How Much Do Solar Panels Cost in California?

This is for informational purposes - always check with your permitted authority or regulatory body first.

A leader in solar panel adoption, California has 1.5 million solar power systems installed across the state. The high cost of electricity, environmentally conscious citizens, and the amount of sunshine drive adoption. We’ll examine how much solar panels cost and whether it is a potentially smart solution if you live in California.

Average Solar Panel Costs in California

Many factors affect the cost of installing a solar panel system on your home in California, and we’ll get into those factors later in the article. For simple averages of solar panel costs in California, this is how it breaks down:

• Cost of Installing Solar Panels: $10,112-$12,359, including the federal tax credit
• Average Cost per Watt: $2.41-$2.94, based on a 6000-watt solar panel system
• Return on Investment (ROI): 5 to 8 years to break even on the investment

If you expect to live in your home for more than five to eight years, installing solar panels may be the best energy solution for you because of the significant cost savings after your break-even point.

Cost for Solar Panel Installation in California by System Size

One of the biggest factors affecting the cost of your solar panel installation is the amount of power your home will need to cover your electricity consumption. Factors that influence how much electricity you consume include:

• Size of your home: The larger the home, the more power you will need to operate the home.
• Age of your home: Older homes aren’t as energy efficient as new homes.
• Size of your family: The more people you have in the home, the more electricity you’ll consume.

Homes that require more wattage may get a bulk rate discount per watt because they must purchase a bigger system. But overall, these higher-wattage homes will pay more per cost of the total system.

The average cost for installation based on the solar panel system size:

• 4kW System: $2.91/per watt Total Cost: $8,137
• 5kW System: $2.81/per watt Total Cost: $9,828
• 6kW System: $2.68/per watt Total Cost: $11,235
• 7kW System: $2.66/per watt Total Cost: $13,019

A typical home needs about 6kW, so you can see that the best price break is for 6kW installation. After 6kW, the savings per watt are negligible.

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How to Calculate What Size Solar Panel System Your Home Will Need

To calculate the size of your solar panel system will depend upon your home’s location and typical electricity bill. To accurately estimate the size of your system, you’ll want to contact a solar panel installation company to get an accurate bid. We recommend getting bids from several companies before signing up for a system to ensure the best quality for the best price.

The solar panel company will need to assess how much power your home needs and where to place the solar panels to maximize sun exposure. If the location of your home doesn’t get optimal sun exposure, you may need more panels to compensate for poor sun exposure.

Other Factors that Affect the Cost of Solar Panels

Other factors can influence the cost of your solar panels:

• Permits and inspection costs: Depending on your county, you may need permits and other inspections to approve and validate the installation of your solar panels. This may include a site plan for your solar panel installation.
• Panel type: There are two types of solar panels: polycrystalline and monocrystalline. Monocrystalline is more expensive because it is more efficient. 
• Local solar tax incentives: Depending on where you live, you may qualify for additional solar tax incentives and or rebates in addition to the federal solar tax credit.

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How Much Does the Federal Solar Investment Tax Credit Reduce My Solar Panel Installation Costs

The Federal solar investment tax credit allows homeowners to claim 30% of the value of the solar panel system on their taxes. To claim the credit, homeowners must complete the installation during the tax year. The tax credit allows for a dollar-for-dollar reduction in income tax owed. Unless renewed by Congress, this tax credit will expire in 2035.

To be eligible for the tax credit, you must install your solar panel system between January 1, 2017, and December 31, 2034. The solar panels must be on a place of residence within the United States. The federal solar investment tax credit can only be claimed on the original installation.

How Does Solar Power Compare to Electricity Rates in California?

While it will take you five to eight years to recoup the installation cost, the electricity savings are substantial. The average cost of electricity from utility power is $0.44/kWh. The average cost of electricity from solar power is $0.06/kWh. This is a difference of $0.38/kWh on average.

Lifespan of a Solar Panel System

Solar panels average a lifespan of 25 to 30 years. Most reputable solar panel manufacturers will warranty the solar panels for 25 years. You’ll want to learn from the solar panel company how much the panels are expected to degrade over time because that will affect your long-term savings.

Solar Panels are an Excellent Power Solution in California

Despite the initial costs, installing solar panels is worth the investment if you plan to stay in your home longer than five years. To optimize your savings and return on investment, you’ll want to leverage the federal solar investment tax credit and enjoy the next thirty years of significant electricity cost savings.

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