How To Get The Best Deal
Weve rounded up some bottom-line tips to ensure that you get the best deal possible on your solar panels. Its important to do your research before you commit. The cheapest option doesnt always have the best value.
Consider equipment. The equipment you choose will have a big impact on your electricity production. Sometimes smaller scale installers have a greater variety of equipment than national manufacturers. Weigh the cost of the equipment, financing options, and warranties. More expensive equipment doesnt always translate to higher ultimate savings.
Compare quotes. Always look into your options before making your decision. The U.S. Department of Energys National Renewable Energy Laboratory recommends that customers compare as many quotes as possible to get the best rate and avoid inflated prices. Many solar calculator quote tools are available for free online, including the quote tool below that connects you to installers in your area:
The Solar Installation Company
Solar energy is enjoying increased popularity, especially in leading states like California. There is now a wide range of installers to choose from, in most regions. Installation quotes vary quite a bit, so check with your local companies to get an idea of estimates in your area. Sometimes companies charge more because they invest in top-notch equipment, while other times, they spend more on advertising and promotional items, then transfer that cost to the customer.
Take your time researching local installers. You can also ask neighbors who have installed solar panels how happy they are with the job. Its recommended you ask multiple installers for quotes and to compare their reviews and equipment used.
Price of Installation Breakdown
Panels have a reputation for being costly, although they only make up about 34% of your total cost. The major investment is actually in labor and overhead costs.
As you compare quotes from installers, be sure to do plenty of research and talk to a variety of service providers in your area. This might take some time, but it could save you up to thousands of dollars on installation costs. Large-scale companies have a reputation because theyre already established, so they can charge more and not worry about competition from small-scale businesses. They also frequently charge more to cover their marketing and additional overhead expenses.
Should I Buy Or Lease Solar Panels In Southern California
When you put solar panels in your house, you can choose to buy or lease the system. When purchasing solar panels, you can pay in full or finance the system over a certain time period defined in your financing agreement.
Leasing is another alternative that may appear appealing because it lowers your initial costs and assures you are not liable for any future repairs. However, there are some disadvantages to ponder.
To begin with, you will not receive any of your investment back when you lease your equipment. While other homeowners will ultimately buy their systems altogether and be free of monthly payments, leasing implies that you will always have a cost. Furthermore, a leased solar system will not boost your homes market value. In fact, if you relocate, it may make it more difficult to sell your house since bidders would have to agree to assume your lease payments. Ultimately, homeowners who own their solar panels will save more energy in the long run than those who lease them.
However, if you are unable to purchase solar panels or if you rent your house, solar leases or solar PPAs may be a viable choice. Another option is to look into community solar options in your region.
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Choose The Right Solar System Type
The next decision is to choose the right solar power system type to match your goal.
There are three main types of solar installations:
- Grid-tied solar panel system
- Hybrid solar panel system
- Off-grid solar system
All of these system types have many features in common: they all involve solar panels, inverters, mounts, and wiring. There are, however, some crucial differences, and they can impact the projects cost and complexity. Heres a brief summary of each.
Grid-tied solar panel system
A grid-tied solar panel system is a solar setup that is connected to the grid and uses it as a battery through net metering. Grid-tied solar panel systems are usually smaller than the other types and have the lowest upfront cost.
Best for: Maximum financial savings
Pros: Lowest cost, simple design and installation
Cons: The system will shut off during a grid outage. Your system will need to pass inspection before it can be connected to the grid.
This video shows how a grid-tied solar system works for a typical home: https://www.youtube.com/embed/A5Wb61nEoZc?rel=0
Hybrid solar panel system
A hybrid solar panel system is also connected to the grid the key difference here is the inclusion of a battery storage solution.
As with a regular grid-tied system, a hybrid solar system can import and export power from the grid as needed. But a hybrid solar system can use the battery system for two additional uses: for backup power during a grid failure, and to take advantage of Time of Use arbitrage.
What Should You Know About Californias Solar Industry And Incentives
Though California enjoys one of the best climates for rooftop solar power in the U.S., it isnt just ample sunshine thats spurring the growth of renewable energy in the Golden State.
There are a number of California solar tax credit, exemption and rebate opportunities that make installing photovoltaic systems more affordable for residents and help the state produce more clean energy.
