Breaking Down Solar Panel Cost: California-Specific Factors and Considerations
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Eco-friendly solar power may cost less than homeowners think. Solar panel cost in California averages about $14,873, but it can range from $12,622 to $17,130.
Highlights
- The typical solar panel cost in California averages $14,873, but homeowners may spend between $12,622 and $17,130.
- Homeowners planning their solar panel budget will need to consider the size and type of system, the brand, labor costs, permits, roof pitch, purchase method, and other factors.
- Some of the primary benefits of installing solar panels in California are a decrease in energy costs with increased energy independence, reduced carbon footprint, and increased home value.
- While DIY installation isn’t prohibited by law, most homeowners prefer to leave the tricky job of installing electrical wiring and panels on a steep roof to trained installers who also know how to obtain the right permits.
Solar electricity is one of the best options for eco-friendly energy since roof solar panels absorb the energy from the sun and convert it into usable electricity for the home. This upgrade doesn’t just positively impact the environment; it can also lower the cost of utility bills for the household. In areas with plenty of sunny days, those solar energy savings make a home solar system a great investment for the environment and the homeowner’s wallet.
“The economic feasibility differs by state due to various factors like local incentives, local energy rates, net metering rules, and weather,” says Will White, a solar application specialist with more than 15 years of experience in the solar industry, currently with Fluke Corporation, a global manufacturer of test and measurement instruments. “California has been a frontrunner in its incentives for homeowners who install solar.”
Solar panel installation costs in California run between $12,622 to $17,130, though the average is about $14,873. The cost of this project can vary depending on several factors. This can include the way in which the system is purchased, the system size, or even the labor involved with the project. Homeowners are encouraged to find out more about the solar panel cost in California and how these factors can affect the overall budget.
Factors in Calculating Solar Panel Cost in California
There are a range of cost considerations involved in a solar panel installation project, including the system size, purchase method, panel type, roof condition, labor costs, permit fees, and more.
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System Size
When calculating the cost of electric solar panels in California, it’s necessary for homeowners to consider what size system the home requires to keep up with electrical demands. “Homeowners’ energy needs can range greatly—from simply wanting to mitigate their carbon footprint and slightly lower their monthly energy bills to wanting to power their whole home with clean energy generated on-site from their solar panels,” explains White. “Your energy needs are a determining factor in the size and design of your solar project.”
The more solar panels required, the higher the overall solar power cost. Most homes in California use about 7,000 kilowatt hours (kWh) per year and require a 5 kilowatt (kW) system, which costs an average of $14,850 to $14,896 to purchase and have professionally installed. However, this is a rough estimate, so homeowners are advised to speak with a professional solar installer in their local area for a more accurate estimate.
| System Size | Average Cost (Materials and Labor) |
| 3 kW | $8,910 to $8,938 |
| 4 kW | $11,880 to $11,917 |
| 5 kW | $14,850 to $14,896 |
| 6 kW | $17,820 to $17,875 |
| 7 kW | $20,790 to $20,855 |
| 8 kW | $23,760 to $23,834 |
| 9 kW | $26,730 to $26,813 |
| 10 kW | $29,700 to $29,792 |
Purchase Method
There are several ways a homeowner can pay for a solar panel system. The cost of the installation can vary depending on the purchase method, so it’s a good idea for homeowners to look into the various options before deciding to invest in the best solar panels for home use.
An outright purchase allows the homeowner to pay for the solar system equipment and installation immediately, instead of having lingering payments with interest accrual for several years. However, this may not be a financial option for some individuals. In that case, homeowners can look into home equity loans or cash-out refinancing, both of which borrow against the value of the home.
Alternatively, homeowners may choose to pay a recurring fee to essentially rent the system with a lease agreement or a power purchase agreement (PPA). However, most homeowners who want a residential solar panel system will work with their bank to get the right type of home improvement loan that can be paid off over several years.
Panel Type, Brand, and Quality
The efficiency of the solar panel system depends on the type, brand, and quality of the solar panel equipment. Typically, premium brands will be more expensive than lesser-known brands, despite having similar products, so it’s worth homeowners’ time to research brands to determine if the solar panel equipment is good quality and the right type for their roof. For instance, solar shingles cost between $35,000 and $75,000, though their thinner profile is appealing to many homeowners.
It’s worth noting, however, that even products from the best solar companies in California (such as SunPower and ADT Solar) may vary in price and quality, so it’s necessary for homeowners to compare individual products before investing in a solar system for the home. In addition to brand, the type of materials that make up the solar panel can influence the cost. Speaking with a company representative in their area can help homeowners understand the benefits and drawbacks of each type: monocrystalline, polycrystalline, and thin-film.
