How Much Do Solar Panels Cost In California?

California has 1.5 million solar power systems installed across the state — and it’s no surprise that they’re a leader in solar panel adoption. Year-round sunshine, some of the highest electricity prices in the U.S., and favorable solar policies have driven their popularity over the last ten years. Though California stopped offering net metering in 2023, several solar rebates and incentives still make solar panels a worthwhile investment. Below, we discuss the cost of solar panels in California and whether it’s the right solution for you.

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

One of the biggest factors affecting the cost of solar panels in California is the amount of power your home will need to cover your electricity consumption. 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.

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

The size of your solar panel system will depend on 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.

Many factors can influence the cost of your solar panels

• Electricity consumption: Depending on the size and age of your home and the size of your family, you will need more or less electricity and therefore more or less panels. Larger homes require more power, while older homes are less energy efficient. Naturally, the more people you have in the home, the more electricity you consume. These factors will help determine how many panels you need, affecting the total cost.

• 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.

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.

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.

As such, 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.