How Much Do Solar Panels Cost in California? (2024) – MarketWatch

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There are several ways to reduce the cost of solar panel installations in California.

Use Federal and State Incentives

California used to offer more state incentives for solar panels, but most programs were phased out by 2023. However, you can still benefit from two major incentives: a property tax exclusion and the Self-Generation Incentive Program.

  • Property tax exclusion: If you install solar panels in California, the assessed value of your home and its property taxes will not increase. This benefit is available for owners of solar panel systems installed before 2025. As an example, if you own a $500,000 home and installing solar panels adds $30,000 to your property value, you would still only be taxed for the initial $500,000.
  • Self-Generation Incentive Program (SGIP): If you install a home battery in California, you get an incentive of $0.15 per watt-hour of storage capacity (or $150 per kWh). For example, a 16 kWh battery qualifies for a $2,400 rebate. This incentive is available for customers of Pacific Gas & Electric (PG&E), San Diego Gas & Electric (SDG&E), Southern California Edison (SCE) and Southern California Gas (SoCalGas).

You can combine local incentives with the 30% federal tax credit, which you can claim for solar panels and battery systems. This nationwide program allows you to claim 30% of your total solar system cost as a credit toward your federal tax burden. So, if you install a 5 kW system and a 10 kWh battery for $25,000, you could claim a $7,500 tax credit.

In September 2023, we surveyed 1,000 homeowners with solar panels, including 120 participants from California. Here is a breakdown of which solar incentives California residents claimed:

Incentive Percentage of Respondents
30% federal tax credit 41%
Local rebates* 33%
Did not claim incentives 9%

*The availability of local rebates varies by area. You can check with your local government or utility company to see if you qualify for any additional incentives. 

Enroll in Net Metering

The MarketWatch Guides team usually recommends participating in net metering programs that allow you to sell the excess energy your panels generate to local electric companies for billing credits. But in the case of California, we recommend storing surplus production in a solar battery and only selling excess energy after you fully charge your battery.

California introduced NEM 3.0 in April 2023, which drastically reduced solar export tariffs for homeowners. Comparatively, you can save the full value of solar electricity stored in a battery to use later, but you would only make a few pennies by sending surplus energy to the grid.

You can still enroll in net metering despite the state’s low rates, but we do not recommend exporting all your surplus production at reduced prices. For example, there may be times when your battery is full and your solar panels still have excess production you can send to the grid. In this case, you benefit from using stored energy to offset grid power, rather than sending the majority to the grid at a reduced cost.

The largest utility companies in California also have the largest net metering programs. You can find detailed information on the PG&E, SDG&E or SCE websites.

Compare Quotes from Multiple Installers

To ensure you get the best possible offer, we recommend comparing quotes from several solar companies. As a reference, solar panels have an average cost of $2.51 per watt in California, but premium brands like SunPower can reach more than $4 per watt.

As you compare solar providers, ask for a detailed breakdown of each solar package instead of an overall price. With a breakdown, you will know exactly what components the provider includes in its offer.

Be suspicious of excessively low solar panel offers that could include buying low-quality equipment. On the other hand, if you receive an excessively high offer, ask the provider if it includes components like a home battery or EV charger.

Based on our industry research, we recommend the following solar companies in California:

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