- Monocrystalline solar panels cost about $1 to $1.50 per watt, not including labor or installation expenses. This type of solar panel is the most energy efficient, making it a popular choice for homeowners with room in the budget for these premium products.
- Polycrystalline solar panels are the most common option due to the moderate efficiency and relatively affordable price. Homeowners who want a solar system—but don’t want to pay the price for premium monocrystalline solar panels—can invest in polycrystalline solar panels for a reduced rate of $0.70 to $1.00 per watt.
- Thin-film solar panels are the least common type of solar panel for residential homes due to their relatively high cost and low efficiency. Generally, thin-film solar panels are reserved for commercial locations, but if this type of solar panel seems appealing, then homeowners will spend about $1 to $1.50 per watt.
Roof Type, Angle, and Condition
Given that solar panels are installed on top of the roof, it’s necessary to consider the roof type, angle, and the condition of the roof before starting a solar panel installation project in California. According to the Department of Energy, the ideal position for solar panels is at a 15 to 45 degree pitch on a south-facing roof. However, solar panels can still work effectively, even if a roof is not south-facing.
When the installers assess the home, they will need to determine if the roof is safe to work on. Steep roofs can present a challenge for installers, leading to slower installation times and higher labor costs. Additionally, if the roof is weak in some areas, then it may need to be repaired before solar panels can be installed, adding to the overall project cost. Homeowners can reach out to one of the best roofing companies, such as Aspen Contracting and CMR Construction & Roofing, to inquire about the cost to repair a roof.
Labor and Permits
When hiring an individual, a crew, or a solar installation company, the homeowner will need to account for the cost of labor. Generally, the company will be able to provide a basic estimate of the equipment costs, permit fees, and labor costs fairly early in the discovery process. This estimate can also be used to compare several companies if the homeowner is still unsure about which company to hire. On average, California homeowners can expect to pay about $3,600 to $7,200 in labor fees for a 6 kW system.
Building permits are often required for solar panel installation projects. Homeowners will need to contact the local permit office or work with the solar panel installation company to obtain a work permit before proceeding with the solar system installation. In California, the cost of a solar permit is limited to $450 for residential solar panel installation projects that are equal to or less than 15 kW in size.
Installation Company
The best solar companies can be found in California and other states, which can help homeowners evaluate the cost and value of each company. It’s a good idea for homeowners to start with a broad pool of local solar panel installation companies. This provides a better understanding of the general installation process and products offered, as well as a brief look at previously completed solar system projects.
Based on this information, the homeowner can reduce the number of potential companies to those that are a good match and value. Once they have pared down the list of installation companies, they can ask for quotes from each company to directly compare pricing options.
“Many companies offer a wide range of services, including financing, maintenance options, and battery installation,” says White. “Batteries can level up a solar system, allowing homeowners to store the energy generated on their rooftops for use at night when the sun isn’t shining or in the case of a grid outage. Designing and installing a solar system with batteries requires a unique skill set different from installing one with only solar.”
Solar Incentives and Tax Credits
Solar energy is an excellent alternative to gas, oil, and other energy sources that may cause harm to the environment. By equipping the home with solar panels, the homeowner can passively generate electricity without negatively impacting the environment. At the same time, they can sell energy back to the local utility through a net metering program, reducing the cost of utility bills.
In order to support solar panel installation projects, federal, state, and local governments offer a wide variety of incentive programs and tax credit opportunities. California has many such programs that homeowners can review to find one that fits their circumstances.
- Rancho Mirage Energy Authority Rebate Program gives eligible homeowners a $500 rebate after the purchase of a solar system.
- Sacramento Municipal Utility District Rebate Program offers a rebate of up to $300 for eligible customers.
- Net metering programs allow any solar homeowner to receive credits on their utility bills for their extra solar power production. “Recently, California instated new net-metering rules called NEM 3.0, which significantly reduces the financial benefit of exporting excess solar energy back to the utility grid,” explains White. “However, installing a system with batteries can reduce the negative financial impact of this legislation. Net metering can be complex and can affect the economic feasibility of your solar investment, so be sure to ask your local solar installer for more information specific to where you live.”
- DAC-SASH Rebate Program offers rebates to income-eligible single-family homeowners through Pacific Gas and Electric (PG&E), Southern California Edison (SCE), or San Diego Gas and Electric.
- Federal Solar Tax Credit will credit up to 30 percent of the solar system cost toward federal taxes. This is sometimes referred to as the Residential Clean Energy Credit.
Additional Costs and Considerations
After working through the main cost factors, the homeowner will need to consider a few additional costs that could come up during the installation, which could include warranties, local permits, and regulations, as well as the cost and scheduling of an energy audit. Homeowners can work with the installation company and the local utility to address these potential solar panel cost factors.
