Is Solar Worth It In California? Solar Costs and Savings Ca

Updated on November 22, 2022

As a general rule, solar power is worth it in California. The investor-owned utility companies operate near-retail buyback programs and other rebates include low-income family incentives. The combination of the Federal Solar Tax Rebate and retail buyback rates make solar panels worth it in California, with a payback period of under 6 years.

California has a lot of sun energy available and it seems to make complete sense to convert that energy into electrical power we can use.

I’m going to delve into all aspects of California solar panels, complete with installation costs, how much power you can expect to generate and how long such a system will take to pay for itself.

The 4 main investor-owned utility companies have recently moved to Time-of-Use billing, which means that your electricity is more expensive at peak times.

These new tariffs and the possibility of future rolling blackouts as the grid becomes more loaded make solar power even more attractive in the Golden State.

What you will learn in this post:

  • How much solar energy in kilowatt-hours a typical California home uses
  • How solar systems are installed and what equipment is needed
  • What is the total cost of a California solar panel installation?
  • What are the associated maintenance costs of going solar?
  • How much power over the year in kWh can solar produce in Ca?
  • How to size solar panels for the typical California home
  • What are the federal, state and other incentives for installing solar panels in California.

How much money do solar panels save in California?

Solar power is definitely the way of the future – it saves resources and it also saves you money, so it’s really worth looking at! Are solar panels actually worth it? Let’s see.

I’ll go through some solar basics before looking at the specific details for your state, but if you don’t need to know more about solar panels, just use the Page Content Menu below and click through to the post sections that interest you.

Our partner is Renogy Solar – nationwide solar suppliers of innovative quality products. 

What do I need to hook up solar panels to my house?

What do I need to hook up solar panels to my house?

What equipment is needed for a home solar installation?

Local permits are required for solar power installations and this is taken care of by the professionals chosen to install your solar panels.

Grid-tied solar system components

  1. Solar panels and associated aluminum mounting rails for installing on the roof
  2. Solar string inverter or micro-inverters for converting DC to AC
  3. DC and AC Cables for interconnections and associated junction boxes
  4. Safety devices such circuit-breakers
  5. Net-metering equipment for measuring power in and out of the grid
  6. Home energy storage (lithium-based or lead-acid deep-cycle batteries) – a necessity for off-grid systems
Grid-tied solar system components

Solar panels are mounted on aluminum rails for roof mounting

The video below shows a team installing a fairly standard solar PV system installation and lasts for about 12 mins.

It demonstrates the activities involved throughout the installation and it shows the procedure for solar panel roof mounting in some detail.

The solar panels the team fitted on this home were kitted out with micro-inverters. These work in a different way than string inverters, in that they take care of the voltage conversion at the panel, rather than for a group of panels.

Inverters change solar panel DC volts into the AC needed by home appliances. A solar grid-tie solar power system can’t function without one or more inverters.

Micro-inverters are devices fitted to the back-plate of each individual panel and are proven to be more efficient than central or string inverters.

Most home solar power systems still use string inverters, converting the DC power produced by a group of up to 10 panels connected together in a ‘string’.

  • One of my previous posts, How Solar Inverters Work, gives a lot of more detail about how different types of inverters work.
  • This next article goes through grid-tie solar power system design, and was written by a Solar Empower consultant expert – designing a solar system.

Even if you use professional installers (strongly recommended), it doesn’t hurt to understand the equipment involved and the principles of operation of solar installations.

How long do solar panels last on average?

The best quality solar panel manufacturers give guarantees and normally specify 20 to 30 years life, in general.

That said, they can work quite effectively for years more, perhaps 50 years of useful power generation. Solar panels are tough. The output does reduce as the solar cells efficiency falls, but but this occurs at a pace of about 0.5 to 0.8% per annum.

The specification sheet provided details the warranty conditions and what to expect. Usually specifying 90% of original rated generation after 10 years working life and 80% after 20 years from the installation date.

Associated equipment is protected by separate warranties to protect the home-owner against early component failure. If a vital component such as an inverter becomes faulty within so many years, a new one will be provided free of charge.

