Solar Energy in Sacramento

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California has become a popular place for solar energy. More homeowners are making the change from traditional energy to solar panels each year. As the residential solar market grows, residents of Sacramento are realizing that solar has become a smart investment for their properties and financial futures.

What About Solar Energy in Sacramento?

Different areas in California have vastly different costs of living. What works in Los Angeles or San Diego may not make sense in Sacramento. When making a decision for your home, it’s important to consider the prices and statistics specifically in your area. To help homeowners in the Sacramento region, we’ve gathered data on the overall cost of installing solar energy in Sacramento.

The cost of solar in Sacramento varies slightly from the state averages:

6 KW

Average total system size in Sacramento

Compared to the state average of 5.5 kW, Sacramento homes install systems that are an average 10% larger.


Average total system cost in Sacramento

Compared to the state average ($18,675 for the total system cost), Sacramento solar power is 3.4% more expensive – this is due to the fact that larger systems are being installed in Sacramento.


Average cost per kW in Sacramento

Compared to the state average price of $3,395 per kW – homeowners installing solar in Sacramento are actually saving money on a per watt basis when compared to the rest of the state.

The Cost of Electricity Provided by Utility Companies in Sacramento 

Californians pay some of the highest prices for power provided by utility companies—ranking them the 8th most expensive state in the country, with an average cost of 17.74 cents per kWh in 2016!

While the prices in different regions in California may fluctuate from the state average, according to the Sacramento Municipal Utility District (SMUD) Sacramento’s prices are very close, generally between 16 to 19 cents per kWh.

SMUD’s Time of Use Plan Incentivizes Solar Panels in Sacramento

To help ease some of the high costs of electricity, starting in 2016, SMUD is offering a time of use plan, or “TOU” for customers who install solar on their homes. During off-peak hours between 9 p.m. to 9 a.m. Monday through Friday and on weekends, customers with solar panels in Sacramento can pay as little as 8.67 cents per kWh and 14.67 cents per kWh during peak hours (9 a.m. to 9 p.m. Monday through Friday).

Only during the high demand “Summer Super Peak” months between June 1 and September 30th do these prices rise. From 4 p.m. to 7 p.m. Monday through Friday, the price of electricity is 30.93 cents per kWh. By installing solar power in Sacramento, customers can save a lot of money by powering their homes with energy from the sun as opposed to expensive energy from the utility.  With solar power there is great potential for savings through SMUD’s TOU plan.


You may be wondering why you would still need to purchase energy from the utility if you have solar power on your home. Solar systems are sized to completely offset all or a majority of a home’s average energy consumption. However, regardless of the size of the system, the panels won’t be producing power at night. Homeowners will still be using electricity from their utility at night or anytime their panels are not producing enough power to cover their electrical needs. The benefit of a program like SMUD’s TOU plan is that the peak hours where any electricity used from the grid is most expensive, are also when your panels will be producing the most power, so it’s unlikely you will be needing a lot of energy from the grid.

For more detailed information on their TOU plan, visit SMUD’s Residential time-of-use rate FAQ page.

State and Federal Rebates & Incentives for Solar in Sacramento

Solar energy in Sacramento is also incentivized through federal and state programs intended to ease the cost of installing a system on your home. The following list covers the basics of how these rebates work:

Federal Renewable Investment Tax Credit

  • Homeowners can claim 30% of the cost of installing solar panels for their home on their taxes. This includes the price of labor and equipment.
  • This tax incentive will credit 30% of the installation costs until December 2019, then the credit will reduce to 26% for systems installed the following year, and then 22% until the program is set to expire December of 2021.

California Property Tax Incentive

  • While adding a solar system to your home will increase the overall property value, under this California tax incentive, solar installations are 100% exempt and will not increase your property tax
  • This incentive is in place until December 31, 2024
  • This incentive is non-transferable. When you sell your home, the new owner won’t be exempt for the solar system value

Net Metering

  • If you’re creating solar energy in Sacramento and you produce more electricity than you need to power your home, the surplus energy is distributed back to the power grid. When this happens, SMUD will reimburse you for the power you’re feeding back into the power lines.
  • At the end of your 12-month cycle, your total power contribution will be calculated. If you still have a surplue, you can choose to either have the surplus credits rolled over to the following billing cycle, or you can opt for a monetary payment.
  • Visit this page to watch an educational video breaking down the details on how net metering works

SMUD PV Residential Retrofit Buy-Down

  • If you use a certified contractor, (B, C-10, or C-46 contractors) SMUD will pay you $500 for installing a solar system at your home
  • If you use an approved and licensed contractor, your contractor will take care of the paperwork for your application.

In addition, depending on the type of home you’re considering installing solar on, and several other factors, you could be eligible for additional California solar rebates and incentives.

What the heck is a killowatt?

When it comes to home solar installations, people often speak in terms of KWs. KWs are kilowatts – essentially, for each KW in a system, the system could potentially produce 1000 watts per hour. Solar installations put on homes in NY in 2015 have averaged roughly 7 KWs. So to get a rough idea of the price of a solar installation in your region for an “average” home, you could multiply the number to the left by 7. For a more accurate estimate, try using our solar calculator.

Is Solar Energy Right for Sacramento?

Even if the price of installation is right, are solar panels in Sacramento an investment that will pay off?

Based on the National Renewable Energy Laboratory’s solar resource map, on average, Sacramento receives enough sunlight to produce  5.5 to 6 kWh (or more) of electricity per day. This is the 3rd highest amount of sunlight production potential nation-wide, meaning that Sacramento is an excellent location for solar power.

This information is essential when deciding if solar power in Sacramento is worth the investment. More sunlight will mean more power produced, more power for your home, and potentially, more money in your pocket.

Additionally, SMUD has consistently championed solar power in Sacramento. As a utility that is leading the way for others in the residential solar market, they offer financial incentives, information, and support to their customers. California is one of the sunniest places in the country and Sacramento in particular has a lot to offer homeowners who decide to switch to solar.

More info on solar in your area

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