Over 227,000 homeowners in California have used EnergySage to receive & compare solar panel installation quotes!
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Solar installation costs do not include the 30% federal investment tax credit or local incentives. Savings estimates do not account for utility net billing rates.
Thanks to plentiful sunshine and great solar incentives, Golden State homeowners are saving thousands by going solar.
California is consistently one of the best states in the country for generating solar energy. Considering the state's large population and high energy demand, it comes as no surprise that California has far and away the most installed solar capacity out of all 50 states. Thanks to pro-solar policies, plenty of sunlight hours throughout the year, and favorable solar incentives, the Golden State is an ideal area for property owners who are considering installing solar panels.
The average cost of a solar panel installation in California ranges from $12,622 to $17,078. On a cost per watt ($/W) basis, a solar panel installation in California ranges in price from $2.52 to $3.42. See how California compares to solar panel costs across the U.S.
A critical question many property owners have when they are considering installing solar panels is the amount of time it will take to recover their initial investment through electricity savings. This question is defined as the solar payback period. For California, the average solar payback period is 5.92 years.
Another choice that solar shoppers have to face is how to pay for a solar panel system. Fortunately, there are many financing options available for property owners looking to invest in solar energy. Cash purchases are one common method to pay for solar and often lead to the most long-term value for your money. For those who prefer $0-down options, solar loans and solar lease/PPAs are available to help finance a solar energy system.
There are plenty of options to consider when choosing the solar panels, inverters, racking systems, and batteries to install for your solar panel system. With the number of options available today, it’s important for you to understand various factors that distinguish one component apart from another. For example, the best solar panels available may have premium efficiencies and warranties, but will typically be more costly. However, depending on the size of the installation, you’ll need to determine whether high-efficiency solar panels that can produce more electricity are worthwhile. Also, your appetite for risk can help determine which solar warranties best fit your needs. These are just a few of the many factors to consider when selecting solar panel equipment. To find more info, check out EnergySage’s Solar Decision Guide.
Aside from the power output and efficiency of the solar equipment you choose to install, the amount of energy you generate with solar panels in California is directly related to the amount of sunlight that hits your panels. California is one of the sunniest states in the U.S.; therefore, a solar panel installation in the state will likely produce more energy annually than a system of the same size installed elsewhere, such as in the Northeast.
There are additional factors that determine how much solar electricity you can produce: shading and panel angle are important in calculating your production estimate, a prediction of how much energy your solar installation will produce over time. You can see an estimate of how much you can save with solar using the EnergySage Solar Calculator – the calculator will take into account site-specific conditions like shade and geography.
Solar incentives in California can help you reduce the overall price of going solar. Learn more about why solar panels are such a great investment in California.
Learn about solar incentives in CAThe federal investment tax credit, now referred to as the Residential Clean Energy Credit for residential systems, has been one of the most reliable and impactful incentives for solar across the U.S. This solar incentive allows you to deduct 30 percent of the total system cost from your federal taxes. For example, a solar energy system installation that costs $15,000 out of pocket will qualify for a tax deduction of $4,500. For residential systems, this advantageous incentive lasts until the end of 2032 at which point it steps down to 26 percent. The federal ITC drops to 22 percent in 2034 and is eliminated for residential solar installations in 2035. Commercial systems are eligible at least through 2024, but may not be eligible for the full 30 percent depending on certain labor and domestic manufacturing requirements; they also may be eligible for specific ITC adders.
Besides the federal ITC, California has additional incentives for going solar that are dependent on your area and utility company. Of note are local rebates, the availability of net metering 2.0, and the California Solar Initiative income-eligible solar incentive programs. To learn more about the financial incentives available for solar installations in CA, check out the complete overview of the state’s best solar incentives.
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Learn more about EnergySageCalifornia has taken significant steps to grow in-state solar: from reaching nearly 23 gigawatts of solar capacity across almost 900,000 solar installations to receiving in-state solar investments of $42 billion through 2018, California leads U.S. states in many solar categories. The state’s commitment to solar in the US is acutely apparent in SEIA’s Top 10 Solar States list: notably, not even the next eight ranked states combined had installed as much solar energy capacity as California in 2018. The history of solar energy in the Golden State spans back to the industry’s earliest roots and is a story of steady progress.
California first began promoting solar energy in 1976, when the state passed tax legislation to provide financial incentives for investment in the technology. Building upon this initial commitment solar, the state quickly passed the Solar Rights Act (CA Civil Code 714) in 1978, which bars restrictions by homeowners associations (HOAs) on the installation of solar energy systems. The state’s commitment to the solar industry fostered an environment of growth that ultimately led to ARCO Solar’s 1980 completion of a 1 megawatt (MW) photovoltaic facility in Camarillo, an impressive capacity for solar at that time.
The state’s booming solar industry truly began to take form with the 1996 passage of the Electric Utility Industry Restructuring Act (Assembly Bill 1890). This progressive energy law made California the first state to deregulate its utility companies, meaning, among other things, that customers could now choose their electric generation supplier. Equally important, California also adopted net metering policies in 1996, allowing excess solar energy to be fed back into the grid, further incentivizing consumers to pursue solar. These state-led initiatives formed the bedrock of California’s solar energy industry.
More recently, an important catalyst for growth in California’s solar industry is the enacting of the California Solar Initiative (CSI) in 2006. The Governor Schwarzenegger-supported legislation designed and provided upfront solar installation rebates to residential and commercial property owners through the state’s three largest investor-owned-utilities – Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E). The 2-plus billion dollar program surpassed its intended goal to reach 1,940 MW of new solar generation capacity by 2016, two years ahead of schedule, creating a sustainable market without leaving behind any burdensome legacy costs.
The future for solar energy in California looks as bright as ever. Following the sunsetting of the CSI, California’s state government has pushed even further forward on solar. In 2015, Governor Brown signed into law the Clean Energy and Pollution Reduction Act (Senate Bill 350), which mandates a Renewable Portfolio Standard (RPS) of 33 percent by 2020 and 50 percent by 2030. In 2018, Governor Brown and the state legislature took renewable energy policy two steps further by first requiring the electric sector to decarbonize by 2050 and, second, by requiring the entire state economy to decarbonize by the same year.
Perhaps the most innovative piece of solar legislation from California also came in 2018 as the California Energy Commission (CEC) passed requirements on the 2019 Building Energy Efficiency Standards mandating that all new homes must have solar panels beginning 2020. These policies, both old and new, all but guarantee a successful future for solar in California.
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