Solar panels are the most durable part of the whole system, while inverters generally come with a product guarantee period of between 12 to 15 years.

Microinverters and power optimizers have better longevity, and can last as long as the solar panels, therefore they usually come with a longer guarantee period.

Micro-inverters are really the best option for generating optimum power output in partial shading situations.

How does a grid tied solar system work?

Solar panel diagram with explanation

Solar panel diagram with explanation

Block diagram showing how grid-tie solar components connect together

The black arrows represents the  DC voltage flow before it’s changed to AC by the inverter. The red arrows show the AC power flow.

The green arrows indicate that power can flow from the power grid to the home in the normal way.

Note: Net-Metering is required (top right-hand corner) to keep track of the flow of power between the grid and the home.

This is one of the sweet features of a grid-tied solar power installations – if more power than needed is generated, then the excess is fed back into the grid.

Home appliances will draw power from the solar panels before drawing power from the grid, but will take power from the grid if cloudy conditions reduce solar power generation, or at any time the sun isn’t shining.

How does the federal solar tax credit work IRS in California?

Who can claim the solar tax credit?

The solar tax credit is an incentive introduced by the federal government enabling home-owners to claim a refund of a certain percentage of the cost of installing a solar power system.

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It’s done by entering the capital cost in the next year’s IRS return and your tax owed is reduced ‘dollar-for-dollar’.  With a tax rebate of $1600 and say you owe $4600, you will pay only $3000.

Example: The solar tax rebate for 2021 is being maintained at 26%. If a solar power installation costs $17000, then your tax rebate is calculated like this:

17000 x 26% = $4420 refund against taxes

The rebate started out at 30% in 2019, went down to 26% in 2020 through 2022 and will go down to 22% for panels installed in 2023.

The tax credit is supposed to stop after 2023, but it will probably be extended as President Biden just announced a renewed commitment to all things solar (April 2021).

Source: Federal Solar Tax Credits

What solar rebates are available in California?

California is one of the sunniest states and is the perfect location for investing in solar.

There isn’t a state-wide solar incentive program and very few utility companies run their own schemes, but it’s best to check your own provider – you never know!

The table below presents the main California solar incentive programs, who is eligible and what is rebate provided:

Table – Solar incentives schemes for California

Incentive —>

How much?

26% in 2021

Almost retail

$3/watt of installed solar

$1.10/$1.80 watt according to Track.

$200-$1,000 per kWh storage

Who eligible?

Federal tax payers

Customers of investor owned utilities ((PG&E, SoCal Ed, SDG&E)

Low-income home-owners (less than 80% median income)

Multi-family buildings

Customers of PG&E, SCE, Southern California Gas, or SDG&E

Any limitations?

Use cash or solar loan, not leased. No kWh limit.

All customers

Customers of PG&E, SoCal Ed or SDG&E

See website. Also, there is a waiting list

See website

Valid until

Falls to 22% in 2023

Buy-back guaranteed for 20 years from installation




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Net-metering in Ca – buyback rates

PG&E, SoCal Ed and SDG&E utility companies run buyback programs and they pay retail rates minus a small surcharge.

What is the average payback period for solar panels in California?

California really is a sunny state and the average payback time is generally less than 6 years.

How to calculate payback period for solar panels in California

Divide the total cost of your solar power installation (minus tax credits and other incentives) by the amount saved in electricity costs over the year.

Free-to-use site such as Global Solar Atlas, provide the irradiance value for any geographic location. This is what we need to work out how much power a solar power system can generate.

Irradiance is measured in kilowatt hours per m2/day or year (kWh/day), usually called Peak Sun Hours.

In the  next section I’ll work out the payback period for 5kW solar system installed in San Francisco.

Are solar panels worth it in California?

Payback Calculation For A 5kW Solar Panel Installation In San Francisco (2021)

<a href="">Are solar panels worth it in California?</a>

What is the average solar payback period in San Francisco, Ca?