Are you a California homeowner interested in solar panels?
A pro can help you make the right choices. Get free, no-commitment project estimates from solar panel installation services near you.
Energy Audit
Solar panel systems can be stand-alone systems that send the generated energy to the home and store any excess energy in a connected battery. This type of system is ideal for homes in remote areas that may not have an existing connection to the local electric utility. Batteries can also be used as a backup energy source for the home if the power in the neighborhood goes out.
In most cases, the home and the solar panel system will be connected to the local utility. When this connection is made, the electric utility will need to conduct an energy audit to ensure that the system is safe. While the solar panel installation company will usually book the audit, the homeowner is still responsible for the additional cost of this service, which can vary depending on the electric utility. For example, PG&E customers pay a fee of $145, while SCE customers only pay about $94 to connect the system to the local utility.
Warranties
Warranties are important for property owners to consider when purchasing a residential solar panel system since unpredictable weather can damage the solar panel system through airborne debris, hail, or ice. Depending on the warranty, the cost of replacement or repairs to a solar panel system may be fully or partially covered if a severe storm has damaged the panels.
Warranties may be offered by the solar panel equipment manufacturers but can also be available through the solar panel system installation company. Similarly, some installation companies may offer a guarantee on their work. Discussing the possibility of a product warranty and a work guarantee with the solar panel installation company can help homeowners determine which products and brands are best for their home.
Local Regulations
The exact size, type, and placement of solar panels is typically regulated by the California Energy Commission, but other local regulations may exist, so it’s recommended that the property owner speak with the permitting office, the solar panel equipment installation company, and the neighborhood HOA. The permitting office can help the homeowner understand the basic requirements to receive a permit, while the solar panel installation company can provide advice about the number and position of solar panels for the home.
Homeowners associations (HOAs) can often regulate changes to the exterior of a home; however, this isn’t a concern as it pertains to solar panel system installation. Solar panels receive special exemption in the California property code, as it states that HOAs cannot forbid or restrict a property owner from installing solar panels.
Benefits of Choosing Solar Panels in California
Homeowners who are unsure whether solar panels are a good idea for their home can look into the possible benefits of solar panels. Some advantages of solar energy include decreased energy costs, a reduced carbon footprint, increased property value, and energy independence. California homeowners will want to consider these benefits when deciding if solar energy is right for their household.
Decreased Energy Costs
“Installing solar panels can help homeowners save money on their monthly utility bills,” explains White. The electricity collected by a solar panel system can be stored in batteries for reserve use if the system is not connected to the grid or when no power is being produced at night. It should be noted that an off-grid system will require a substantial battery to store the electricity necessary to operate a full household.
However, if the homeowner connects the solar panel system to the local utility, then the energy can then be sold back to the utility through a net metering program. With this method, the homeowner can reduce the energy costs for the entire household and may be able to recoup some of the up-front costs of the solar panel installation project.
Increased Energy Independence
When a homeowner invests in a solar panel system, it’s common for the solar system to connect to the local electric grid instead of simply storing the energy in private batteries. The reason for this is that the number of batteries, as well as the size of the batteries required to store the energy for an entire household can be cost prohibitive. Due to the high cost of these additions, many people opt to connect the solar panel system to the local utility for backup purposes and use at night.
The solar panel system will connect and provide energy to the local electrical grid during sunny days, and the home will draw energy from the local utility for energy when the solar system is not able to produce enough energy for the household, such as during stormy periods or at night. This means that when the sun is out, the electrical systems throughout the home can receive power directly from the solar panel system, reducing the homeowner’s reliance on the local electric grid and decreasing the annual energy costs.
“Off-grid solar systems are significantly more complicated than grid-connected systems, so installation and maintenance costs are usually higher,” warns White. “The main difference between the two is that an off-grid solar system includes large batteries to store excess solar energy for later use; an on-grid solar system allows homeowners to send excess solar energy generated on their rooftops back to the grid system, and they get rewarded financially for doing so through a process called net-metering.”
Reduced Carbon Footprint
One of the primary advantages for homeowners who invest in solar panels in California is the reduced carbon footprint of the household. “Aside from the financial opportunities, installing solar panels allows homeowners to mitigate their carbon footprint and live more sustainably,” says White. Solar energy is a readily available, renewable resource with limited impact on the environment during use. Many property owners are moving toward more sustainable and eco-friendly resources, so making the switch to solar energy is a good choice to reduce greenhouse gas emissions.
While solar systems deliver clean energy to the home, this does not mean that there is no waste generated by a solar panel system. When it’s time to replace an existing solar panel system or just the solar panels, homeowners have few recycling options, as solar panels are difficult to reuse for more than a few parts.