How much do solar panels cost in California? In 2025, this question has become a leading dilemma for homeowners/businesses who want to install solar panels. Installing solar panels in California costs between $10,000 and $25,000.
However, it depends on many factors such as the solar panel installer you choose, the size of the system, roof type, additional components like batteries, etc. But How do you know if the prices are right for you? Can you reduce the upfront cost? If yes, will it affect your long-term savings and payback period?
If you also have these questions, getting answers to them is important before planning installations. In this guide, we will answer how much do solar panels cost in California. We will cover everything from the cost of different system sizes to the cost of panels for different home sizes like 1500 sq ft and 2500 sq ft etc.
Before we move ahead, you must learn whether solar panels are worth it in California or not?
Cost of Solar Panels in California: Residential and Commerical Installations
In California, most residents install solar panels of 5 kilowatts (kW) which costs between $10,000 to $12,000 after including the installation costs. However, with federal tax credits, the price drops by 30%.
This price again depends on many factors such as the types of solar panels, size, complexity of installation, etc. Most residents get payback on their system within 6-12 years making solar worth investing.
Standard Homes: (1500 to 2500 sq. ft.): In California, for standard homes within this size range, a solar panel system of size 5 KW is normally used which costs approx $11,000(excluding the rebates).
However, if you have high-energy needs you can plan to install a large system of 7 to 10 kw which costs between $16,610 and $23,729 (excluding the rebates)
Large Homes (5,000 sq. ft. and above): If you have a larger home, you will have higher energy needs. You will need a solar panel system of 10 kw or more, depending on your needs. 10 kw solar panel system will cost you $23,729 and after including the 30% federal tax credit, it will cost $16,610. Learn in detail about solar panel installation for different home sizes here.
Similarly, if want to install commercial systems, they range between 10 kW to several megawatts. The cost of commercial solar systems in California starts at $43,000 for 25 kilowatt (kW) systems, and the price increases depending on the size of the system.
👉Know the Cheapest Way to get home power off grid here
Main Components of Solar Panel Systems and Their Cost
A solar panel system consists of all the components like solar panels, inverters, batteries, other hardware, wiring, etc. Besides this, there are installation costs that depend on the solar panel company.
Solar Panels: These are the main components of a solar panel system. They capture the sunlight and account for about 12% of the total solar panel installation cost.
Inverter: The inverter converts the direct current (DC) generated by the solar panels into alternating current (AC) which is used to power the electrical equipment at home.
Mounting Hardware: It is used to secure the solar panels into the roof or the ground structure.
Electrical Wiring and Components: Besides all the main components, other necessary things like wiring, connectors, etc have a certain cost.
Installation Costs/ Labor: There are different charges for installation depending on the complexity of the project and local labor rates.
Battery Storage: If you are using a grid-tied system you might not need the battery to store the extra energy. However, with off-grid solar panel systems, there is additional cost of batteriies which is high.
EquipmentEstimated Cost Before IncentivesInverter$1,000 – $2,500Mounting Hardware$500 – $1,500Electrical Wiring$500 – $1,000Monitoring System$300 – $1,000Battery Storage$5,000 – $15,000
👉Learn about Flexible Solar Panels here
Financing Options to Reduce Cost of Solar Panels in California
How much solar panels cost in California can also depend on how you plan to buy them. There are various financing options to purchase solar panels and each of them has its own benefit. Such as:
Solar Loans: Rather than giving all money in cash, homeowners can obtain loans for solar panel installations. For example, Star One Credit Union offers solar loans with rates as low as 6.25% APR. It will help you manage the upfront costs.
Home Equity Lines of Credit (HELOCs): You can also secure funds for installing solar panels. It provides lower interest rates and requires sufficient home equity. This mainly requires using your home as collateral.
Power Purchase Agreements (PPAs): PPAs allow you to get solar panels installed at your home without paying any direct cash. It uses your property for installation and allows you buy the electricity generated by panels at a fixed cost, which is lower than the electricity rates.
Solar Leases: Solar leases allow you to rent solar panel equipment for a fixed monthly fee and enjoy its benefits by paying the initial expenses. It is similar to PPA, it means that you don’t own the panels.
GoGreen Home Energy Financing: Supported by the California State Treasurer’s Office, this program offers affordable financing to help homeowners and renters reduce energy use through home improvements, including solar installations.
Local Credit Union Programs: Institutions like California Coast Credit Union provide energy loans with rates as low as 3.98% APR, offering flexible financing options for solar projects.
👉6 Best Solar Panel Companies in California
What Impacts the Cost of Solar Panels in California: Main Factors
The cost of solar panels in California is affected by many factors such as:
Size of the System: Mainly the cost of installing solar panels depends on the size of the solar panels systems, which further depends on your energy consumption. If you install a 10kw system you will end up spending more than a 5 kw system. Although you will get higher tax rebates which will overall reduce the cost per watt.
Type and Quality of Equipment: As mentioned earlier the type and quality of solar panels you will install also impact the overall installation cost. Higher efficiency panels like PERC, and monocrystalline are more advanced in technology and efficiency. Hence, they cost more than others. Similarly, if you go for aesthetics, all-black panels increase the cost.