  • City: San Francisco
  • Solar system size: 5kW
  • Total installation cost = $17000 – 26% federal tax credit = $12580
  • Irradiance at San Francisco, Ca = 2089.1 Peak Sun Hours
  • Power generated by solar panels = 2089.1 x 5kw = 10445 kWh(kilowatt-hours)
  • San Francisco residential electricity cost per kWh = 25.7 cents/kWh
  • Yearly savings = solar production x electricity cost = 10445 x 25.7 = $2684
  • Solar payback time San Francisco = solar cost/yearly savings = 12580/2684 = 4.68 years

Do solar panels increase property value in California?

Recent studies show that home values respond very positively to solar installations.

A home-owner can expect an increase in house value of up to $6000 per installed solar watt, which means an increase of up to $30000 for a 5kW system.

What are the two main factors that influence the PV generation?

Solar panel power output is reduced by several things, and most of them are beyond our control.

Tilt angle and shading from nearby buildings or trees can combine with other factors we can’t change, such as local weather conditions.

7 of the main factors reducing solar system power output are listed below:

  1. Irradiance (also called peak sun hours) is a direct measure of how much sun energy can falling across the solar panel’s surface.
  2. Shading. Solar panel need clear skies if they are to generate maximum power.
  3. Maintenance. Regular cleaning will save losses of up to 15%. (Twice a year)
  4. Choose high quality solar panels for the highest power output.
  5. Orientation. Solar panels should face South for best results (Northern Hemisphere).
  6. Tilt angle. The best title angle is 60 degrees for a fixed solar installation.
  7. Temperature. Over-heating brings down the efficiency of solar cells, which is why space is left. between the roof and the panels.

What direction is best for solar panels in California?

The best direction to point solar panels in any location in the Northern hemisphere is due South, but it’s not a disaster if this can’t be done. Professional installers can always find innovative solutions to this kind of problem.

A solar panel array can face Southwest or Southeast, and can even generate good amounts of power facing the West or the East. North-facing should really be avoided, because there’s very little direct sunlight.

What is the best tilt angle for solar panels in California?

For a fixed solar system 45 degrees is a compromise tilt angle that gives good power generation all year round..

If your installation has tilt adjustment, the summer setting for your panels should your location latitude minus 15 degrees. The winter tilt angle should be your location latitude plus 15 degrees. These settings will optimize the power output through the year.

For San Francisco, for example, this would be 22.77° for the summer and a winter tilt angle of 52.77°.

The table below shows difference in watts  output over the year for San Francisco when a solar array is tilted at an angle of 52 degrees. The power output is compared to the power generated when a solar array is installed ‘flat’.

Peak sun hour values 12 months for San Francisco, Ca – power output Vs Tilt

Insolation by month for San Francisco, Ca by month (kWh/m2/day – also are known as Peak-Sun-Hours)


























52 °













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A sun-tracker could be installed to point the solar panels towards the sun constantly, which would increase the power output by as much as 40%.

The downside is that sun tracking systems cost something like 25% of the total installation costs and they aren’t that cost-effective for relatively small home solar installations.

If at any time you need more power it’s generally best to simply install more solar panels – it would be much less expensive than sun-tracking.

How can I check my energy consumption at home in California?

You could set up a meter to measure exactly how much power you take from the grid in real-time, but this is a tedious way to measure your home’s energy usage.

It can work quite well for many appliances but for devices like fridges and freezers, it presents problems because they use compressors which have motors cycling on and off.

A motor’s start current (surge current) can be 3 times higher than when it’s running. Also, some of the time they are not running at all, so you have 3 possible states.

By far the best way for assessing your home’s energy use is to take it from last year’s utility bill. This is all an installer needs to work out what size of solar array you need.

How can I check my energy consumption at home in California?

How much energy does your home use? Find it on your utility bill.

How many solar panels do I need to power my house in California?

Solar panels sizing calculator

Most domestic solar panel sizes are rated between 2oo to 385 watts. When entering the panels size into the calculator, the power rating must be in kilowatts – i.e. 300 watts is a good size and would be written as 0.300 watts.

I talked about various losses found with solar electric generation and the calculator automatically deducts typical losses of a home solar system.

Use the site Global Solar Atlas to get the peak sun hours for your location. Enter peak-sun-hours for your city and the calculator will tell you how many solar panels will be needed according to your location and energy required in kWh.

