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California Solar – Leading the US Solar Market

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California leads the U.S. as the number one state for residential and commercial solar installations. With an abundance of sunny days and favorable solar energy policies, it’s easy to understand why California’s solar energy market is thriving.

Energy Costs in California Continue to Increase

  • It costs 17.21 cents per kilowatt hour for electricity in California
  • The national average cost of electricity is 12.93 per kilowatt hour  
  • There’s enough solar in the state to power 2,891,000 homes
  • Average savings over the lifetime of a solar system: $3,000 – $20,000

The cost of energy in California has risen by 4.71 cents per kilowatt hour over the past decade.  Since residents are already paying electric bills that are 33% higher than the country’s average, the opportunity for savings with solar power is remarkable. Currently in California, electricity is priced at 17.21 cents per kilowatt hour. Solar panels will bring that price down significantly, even if a homeowner uses a loan or leasing options to install. When it comes to the savings you can harness by installing solar panels, it depends not only on how much energy your panels can produce, but also on your cost of electricity to begin with. Homeowners who have the highest energy costs before installing solar will see some of the biggest rewards from the amount they end up saving on electricity.

Why are so Many Californians Switching to Solar?

  • California residents pay 33% more for electricity than the national average
  • The cost of energy in California has increased by .26 cents since 2014, and the rate of rising prices shows no signs of slowing
  • The abundance of sunshine makes California the perfect place to take advantage of solar power
  • California leads the country with their supportive policies and incentive programs
  • The solar industry in California is responsible for the creation of 54,700 jobs – the highest in the U.S.

Enough Solar Was Installed to Power

1,049,000

homes in California in 2015

California Electricity Prices are

33%

higher than the rest of the country

The Price of Electricity in CA has Increased

26 cents 

per kwh since June 2015!

Homeowners Can Save up to

$20,000

over the lifetime of the solar system!

Incentives and Rebates Available to California Homeowners

In an effort to encourage a transition to a solar California, the federal, state, and local governments are offering several enticing incentives such as tax credits and rebates. The following are the basic programs that are available to homeowners in California. Depending on the city and utility, it’s likely that there are additional incentives available for your property.

Federal Incentives: 

  • Residential Renewable Energy Tax Credit: a taxpayer can claim up to 30% of the cost related to installing solar system for a residential property.
  • Residential Energy Conservation Subsidy Exclusion: this personal tax exemption will not tax100% of solar installation subsidies.

State Incentives:

  • Net Metering: through net metering, you get paid for the excess energy that your solar panels provide back into the grid. Once your home is powered, your clean energy helps to cut down on pollution while putting money back in your pocket!
  • Property Tax Exclusion for Solar Energy Systems: deduct 100% of the value of your solar system from your property tax.
  • CEC – New Solar Homes Partnership: by incentivizing solar installation in new construction, California hopes to grow the solar industry in tandem with their ever-growing population. Incentives are based on housing type as well as the expected energy production levels.
  • California Solar Initiative – Single-Family Affordable Solar Housing (SASH) Program: similar to the MASH program, SASH aims to help low-income households afford solar systems.
  • California Solar Initiative – Multi-Family Affordable Solar Housing (MASH) Program: with incentive amounts based on expected energy production, this rebate program is designed to encourage low-income multi-family homes to convert to solar.

The Cost of Solar Panels in California

Solar prices have dropped 30% since 2007, the average price of an installed solar system is currently between $20,000 – $30,000 before rebates and incentives. It’s important to keep in mind that this is only for a purchased system. If you are financing your system with a loan, lease or power purchase agreement, you will not need anywhere near that sort of initial investment. The cost to purchase your system may seem steep, however the available incentives and rebates have a significant impact on the actual price you will pay.

Prices Continue to Fall

The cost of solar in California has decreased an additional 4% in this last year alone. This is due to a variety of factors such as: new developments in the technology to produce and install panels, decreased price of materials which contribute to lower overall costs and significantly shorter installation times. As the industry expands and as new advancements are made with this technology, we can expect to see prices continue to decrease over time.