Location and Permitting: There are many rules and regulations for installing solar panels in California. If you want to install a panel you will need to get certain permits from local authorities. Also with the new, Active Solar Energy System Exclusion, you can enjoy the tax exclusion on the installation of solar panels on your property. But this rule also needs certain permits, which adds up to the cost.
Complexity of the Installation: The design and condition of your roof affect the installation cost of solar panels in California. If you have a complex rooftop layout with steep pitches, the labor charge can be further increased. If you are planning to install ground-mounted systems, you will need different types of mounting equipment that cost more.
Incentives and Rebates: California offers various incentives for solar panel installations like the 30% federal tax credits, NEM Net metering, additional rebates performance-based incentives, etc which further reduce the upfront cost.
👉How to compare solar panel quotes
How Much Do Solar Panels Cost in California: Actual Cost After Incentives and Rebates
The cost of solar panels in California is reduced by several tax rebates and incentives such as:
Federal Investment Tax Credit (ITC): The ITC allows homeowners to deduct 30% of the cost of installing a solar energy system from their federal taxes. The best part is that this credit applies to both homeowners and businesses. It plays a main role in reducing the cost of solar panel installation not only in California but throughout the USA. For example: If your solar installation costs $20,000, you could receive a $6,000 tax credit. You can learn in detail about Federal Investment Tax Credit for homeowners here.
Active Solar Energy System Property Tax Exclusion: In California, there is a value-added tax for each thing added to your property for example extra two rooms and so on. However, under Active Solar Energy System Exclusion, there is a tax exclusion in installing solar panels on your property until January 1, 2027. It means that they won’t increase your property taxes but will certainly increase the value of your property. It is mainly done to promote the usage of solar energy.
Local Utility Rebates: Some local utility companies in California also offer rebates to customers who install solar panels. For example, Pacific Gas and Electric Company (PG&E) provides many clean energy programs that offer incentives to those installing panels. However, the benefit of such a program may depend on your location in California. You can check with your local utility for incentives.
Net Energy Metering (NEM): Besides rebates/incentives, California has an NEM Program under which solar panel owners receive credits on their electricity bills for the excess electricity sent back to the grid on grid-tied systems. These credits will lower your energy bills and reduce your backpack period for solar panels.
👉Learn in detail about the California Solar Incentives here
A Brighter Future with Solar: What California Homeowners Can Expect
In conclusion, understanding the costs associated with solar panel installations in California is important for homeowners and businesses to consider this sustainable energy option.
While the initial investment can be high, various incentives and financing options are available to reduce expenses. By evaluating system sizes, equipment quality, and available rebates, individuals can make informed decisions that align with their energy needs and financial goals.
Three Tips to Help You Save on Solar Panel Costs:
Obtain Multiple Quotes: Comparing offers from different solar providers can help you find the best deal.
Consider Energy Efficiency Upgrades: Improving your home’s energy efficiency can reduce the size of the solar system you need, lowering overall costs.
Explore Local Incentives: Check with your local utility company for additional rebates or programs that can further reduce expenses.
FAQs on How Much Do Solar Panels Cost in California
How much do solar panels cost per square foot in California?
The per-square-foot cost of solar panels in California is between $20 to $40. However, it varies depending on the type of panel, installation complexity, and so on. On average, homeowners can expect to pay between $3 and $5 per watt for installing solar panels.
How much does a 4kW solar system cost in California?
A 4kW solar system in California will cost between $9,000 and $10,000 before incentives. After applying a 30% federal Investment Tax Credit (ITC), it will cost you between $6,300 and $7,000. The exact cost depends on the quality os panels and prices of the your installers.
How much do solar panels cost for a 2000-square-foot house in California?
For a 2,000-square-foot house, a typical solar installation would require a 4-6 kW system, which will cost between $12,000 and $15,000 before incentives. After applying a 30% tax credit, the price will be reduced from $8,400 to $10,500. As mentioned earlier, the actual cost still depends on the type of system and energy consumption.
Will the California government pay for solar panels?
The California government does not directly pay for solar panels but offers incentives like the federal ITC and property tax exclusions. Additionally, some local utility companies provide rebates to reduce upfront costs. Net Energy Metering (NEM) programs also help save on electricity bills.
Is solar worth it in California in 2024?
Yes, solar is worth it in California in 2024, with abundant sunlight, high electricity rates, and incentives like the ITC and NEM credits, solar systems often pay for themselves within 6 to 12 years. Homeowners can achieve long-term savings on energy bills and increase property value.
Which is the best solar company in California?
Several solar companies in California are highly rated, including SunPower, Tesla Energy, and Vivint Solar. The best company for you will depend on factors like pricing, customer reviews, warranty options, and installation expertise. Researching local installers is also beneficial. You can learn from retail about the 6 best solar panel installers in California here.
Can I run AC with a solar panel?
Yes, you can run an air conditioner with a solar panel system. However, the size of your solar array must match your energy consumption. For instance, a typical AC unit might require 1.5-3 kW of power, so ensuring your system has sufficient capacity is crucial.
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