Solar Energy in California
California is an industry leader when it comes to solar energy generation. The state produces more than 33 percent of the nation’s total solar power, putting it significantly ahead of any other state. California began promoting solar energy much earlier than other states, as far back as 1976.
A huge factor contributing to California’s high rate of solar power generation is the number of homeowners who have installed residential solar systems on their properties.
Keep reading to learn all about residential solar power in California.
California Solar Panel Cost
In sunny California, you can get a 6 kW solar panel system for about $15,060, which roughly translates to $2.51 per watt. It’s no surprise California leads the nation in solar power, with over a quarter of its energy harnessed from the sun!
There are several financing options available to help cover the costs of your solar panel. You can buy your system outright, but many homeowners finance it over the course of six to nine years. You can also choose to lease your solar system.
What Affects The California Solar Panel Cost ?
Here are some key factors that can increase or decrease the cost of solar panels in California, including:
Size Of Solar System
The size of your solar system is a primary factor in determining its cost. A larger solar system includes more solar panels, a bigger inverter, and additional cables, and this naturally results in higher expenses. However, the size of your system should align with your home’s energy consumption and electricity bills.
For instance, the average California home consumes over 7,000 kilowatt-hours (kWh) of energy annually. Using this as a reference point, a 5 kW solar system could cover the energy needs of an average home. This installation typically costs around $8,785 after factoring in the federal tax credit.
Solar Incentives in California
California offers array of incentives to make solar power more affordable for homeowners. These incentives include:
Direct Rebates: Homeowners can benefit from direct rebates, which reduce the upfront costs of installing solar panels.
Tax Credits: There are various tax credits available, which can significantly lower the overall cost of going solar.
State Tax Exemptions: California offers state tax exemptions, further easing the financial burden of solar installations.
Net Metering: Net metering (NEM) allows homeowners to receive credits for excess electricity their solar panels produce, resulting in potential savings over time.
Types of Solar Equipment and Their Impact on Cost
The price of your solar system can be influenced by the type and quality of equipment you select. The latest solar panel models come in a variety of types, which offer different efficiencies and features. For instance, you have the choice between two common types: monocrystalline and polycrystalline solar panels. Since solar panels represent a significant portion of the total system cost, opting for cheaper panels will naturally result in a more affordable system.
This rule applies to other components of your system as well. For instance, systems that incorporate microinverters, power optimizers, or batteries may have a slightly higher initial cost.
Net metering, or Net Energy Metering (NEM), is like a unique program for people with solar panels. It lets you send extra solar power you don’t use back to the electric grid.
California Public Utilities Commission recently passed a new version of net metering (NEM) 3.0, that reduces the financial benefits of the state’s net-metered system.
Many solar companies lik Solar Earth INC offer solar financing options for homeowners who may not have the means to pay the full system cost upfront, there are alternatives such as:
Solar Loans: You can opt for a solar loan with manageable monthly repayments at a specific interest rate.
Solar Leases: Another option is a solar lease, where you essentially rent the solar system from a provider and make monthly payments.
Power Purchase Agreements (PPA): With a PPA, you also pay a monthly fee to use the solar system, typically with no initial investment.
The total cost of your solar system varies depending on the payment model you choose. A cash purchase requires the largest upfront payment but results in the most long-term savings. On the other hand, solar leases and PPAs may cost more over time, even though they don’t require an initial investment.
In essence, the payment option you select plays a significant role in determining both your immediate expenses and your overall savings from solar energy.
Why Choose Solar Energy?
There are several reasons why choosing a solar energy in California can be beneficial. Here are some key advantages:
Lower Energy Costs
Installing solar panels on your home can help significantly reduce your energy costs. As long as the sun shines, your home will be powered by solar energy rather than the electricity grid. As a result, you’ll see your electricity bill go down.
In addition to the monthly electricity savings, solar panels can also help you to see a return on your investment in the long run. Data shows that a residential solar system can increase your home’s resale value by $15,000. If you decide you sell, you may recoup the entire cost of your solar panels.
Establish Energy Independence
By relying on solar panels to power your home, you’re significantly reducing your dependence on the power grid. When you have energy independence, you don’t have to worry about power outages, and aren’t subject to steep price increases when electricity rates rise during times of high demand.
Solar panels aren’t just friendly to your wallet — they’re also friendly to the environment. Installing solar panels can reduce your electricity use, which lowers greenhouse gas emissions that can contribute to climate change and pollute the air and water.
California Solar Energy Incentives or Rebates
A residential solar system is a big investment, but there are plenty of incentives in place to help reduce your costs.
First, the federal government offers a 26 percent tax credit for solar systems installed in 2021 and 2022. There is also no cap on the amount you can claim, so you can fully benefit from the tax credit no matter how large your solar system is.
There are also some solar financing rates specific to California.
Perhaps the biggest incentive for California homeowners is the state’s net metering program. Under this program, net excess energy generation is credited to a customer’s next bill at the retail rate.
Should I Buy or Lease My Solar Panels?
When you install solar panels on your home, you’ll have the option of either buying or leasing the system. When you buy the solar panels, you can pay in stages or finance the system over a period of up to 25 years.
Leasing can seem like an attractive option, as it reduces your upfront cost and ensures you won’t be responsible for any future repairs. But there are some downsides to consider as well.
First, when you lease your system, you don’t get any of your investment back. While other homeowners will eventually own their systems outright and be done with their monthly payments, leasing means you’ll always have a payment.
Leasing a solar system won’t increase the resale value of your home. In fact, it might even make it more difficult to sell, since buyers would have to agree to take on your lease payments. In the long term, homeowners who buy their solar panels will see more savings over time than those who lease.
California Solar Panel Companies
Because California is a leader in solar power, there are a wide variety of solar panel companies available. Many solar installers can even create a customized solar system to ensure your home is benefiting to the fullest.
When you are ready to invest in solar energy, be sure to do your research into the many California solar companies available in your area. Until then, Save On Energy offers a range of tips and guides to help you navigate the solar industry.
The History of Solar Energy in California
Solar energy in California dates back to 1976 when the state passed a law to create financial incentives for investments in solar technology. Just a few years later, the state passed a law preventing neighborhood associations from banning solar systems.
In 1996, California strengthened its commitment to green energy with the passage of the Electric Utility Industry Restructuring Act. In addition to deregulating the energy industry, it also enacted its net metering policies that allow customers to save by feeding excess solar energy back into the grid.
California has continued to invest in solar energy in recent decades, going so far as to require that all new homes be built with solar panels.
Because of these progressive policies, it doesn’t come as a surprise that California has such a high rate of residential solar power generation. The state also has seen significant investment from utility companies and has many solar farms throughout the state.
Important Solar Installation Factors to Consider
Before installing your solar system, there are a few important things to consider:
- According to the U.S. Department of Energy, solar panels are most effective on north-facing roofs of between 20 to 30 degrees. They may not be well suited to older roofs that will need to be replaced in the near future.
- Consider the amount of sun your home gets. California gets a lot more sunshine than some other states, making solar power particularly attractive. But it’s important to consider how much sun your home receives in your location.
- In some states, HOAs and other neighborhood associations may have restrictions around the installation of solar panels or require prior approval. However, California law prevents bans on solar panels.
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