Going solar in California could be worth it even with the state’s new net metering rules.
California is a leader in the solar industry, with enough solar power installed statewide as of December to power 10.7 million homes. Solar panels may be a good option if you live in the Golden State and are interested in lowering your household carbon emissions while also saving on energy bills.
California’s average residential electricity rate is higher than the national average making Californians pay a higher traditional energy bill than residents in other states, according to SaveOnEnergy, CNET’s sister company.
On April 15, California’s new net metering regulations went into effect. Overall, they increase the incentives for going solar with a battery while reducing the payouts for solar without storage.
Meanwhile, the cost of residential solar panels has decreased by more than 69% in the last two decades, according to a Lawrence Berkeley National Laboratory report. Tax credits and rebates at the federal, state and local levels can help bring that cost down further. Whether you’re interested in helping the environment or lowering your energy bills, the amount you could save on solar panels in 2022 is higher than in previous years.
California solar panel costs
The cost of a home solar panel system will depend on the system size (i.e., the number of panels included), components like solar batteries and installation costs. California’s average solar panel system is smaller (and therefore cheaper) than the national average, even though the cost per watt is normally above the US average.
Because solar is so popular in California, there is also a high number of solar panel installers, which gives customers plenty of options to choose from when looking for the right solar company.
Here’s a breakdown of the average size and cost of solar panels in California and nationwide based on 2022 data from Findenergy.com and consulting firm Wood Mackenzie.
How to pay for solar panels in Californ
If you decide to invest in solar panels for your home, there are several financing options to make the purchase easier.
Cash: A big expensive project like solar panels requires a lot of cash. If you see solar power in your future consider saving money now. Regular contributions to a high-yield savings account can help pad your savings.
Solar loan: Many solar companies will offer third party financing. Shop around with different lenders, because your solar company’s third party choice might not have the best terms or interest rate.
California solar panel incentives and rebates
Even though the cost of solar panels has decreased in the last two decades, they’re still a substantial investment. But several solar tax credits and incentives make solar more affordable, especially in California. One key solar incentive, net metering, was reduced in a utility commission vote last year. When that change goes into effect April 15, it’s expected to increase a solar system’s payback period from six years to 10. California also introduced time of use rates, which could make installing backup batteries more profitable.
The residential clean energy credit (previously known as the investment tax credit) is a federal solar tax incentive offered in California that credits 30% of the cost of a solar system back to consumers who buy solar panels. This solar tax credit was increased and extended due to the Inflation Reduction Act, passed in August. There is no cap on the federal tax credit, so you can claim the entire 30% regardless of the size of the system.
You can apply for the residential clean energy credit by including IRS Form 5695 with your tax return. The IRS provides instructions on how to fill out this form, or the best tax software can take care of it for you. Your savings from the tax credit will be included in your tax refund or used to offset taxes you owe.
There are various state and local solar incentives available in California, too. You can find a more comprehensive list through the Database of State Incentives for Renewables and Efficiency. Here are just a few you should know.
California solar panel companies
According to the Solar Energy Industry Association, nearly 2,000 solar companies operate across California. While this means there are plenty of California solar installers to choose from, it can also feel overwhelming to sort through your options.
We’ve compiled a list of solar panel companies that stand out in the industry. Here are a few California solar installers you can consider during your search.
Formerly Sunpro Solar, ADT Solar operates throughout California and provides a variety of solar systems, including battery installations. ADT Solar says it prioritizes customer satisfaction and offers 25-year labor, power production and manufacturer warranties. The company also extends a price-match guarantee on installations.
ADT Solar does not offer solar leases or PPAs. It previously preferred to source its solar panels from LG, which left the industry in 2022. Since then, ADT Solar has confirmed it is committed to providing solar customers with a 25-year manufacturer warranty and will continue to extend a 25-year production guarantee from ADT.
Palmetto is one of the largest solar companies in the country and offers home solar systems in California. With Palmetto, you can buy solar panels outright or sign a solar lease or PPA. The majority of Palmetto’s customers choose to buy their solar system to save the most money on energy bills over time.
