWh battery system could qualify for up to $10,000 in rebates for eligible participants.
To qualify for this program, you must be enrolled in or eligible for California’s CARE/FERA programs, live in a designated disadvantaged community, or reside in a California tribal area. You must also receive electric service from one of California’s major utilities: Pacific Gas & Electric (PG&E), Southern California Edison (SCE), or San Diego Gas & Electric (SDG&E). Customers in CARE or FERA programs also receive additional benefits, including approximately 35% off their electric bill for CARE participants and approximately 18% off for FERA participants, plus enhanced net billing credits under California’s NEM 3.0 program.
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”) calculates the value of your exported solar energy based on what it’s worth to the grid at that specific hour of the day. This means the credit you receive changes throughout the day, with higher values typically during peak demand hours when electricity is most needed.
The financial benefit varies significantly depending on your utility company and when your solar energy is exported. For the three major investor-owned utilities (Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric), Net Billing began on April 15, 2023, and uses an Avoided Cost Calculator to determine hourly export credit rates. Sacramento Municipal Utility District offers a simpler structure with a fixed export rate of 7.4 cents per kWh, while Imperial Irrigation District credits excess energy at $0.0698 per kWh with monthly settlement. At the end of your annual billing cycle, any remaining credits are paid out at the avoided cost rate of approximately 3-5 cents per kWh for most utilities.
Net Billing applies to new solar interconnection applications submitted after April 15, 2023 for PG&E, SCE, and SDGE customers. If you’re considering solar, it’s important to understand that this program values solar energy differently than previous programs, which makes pairing solar with battery storage increasingly beneficial to maximize your savings by storing energy for use during higher-cost periods. Los Angeles Department of Water & Power customers continue to enjoy traditional 1:1 net metering, as municipal utilities were not required to adopt the 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 QuoteCalifornia Solar Irradiance
Solar panel production varies throughout the year based on daylight hours, weather patterns, and sun intensity. California’s abundant sunshine and long summer days create excellent solar conditions. Coastal fog and seasonal variations affect output, but properly designed systems consistently generate strong year-round production statewide.
What Can the Average California Solar System Power?
Summer Production (July)
In July, your 10 kW system could power:
- 3.6 average California 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 California 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 California
We’ve mapped every solar installation across California to help you explore the clean energy revolution in your community. This interactive map reveals thousands of neighborhoods where homeowners have already made the switch to solar—discover who’s leading the way near you.
Leasing Solar Panels
Palmetto offers flexible financing options across California through our LightReach program. Depending on your utility provider, you can access either a solar lease or Power Purchase Agreement (PPA) to go solar with no upfront costs.
With a solar lease, you pay a fixed monthly amount—providing predictable energy expenses without worrying about production fluctuations. With a PPA, you only pay for the actual energy your system produces at a set rate per kilowatt-hour. Both options eliminate the burden of system maintenance, as Palmetto handles all repairs and servicing at no cost to you.
Our LightReach energy plan includes everything: premium solar panels, professional installation, ongoing maintenance, and our 90% Production Guarantee. If your system underperforms, we credit you the difference—ensuring you get the savings you expect without the financial risk of 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!
Learn MoreFrequently Asked Questions
Yes, solar makes strong financial sense in California. With electricity rates jumping 40% from 2021 to 2024 and now averaging 31.9¢ per kWh—nearly double the national average—homeowners face mounting energy costs.
Solar panels generate electricity at a fixed cost, protecting you from ongoing rate increases. The typical California system saves over $105,000 over 25 years with a 6-year payback period, making it a valuable long-term investment in energy independence.
California no longer offers traditional net metering for new solar customers. Since April 15, 2023, the three major utilities (PG&E, SCE, and SDG&E) switched to Net Billing, also called NEM 3.0, which credits excess solar energy at lower hourly rates based on grid demand.
Municipal utilities like LADWP and SMUD maintain different programs. LADWP still offers 1:1 net metering with indefinite credit rollovers, while SMUD provides a fixed export rate of 7.4¢ per kWh with monthly settlement.
Yes, solar panels increase home value in California. A Zillow study found that homes with solar panels sell for 4.1% more than comparable homes without solar systems.
California’s property tax exemption for solar installations means you gain this added value without paying higher property taxes. With rising electricity costs and strong buyer demand for energy-efficient homes, solar panels represent a valuable investment that pays dividends both monthly and at resale.
The typical California solar system costs around $19,414 for a 6.72 kW installation, or approximately $2.89 per watt. This system is designed to offset 100% of average household electricity usage.
With California’s electricity rates averaging 31.9¢ per kWh—nearly double the national average—most homeowners see a payback period of about 6 years and save over $105,000 over 25 years.
Yes, solar is financially worth it in California. With electricity rates at 31.9¢ per kWh—nearly double the national average—solar panels generate power at a fixed cost, protecting you from ongoing rate increases.
The typical California system costs around $19,414 and saves over $105,000 over 25 years with a 6-year payback period. After that, you’re generating free electricity while utility rates continue climbing.
At Palmetto, we’ve completed over 7,123 solar installations across California since 2020. We combine national expertise with local knowledge to serve homeowners throughout the state.
We offer flexible financing options and work with trusted local installation partners to ensure quality service. Our focus is on making solar accessible and straightforward for California residents.