By taking early advantage of the economic and environmental benefits of solar, California has positioned itself as a leader in solar energy in the U.S.
Several of the nations top solar companies are based in California, and data from the Energy Information Administration shows that the state accounted for nearly 45% of the nations small-scale residential solar energy generation in 2019.
While the availability of products and quality installers adds to the ease of purchasing solar panels, what financial incentives are currently available for California residents interested in solar as a grid alternative? Lets explore.
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The Bottom Line: Are Solar Panels Worth It
Solar panels can be a beneficial investment for your home by saving you money long-term on the cost of electricity and increasing the value of your property. However, there are factors that you should consider before making the switch, including how much sunlight directly hits your house daily and the layout and direction of your roof. Residential solar systems in states that are, on average, sunnier will typically perform better, and south-, west- or southwest-facing roofs get more sun exposure.
You should also take a close look at your monthly electricity bill and compare it against your states average energy cost. Solar panels may be a good solution if you have consistently high payments or your cost is more expensive than in other areas of your state. On the other hand, you may not see enough cost savings to justify the expense of installing a home solar system if you have relatively low bills or can find ways to cut down electricity usage significantly.
Its also crucial to determine what incentives, if any, your state offers for solar energy, including a net metering program and tax credits. Remember that you can only take advantage of these incentives if you own your panels, either by paying for them outright or through a loan, so you need to consider whether your budget allows for a purchase rather than a lease. Fill out this online form to get quotes from top solar installers in your area.
How Do I Pay For Solar Panels
If your state doesnt offer solar rebates, you may still be eligible for state-issued Solar Renewable Energy Credits . Some states allow you to earn and sell credits for the electricity your solar system produces through a net metering program. And many states offer a solar investment tax credit or other similar incentives to help offset the total cost of your solar panel system and maximize savings on utility bills.
The federal government also offers a solar tax incentive. Created in 2005, the federal solar tax credit is available in all states, including those with no SRECs or state rebates. The 26% tax credit applies to solar energy systems installed by Dec. 31, 2022. The tax credit value for residential solar will decrease to 22% in 2023 and end the following year.
Although payment options vary, most solar companies offer at least two of the following choices: purchasing the residential solar panels outright, signing a solar lease or power purchase agreement or taking out a solar loan. Keep in mind that a solar lease or PPA will disqualify you from receiving the federal solar tax credit and state incentives since they apply only to the owners of the solar panels.
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Are Solar Panels Worth It In California In 2022
The table below shows the data extracted from a real life quote delivered through the SolarReviews marketplace recently for a fairly typical home in California.
As you can see the payback period is relatively short and equates to a much better return on investment than he historical returns that have been available from investing in things like shares or property.
Table 2: Cost, savings and payback period for an average residential solar system in California
What System Components Will I Need To Buy
Aside from the panels themselves, you need additional parts to build a complete solar power system. The essential components are:
- Solar panels, to capture energy from the sun
- An inverter, to convert that energy to a format that can power your appliances
- Racking, the foundation on which you mount your system
These are connected by smaller components like wiring, fuses, and disconnects. You can also add equipment to monitor your systems output online, which helps troubleshoot any issues with shading or defective equipment.
To eliminate guesswork, we offer several pre-sized packages with everything you need to get your system up and running.
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How Much Is The California Solar Tax Credit In 2022
Homeowners installing solar panels in California will receive a 26% tax credit on their purchase.
Its important to make a clarification here: there is no California-specific solar tax credit. When people refer to the California solar tax credit, they are actually referring to the federal solar tax credit, which applies to all American homes, including those in California.
The federal solar tax credit is 26% of the cost of a system until the end of 2022, and falls to 22% in 2023. Unless new federal legislation is introduced, the federal solar investment tax credit will be gone in 2024.
System Panels And Equipment
The cost of your system is also dependent on the number of panels you need and the type of panels you select.
The average home solar system is 5kW, although larger homes may require a 6kW system. Assuming your system uses 250-watt photovoltaic panels, that equates to approximately 20 panels per home, at the cost of roughly $11,000. Of course, prices increase from that starting point for larger systems requiring more panels.
Home solar systems also typically require an inverter. Most solar companies will design your solar system with these components included, but selecting specific inverters or batteries, such as a Tesla Powerwall, may increase your overall cost.