Note: This is for a rough estimation – professional installers provide accurate assessments.

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Homeowner Solar Inquiry Form

Do you live in California? If you are interested in solar, would like more information or would like a survey of your property, please complete the following form.


There is no commitment of any kind, it’s simply a request for home solar information.
Your personal details will not be saved or sold.
You will be contacted by an approved solar professional in your area.

Homeowner Solar Inquiry Form

Solar panel sizing – it’s worth doing it right

How much does it cost to install solar panels in California?

Solar Panels










Permits & Inspections


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It’s possible to save up to 50% of the solar installation cost by doing it yourself. Of course, you would need help with the bureaucracy and technical expertise for grid connections, etc.

Although many people have gone this route, overall costs are reducing so much that it’s mostly worth it contracting a professional solar installer to estimate how much it costs to install solar.

Energy Consumption & Solar System Statistics For California


Average kWh used per month

Ave kWh used per day


Solar required for 100% energy used (kW)

Installation price Per Watt ($) 2021







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Solar EV charging station In California

If you already drive an EV or are planning to buy one, solar charging is a great idea in the Golden State.

If you charge your EV with grid power, your utility costs will of course increase and you’ll put more demand on the grid.

California recently launched an appeal for people not to charge their electric vehicles in peak hours because the power grid is under severe strain and the growth of EV use is accelerating.

It makes sense to use solar for charging, particularly as kWh prices are so high and there are still good incentives in place. It could also save rolling blackouts in the future.

EV Solar Charging Station in Ca – How Many Solar Panels Needed To Charge A Nissan Leaf?

I’ll go through a design study of an EV solar charging station focussing on the Nissan Leaf. The specs. for a Nissan Leaf S with a 40 kWh battery are displayed in the table below:



Electric motor

110 kW AC synchronous

Horse Power

147 hp


236 lb-ft2


40 kWh Li-ion

On-board Charger

6.6 kW

Quick charge port (optional)

50 kW

Portable trick charge cable

120 volts

EPA* Drive Range

149 MPGe**

City drive range

123 MPGe

Highway drive range

99 MPGe

Combined drive range

111 MPGe

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*EPA – Environment Protection Agency
**MPGe – Miles per gallon gasoline equivalent. 1MPGe ~ 1 mile per 33.7 kWh

How much energy (kWh) is required to charge Nissan Leaf S EV?

It isn’t necessary to use the whole battery capacity as statistics show that a battery is almost never drained during normal use.

The average US commute is just 30 miles per day, so we’ll use that figure. If we use the combined driving range of 111 MPGe for an average efficiency value of the Leaf, this equates to about 3.3 miles per kWh.

This means that driving a Nissan Leaf 30 miles/day, about 10 kWh of energy is needed from the battery at an efficiency of 3.3 miles per kWh.

For other ranges amount of energy needed can be seen in the table below:

Drive Range

Efficiency in MPGe or mile per kWh

Energy (kWh) required for 30 miles per day


149 MPGe or 4.4 mile per kWh

7 kWh


123 MPGe or 3.6 mile per kWh

9 kWh


99 MPGe or 2.9 mile per kWh

11 kWh

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Solar EV Charging At Home in California– How much will it cost to charge an EV at home?

<span id="Solar_EV_Charging_At_Home_-_How_much_does_it_cost_to_charge_an_EV_at_home" class="ez-toc-section"></span>Solar EV Charging At Home in California– How much will it cost to charge an EV at home?

Solar EV charging in Ca – Nissan Leaf

For the  Nissan Leaf S 40 kWh in question, let’s take a look at grid charging cost for an average San Francisco, Ca household.

If we take the average home SF electricity price of 25 cents/kWh, then to charge a 40kWh battery of Nissan Leaf S, it will cost almost $10 per full charge.

Solar EV charging system design for Nissan Leaf S (40kWh battery)

Although you can use your home grid-tie solar system to charge an EV, a solar panel system can power the Leaf by itself – it doesn’t have to have grid connection.