Palmetto has operated in the solar industry since 2010 and says it’s committed to top-tier customer service. It offers a subscription called Palmetto Protect, which monitors the performance of a solar system and provides tiered levels of support if the solar panels are damaged or fail. Palmetto solar panels have an efficiency rating above 19.8%, a minimum 12-year product warranty, and a 25-year performance guarantee.
SunPower offers some of the most efficient residential solar panels and the best warranties on the market. With an efficiency rating of up to 22.8%, the SunPower Equinox solar panels outrank all competitors. The SunPower Equinox package includes solar panels from Maxeon, a manufacturer that worked with the company until 2020, and Enphase microinverters and mounting equipment.
SunPower operates across most California regions and aims to continue providing more accessible and affordable solar products. The company was founded in 1985 and offers some of the strongest warranties available, guaranteeing 92% production capacity for 25 years.
Sunrun is the largest solar company in the US and offers a strong lineup of solar products and warranties. Sunrun’s focus is on solar leases, which come with a different set of pros and cons, but can be a good option for consumers who aren’t able to purchase a solar system. While most of Sunrun’s customers lease their equipment, the company still offers the option to buy solar panels.
The company currently sources its solar panels from several manufacturers. For people who lease their system from Sunrun, the company provides “bumper-to-bumper” coverage on maintenance and monitoring. However, those looking to buy a system will rely on the manufacturer’s warranties. Sunrun does offer a 10-year quality warranty, which covers roof damage and installation issues.
Tesla became a big player in the solar market in 2016 when it purchased SolarCity, which significantly increased Tesla’s installation capacity. Between the solar panel branch of Tesla and the Tesla Solar Roof, Tesla is one of the most recognizable brands in the industry.
The price tag, efficiency rating and warranty terms will differ depending on the solar system you buy from Tesla. The Tesla Solar Roof comes with a 25-year product warranty and a performance warranty at 95% capacity after five years and 85% after 25 years. However, the Solar Roof has a much higher price tag than many competitors.
Meanwhile, Tesla solar panels are more affordable than the Solar Roof, and the quality remains high. Its solar panels are warranted at 85% capacity after 25 years and have an efficiency range between 19.3% to 20.6%. It is worth noting that some Tesla customers have reported issues with customer service.
Installation factors to keep in mind
Solar panels are a big investment, so it’s important to consider all elements that could impact whether they’re right for you. Some installation aspects to consider include:
- The condition of your roof: The size, shape and slope of your roof can affect how much electricity a solar system generates. According to the Department of Energy, solar panels are most efficient on roofs with a slope between 15 and 40 degrees. The age and overall condition of your roof are also considerations. Older roofs or roofs needing maintenance should be replaced or repaired before solar panel installation.
- HOA and neighborhood regulations: California law prohibits homeowner associations from banning solar panel installations, but there may still be specific requirements and approval processes in your neighborhood. Be sure to research the requirements for solar installation in your neighborhood ahead of time, so there are no issues down the road.
- Insurance coverage: After installing solar panels, contact your homeowner’s insurance agency to add the panels to your policy. Most standard homeowner’s policies cover rooftop solar panels, but you’ll need to check with your agency for the specific details of your policy.
- Your location: Solar panels are designed to work in all climates and areas that receive indirect sunlight. But they’ll be much more efficient when installed where they receive at least four hours of direct sunlight each day. If your home is in a cloudy region of California or gets shade coverage throughout the day, a solar panel system will not generate as much electricity as it would with direct sunlight.
- Rentals: If you rent your home, you may not be allowed to install solar panels. You can check with your landlord or rental management company to confirm whether solar panels are allowed. If not, you can consider community solar programs as an alternative. These let you subscribe to electricity produced by solar panels at another location and receive a credit on your energy bills. The subscription fees are set at a lower rate than the value of these credits, so you come out ahead financially. In California, community solar programs are expected to grow quickly due to new regulations.
Source: cnet.com/home ~ By Caitlin Ritchie ~ Image: Canva Pro