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What Is The Solar Panel Cost In Los Angeles
Los Angeles is a fantastic solar destination. SCE, or the Los Angeles Department of Water and Power, is most likely your service provider. Both utilities have high rates, which contribute to solar being a significant investment.
The federal tax credit of 26 percent is the most significant incentive for solar panels in Los Angeles. However, the tax credit is projected to be reduced to 22% by the end of the year. That means that the optimum time to go solar in Los Angeles is right now to optimize your savings.
California Solar Tax Incentives And Rebate Programs
There are also a handful of California solar incentives to help lower the cost of solar for residents. Some of these include rebates, loans and property tax exemptions. Though any quality solar company will be knowledgeable about the local incentives in your area, its always worth doing some independent research. We recommend using the DSIRE solar incentive database to find money-saving opportunities in your area.
ReadMore: California Solar Initiative
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Which Cities Have Better Solar Tax Exemptions And Rebates In California
California has different rebates and incentives from local authorities and providers depending on where you live. Sacramento offers a solar rebate of $300 to users who choose to install a new rooftop solar system. San Francisco offers a local rebate program on the use of solar energy through the GoSolarSF Initiative. Fresno is one of the many cities in California that offers HERO financing program for existing homeowners.
San Diegos Climate Action Plan is aggressive and ambitious. Over the past twenty years, it has been a state and national leader in solar roof installation according to the Environment California Research and Policy Center.
Federal Solar Tax Credit
All California residents are eligible for the federal solar investment tax credit, or ITC, for installing photovoltaic solar panels and any other eligible solar equipment. Any reputable solar installer will assist in the process of claiming the ITC on your federal tax returns. Claiming the ITC deducts 26% of the total cost of your solar installation from the taxes you owe.
To be eligible for the solar tax credit, homeowners must own the solar energy system, either having paid for it in cash or by taking out a solar loan. Homeowners who lease residential solar panels are not eligible to claim the ITC.
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Cost To Install Solar Panels In California By Location
Most people associate the installation of solar panels with their roofs, but this is not the only place you can install them. You can also install your panels on the ground if your roof is not large enough to hold the number of panels you need or it is facing the wrong direction for the panels to receive the most light.
This is known as a ground-mounted installation, meaning that a large rack or pole mount must be built and installed on the ground to hold the panels. Ground-mounted arrays are often used in off-grid installations because the number of necessary panels is too large for the roof to hold. Ground installations tend to be more costly than roof installations because you need to factor in the extra costs for the larger array.
|$17,800 – $22,260
History Of Solar Policy In California
California has taken significant steps to grow in-state solar: from reaching nearly 23 gigawatts of solar capacity across almost 900,000 solar installations to receiving in-state solar investments of $42 billion through 2018, California leads U.S. states in many solar categories. The states commitment to solar in the US is acutely apparent in SEIAs Top 10 Solar States list: notably, not even the next eight ranked states combined had installed as much solar energy capacity as California in 2018. The history of solar energy in the Golden State spans back to the industrys earliest roots and is a story of steady progress.
California first began promoting solar energy in 1976, when the state passed tax legislation to provide financial incentives for investment in the technology. Building upon this initial commitment solar, the state quickly passed the Solar Rights Act in 1978, which bars restrictions by homeowners associations on the installation of solar energy systems. The states commitment to the solar industry fostered an environment of growth that ultimately led to ARCO Solars 1980 completion of a 1 megawatt photovoltaic facility in Camarillo, an impressive capacity for solar at that time.
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How Much Do Solar Panels Cost
Solar panels generate free electricity, but there are still costs associated with installing them. Prices vary based on a few key factors: efficiency, capacity and your location.
After solar tax credits, the cost for a solar panel system on an average-size house in the U.S. ranges from $11,144 to $14,696, according to EnergySage. If you need a few panels for a small DIY project, expect to pay around $200 to $250 per panel .
Is The Investment Worth It
We have given you the ability to determine how much your own homes solar system would cost, whether solar panels are worth it or not is entirely up to you. Only you know what you can afford and how much solar savings would benefit your lifestyle.
In our opinion, if you live in California, investing in solar panels is one of the smartest decisions you can make!
Do you live in California and already own solar panels? Share your experience with the rest of us and let us know your thoughts on whether solar panels are worth buying in California or not.
We would love to read your feedback!
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