Solar Industry Growth in California

chart_growth

California has been a strong supporter of the solar industry, leading the country as the number one state for solar installations. The amount of residential systems has steadily increased and there is now enough solar energy to power over 2.8 million homes!

Why is the Solar Industry so Successful in California?

More than almost any other state, California knows solar. CA has been actively cultivating solar technologies for over 30 years and this tradition of clean energy innovation continues today. From PG&E’s first grid-supported photovoltaic system in Kerman in 1993 to the 10,695 MW powering 2,891,000 homes today, solar energy in California is flourishing.

Incentives for A Growing Industry 

In 2006, Governor Schwarzenegger announced his plan for a “Million Solar Roofs” in California. This vision led to the creation of the California Solar Initiative (CSI). This rebate program was the first of its kind, with the goal of promoting solar installations by rewarding consumers with monetary rewards based on the size of their system. The rebates were distributed   through a tiered rewards system to stretch the allocated budget for the program – as each solar installation goal was met, the rebate amount would drop down to the next tier. When the CSI program came to a close, there was some uncertainty and concern about the future of solar in California. However, it has not negatively affected the solar market in the state.

As time has shown, the solar industry hasn’t slowed—in fact, solar energy in California is bigger and better than it’s ever been.

The CSI provided the necessary support the solar market in California needed, which allowed the technology to take off throughout the state and has continued to grow even after this financial incentive program ended. California’s Solar Initiative fulfilled it’s goal of providing a boost to the solar market in California. Thanks to the CSI program, California has set an important example for the rest of the country by showing how a temporary program can successfully lay the ground work to allow the solar market to develop and mature.

How Can You Finance Your Solar Installation?

Solar power isn’t new to California, however there have been recent developments in the financing options available to homeowners. For many Californians this means they can now afford to produce their own, clean energy without having to foot an expensive upfront bill. As energy prices continue to rise and solar becomes increasingly affordable, California solar energy is a smart choice for the environment and your wallet. There are four main ways you could finance your home solar system:

  • Cash Purchase: buy the panels and solar system outright. This may be the most expensive initially, but the incentives, rebates and possible net metering options are immediately available.
  • Solar Loan: with a loan for solar installation, the solar photovoltaic system will eventually be yours. This may be a good option for if the money saved on energy is less than the price of loan repayment.
  • Solar Lease: this is great option for someone not interested in long term maintenance of a solar installation but wants the benefits of cleaner, less expensive energy. Like leasing a car, the panel ownership will remain with the solar company, but so does the responsibility for upkeep and repairs.
  • Power Purchase Agreements (PPAs): pay only for the power your solar panels produce rather than the system.

California is One of the Best States for Solar Power

To make the right decision about solar in California, homeowners need to know what makes solar work and in what conditions panels are profitable. Solar Insolation is the measure of how much energy from the sun a particular area receives. When it comes to deciding which areas are the best for solar, this is an important consideration. Thankfully, California is known for its’ abundance of sunny days, making most homes perfect for solar power! California receives 6 to 6.5 kilowatts of energy from the sun per hour, which is at the high end of the solar insolation range. Since California generally has clearest, sunniest weather in the country, more sunlight is available to be converted into solar energy. This means that solar panels installed on a home in California will be able to produce more power than panels on a home in Seattle.

Learn More About Solar in Your City

We’ve put together guides highlighting the important details about going solar in cities throughout California, and are always adding new cities:

Solar in Los Angeles
Solar in San Diego
Solar in Sacramento
Solar in Palm Springs and Palm Desert
Solar in Pasadena
Solar in Santa Barbara

Solar in Glendale 

Solar in Anaheim

Solar in Chula Vista

Solar in Escondido

See How Much Your Home Could Save with Solar

Residential solar power is a no-brainer in California! Electricity prices across the state are steadily rising with no end in sight. By switching to solar power you can allow your home to start working for you. To see how much you can truly save with a solar installation, get competitive quotes from our qualified installers in your neighborhood. To get an estimate on how much you could save and how much a solar system would cost, enter your monthly utility bill into our solar calculator.

See how much you could save with solar power


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