Is Solar Worth It in California?

5 factors to consider before getting solar panels in California

Going solar ends up being worth it for many homeowners as long as their house is a good candidate to support a solar panel installation. Here’s what to think about before you commit.

1. Solar panel installation costs
2. Potential savings
3. Changing solar policies
4. Roof condition
5. Future goals

1. Solar panel installation costs

Before any incentives, a typical residential solar installation in California cost$21,042. That doesn’t include the cost of a solar battery, which can add $7,000 to $18,000 to your total system costs.

System size is another big solar cost factor. A typical California household needs a 8.35 kW system to offset its electricity needs with solar energy. You might need a larger or smaller system, depending on your current energy consumption.

Average solar panel costs by system size in California

2. Potential savings

Look at your most recent utility bills to see how much electricity your house needs each month. Once you know your current energy consumption, you can calculate your potential savings and the time it should take for your solar installation to pay for itself. Use NLR’s PVWatts Calculator to estimate how much electricity a solar panel system can produce over a year on your house.

Anecdotally, Maggie in Antioch said her power bills went from $350 or more to “under $25 almost every month,” and Jeffrey in Pasadena said he doesn’t pay for electricity at all.

Chad in Lake Forest still pays about $110 each month for electricity. “It’s better than an average of $400 a month, but I was expecting zero after getting extra panels,” he told us.

Going solar now also protects you from future energy price increases. Dick in Irvine put it this way: “In the future, electric rates will probably go up steadily. So, it locks me in at a fixed rate for that period of time. But as a consumer, I still have to buy the equipment upfront.”

Your utility matters

Where you live can affect how much solar saves you. PG&E, Southern California Edison and SDG&E use different solar rate structures and time-of-use plans, which charge different prices depending on when you use electricity.

That means two California homeowners with similar solar systems can see different savings. Your utility, rate plan and daily energy-use habits all matter.

3. Changing solar policies

California has scaled back some of its support for rooftop solar in recent years, which has made the economics somewhat less favorable for many homeowners. The state has no solar tax credit, and the federal residential credit expired at the end of 2025.

Still, some homeowners can save through local rebates, battery incentives and programs like DAC-SASH for qualifying lower-income households.

What to know about net metering in California

Net metering gives you credit for extra solar power you send to the grid. For most systems connected since April 15, 2023, California uses the Net Billing Tariff, also called NEM 3.0 or the Solar Billing Plan.

Under the Solar Billing Plan, the energy you use at home replaces electricity you would otherwise buy from your utility. Any extra power you send to the grid earns credits, but those credits are usually worth less than the retail electricity rate.

That makes when you use electricity more important. Solar Billing Plan customers are on time-of-use plans, which charge more during peak hours and less at other times. Using electricity while your panels are producing — or shifting some usage to cheaper hours — can improve your savings.

For example, Southern California Edison and SDG&E have peak periods from 4 to 9 p.m. on their solar time-of-use plans. Solar production is usually falling during those hours, so a battery can store excess daytime power for use later, when grid electricity is more expensive.

Advice for homeowners

Steve Marcou, Vice President of Marketing at SolarTech, offered some advice for homeowners going solar in California:

• Consider a battery: Solar panels plus battery storage as an integrated system can maximize energy independence and financial returns. The biggest downside is that solar storage batteries cost $7,000 to $18,000. Matt in San Jose went this route, pairing their solar installation with “2 batteries, a main electrical panel upgrade, and an EV charger” — a setup that reflects the kind of integrated approach experts now recommend under NEM 3.0.

• Compare quotes: When getting quotes, insist on a comparative analysis that clearly shows projected savings with and without a battery under the current Net Billing Tariff rules.

• Understand your usage: Knowing your household’s energy consumption patterns and potential future changes to those patterns will help determine the optimal battery size to offset the most expensive grid electricity.

» MORE:Solar incentives in California

4. Condition of your roof

Solar panels need regular exposure to sunlight to produce the most energy possible. California averages 5 to 7.5 peak sun hours each day. However, lots of shading from trees or tall buildings could make your solar energy system less efficient than your neighbor’s.

California (and the rest of the United States) is in the northern hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch. If the only place you can install is a north-facing roof with a 30-degree pitch, your costs will likely go up by 30% to 40%.

Do you need a new roof?

Another important consideration: If you have to replace your roof, do that before you install solar panels. Otherwise, it could cost thousands to remove the panels, fix your roof and reinstall the panels.

This is a real risk during installation, too. Derek in Santa Maria noted that their installer “broke a lot of tiles on the roof,” though they added that the company “came and took care of it.” 

Kathleen in San Jacinto had a similar experience: “When they came to install them, they broke a couple tiles on the roof. Once I realized that, I called them, and they came out and replaced them for me.” Checking your installer’s process for handling roof damage upfront can save you headaches later.

5. Future goals

Buying solar equipment is expensive, and it takes Californians about 9 years to recover the initial investment through savings on electric bills. If you sell your house and move before then, you might not fully realize the financial benefits of your solar panels.

It’s true that solar panels can increase the value of your home. But they can also complicate a sale. This is especially true if you lease your system, since the buyer may need to take over the contract.

If you think you’ll move in the next couple of years, you may want to consider a home improvement project with a better return on investment, like a kitchen or bathroom remodel.

How to pay for solar panels

If you pay upfront, you own the system from day one, and don’t have to pay interest on a loan. Of course, paying cash is not always an option. That’s when loans, leases and other agreements come into play.

• Solar loans work like any other type of home improvement loan. There’s an application and approval process. You pay it back over time (with interest) each month.

• Leasing solar panels lets you set up a system without the high upfront costs. Monthly payments usually range $150 to $250. Agreements last 20 to 25 years.

• Power purchase agreementsare similar to leases. Instead of owning the panels, you agree to buy the electricity they produce at a set rate. The solar company owns and maintains the system, usually under a contract lasting 10 to 25 years.

» SOLAR PANELS: Lease vs. buy?

Pros and cons of solar panels in California

California is a pro-solar state in terms of both regulations and economics. The sunny climate maximizes the amount of power produced by solar panels. Still, you can expect some seasonal fluctuation in how much energy your panels produce.

» MORE: Solar energy pros and cons

Find solar companies in California

People have had mixed experiences with solar companies. In the best-case scenario, it’s easy to make the switch and you’re happy with the system’s performance. In the worst-case scenario, you end up paying thousands for mid-tier solar equipment from a company with poor customer service and no follow-up or support. Read our guide to the top solar companies in California for more information.

California solar FAQs

Bottom line: Is going solar in California worth it for you?

The main drawback is the high upfront cost of purchasing and installing the panels and equipment. On the bright side, once that’s paid for, solar panels can significantly reduce or even eliminate your electricity bills. For many, the long-term savings outweigh the upfront costs.

Solar costs vs. savings in California vs. nearby states