To recap:

  • the Nissan Leaf S takes about 20 hours to fully recharge using Level 1 charger with supply volts of 120V.
  • If you opt for a  Level 2 charger at a voltage of 220/240V then charging can be complete in 4 to 8 hours.
  • A Level 3 charger or DC fast charger can recharge a Nissan Leaf S fully in around 30 min.

The amount of time required to charge an EV by solar power depends on:

  • Geographic location of the solar panels
  • Irradiation level of the geographic location
  • How many solar panels will be used
  • How much energy is needed from solar panels (how depleted is the battery?)

We will assume the average US commute of 30 miles/day and with a combined range of highway and city.

I previously said that 10kWh of energy is required for battery charging everyday for the daily commute of 30 miles.

The equipment needed for a solar EV design are:

  • Solar PV panels
  • Solar inverter
  • MPPT charge controller
  • Energy storage batteries (lithium recommended)
  • Electric vehicle supply equipment (EVSE)

NOTE: You might suppose that direct current (DC) generated by solar could be used directly to charge batteries or charge EVs with a DC charger.

In principle this would make for  fast charging and improve efficiency by eliminating the DC/AC inverter, but this is still being researched.

For home EV charging equipment, the Nissan Leaf can be recharged with either Level 1 (120V) or Level 2 (240V) chargers.

I’m going to consider 240V charging from our solar panel array and would take 8 hours to fully recharge Nissan Leaf S 40kWh battery.

Let’s assume the system will be located in San Francisco, Ca. The irradiation level in this location is 5.72kWh/m2/day.

Best design practice means we need to add 35% of the overall energy needed , because of various losses in the system, so the power in watts needs to be multiplied by 1.5.

  • 10kWh /day x 1.5 = 15kWh /day is to be supplied to the EV on-board charger.
  • The efficiency of inverter and battery used for storing and supplying energy from the solar panels is about 90%.
  • The energy to be supplied by solar panels to the solar inverter and battery = 15/0.9 = 16.6 kWh /day.
  • Considering average normal irradiation to be 5.72kWh/m2, 16.6 kWh of electricity can be generated by 16.6/5.72 = 2.9 (3kW) of solar power.

If using 300W solar panels then 10 will be needed to supply 10kWh of energy for a daily commute of 30 miles in a Nissan Leaf S.

Solar charging time will be the same as when connected to a home AC socket. It depends on the charge used in the EV battery and solar energy storage.

Solar Charging Station For Electric Vehicles In California

Solar EV charging station cost analysis – practical solar electric vehicle charging

<span id="Solar_Charging_Station_For_Electric_Vehicles" class="ez-toc-section"></span><strong>Solar Charging Station For Electric Vehicles In California</strong>

What would an EV solar charging station cost in California?

The cost of building a diy solar EV charging station for the previous calculation is as follows:

  • Solar panel array: $9000
  • Off-grid solar inverter: $5000
  • Energy storage batteries: $10000
  • Solar Charge Controller: $500
  • Wires and cables: $300
  • Miscellaneous: $200

Total cost: $25000

The estimation uses current average prices (2021) in the USA, so there will be variations.

The biggest cost in an off-grid solar system is of course, the batteries, and the amount of energy storage backup required defines the cost to a large extent.

If batteries aren’t used, then the solar array can only charge the electric vehicle in daylight hours when there are good amounts of sunlight.

This will reduce the installation cost of the solar power system but will also limits the time within which the electric vehicle can be charged.

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Related Questions:

What happens to solar output when the power goes out?

A grid-tie solar system disconnects itself from the grid when the power goes out. This is done to protect line-workers that might be repairing parts of grid.

The safety measure is called ‘anti-islanding‘. Islanding describes a solar power system that still generates power when the grid goes down and this is a dangerous situation.

What do home solar systems cost in California?

Typical professional installation costs for domestic solar installations in California is $2.68 per watt (2021), which means the average cost of a 6kW system would be $16080 without the Federal Solar Tax Rebate or other local incentives.

Resources relating to ‘Is solar worth it in California?’:

Government Guide – Solar Tax Rebate:

Guide To Federal Solar Tax Rebate

Are solar panels worth it in California? (Solar Guide)

Is solar power worth it in UK?

California Solar Energy Statistics and Data

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