An extensive guide regarding solar power systems for residential areas in California
California is currently the leader in solar power in the U.S., and it’s well ahead of its competitors. That can be attributed to the state’s Renewable Portfolio Standards, unique solar legislation, and largest cash-back homeowner incentives. California is also home to the world’s largest solar thermal power plant, the 392 MW Ivanpah Solar Power Facility. With California also having sun-soaked days most of the year, the state has optimal solar power conditions.
Here are the things you should know before going solar:
The Price of Electricity in California
California is known for its notorious electricity prices. It’s among the top five states with the highest electricity rate in the nation. While the U.S. average electricity rate is 12.8 cents per kWh, Californians pay 20.45 cents per kWh. That means Californians pay almost 60% more for the same amount of energy consumed. The high electricity costs often prompt residents and business owners in California to go solar, which allows them to save money and reduce environmental damage.
Residential Rebates and Incentives
Aside from the money you save by generating your electricity and reducing the overall carbon emissions from conventional power plants, there are other things that you can enjoy if you get solar in California. These perks make getting solar much more valuable than it already is. Here are some of the top solar incentives in California:
Local solar rebates
Many areas in the Golden State offer local rebate programs to residents. These rebates can pay residents with solar systems anywhere from $500 to $0.95 per watt of installed capacity.
Solar Incentives for Low-Income Households
Generally, solar energy is more used in areas with high average incomes, even though low-income neighborhoods can benefit more from solar power. To address this issue, solar incentives for low-income households encourage solar development in such communities.
California’s main low-income solar programs:
Single-Family Affordable Solar Homes (SASH) Program
The California Solar Initiative (CSI) has a SASH Program that gives incentives to qualified single-family households with the goals of:
- Decreasing electricity usage and reducing energy bills with the use of solar installations without increasing monthly expenses
- Providing complete and partial incentives for low-income participants with solar systems
- Offering the benefits of solar power and energy efficiency
- Decreasing the cost of owning solar systems with a higher incentive than the General CSI Program
- Developing environmentally and economically sustainable energy solutions
- Providing training and employment opportunities in the solar energy and energy efficiency industries.
The SASH Program provides fixed, upfront, capacity-based incentives to counteract a solar system’s upfront cost.
- To be eligible for the program, the applicant must:
- Receive electrical service from PG&E, SCE, or SDG&E
- Live in their own home
- Have a household income that is 80% or lower than the area median income (AMI)
- Live in a home defined as “affordable housing” as per California Public Utilities Code 2852.
Multifamily Affordable Solar Housing (MASH) Program
The MASH Program is generally similar to the SASH Program, but it is intended to provide solar incentives on qualified, affordable housing multifamily dwellings. To learn more about the MASH Program, visit California Public Utilities Commission.
There is a law that allows utility customers with solar, wind, biogas, and fuel cell generation systems to receive financial credit on their electricity bills for any excess energy they send back to the grid in California. Participation in the NEM doesn’t limit a customer-generator from enjoying other rebates, incentives, or credits provided by an electric utility.
Renewables Portfolio Standards (RPS)
Established in 2002 by Senate Bill (S.B.) 1078, California’s RPS program requires 20% of all retail electricity sales to be served by renewable energy sources by 2017. In 2015, the program was expedited by SB 350, which mandated a 50% RPS in the state by 2030. SB 350 also stated that 65% of the RPS procurement to be acquired from long-term contracts of at least ten years. The program was further accelerated in 2018 with the SB 100, which increases the target RPS to be 60% by 2030. It requires all of California’s electricity to be derived from carbon-free resources by 2045.
Cost of Solar Installation in California
Now, let’s discuss how much it would cost if you were to get solar for your home in California. If you’re still not convinced whether you should get one, read more about it here.
As of March 2021, the typical 5kW solar installation in California ranges from $12,410 to $16,790. That gives an average gross price of $14,600, or $2.92 per watt. That is, before deducting the 26% Federal Investment Tax Credit (ITC) and other state and local solar incentives. Upon accounting for these, the net cost you’ll have to pay will be reduced by thousands of dollars. The net cost averages $10,804. But this amount may vary in different areas of the state. You can look at SolarReviews’ graph to check the average cost in your area in this link.
Average Payback Period and Savings in 25 Years
The average payback period (APP) and savings determine whether getting solar is worth the investment. But no matter how you look at it, a solar system will always recoup its cost after a few years. It’s just a matter of when. The APP for solar in the U.S. is about eight years. However, being blessed with great weather, California has a shorter APP with only around six years, making solar here even better. With a shorter APP, you can also get more savings in the long run. In San Jose, you can save $49,205 in 25 years. But that amount may reach up to $95,412 if you live in San Diego. Again, it may vary depending on your location in the state.
Solar Financing Options
Solar installations come with a high upfront cost that becomes a barrier to many. But if you’re willing to get one and do some research, there are several ways in which you can finance your solar system easier. These are the following:
A solar loan is a loan that offers a way for homeowners to afford a solar panel system without paying the enormous upfront cost. Solar loans are available in different payment structures, terms, and rates. Many solar loan providers offer zero-down payment loans and options to pay a loan earlier with no penalty. What’s nice about solar loans is that you use your electric bill savings to pay for the monthly payment. But even if solar loans are convenient, you will get lower financial returns than if you buy a solar panel system with cash.
A solar lease is the rental of a system from a solar energy company. The installation cost will be generally paid for by the company, and you will have to pay them a monthly or annual fee.
Solar Power Purchase Agreement (PPA) is an agreement between you and a company that will install a solar panel system on your home. But instead of paying for the equipment, you will purchase the power generated by the system over a set period at a discounted, predetermined rate.
There you have it! You now know what you need to power your home with solar energy. All that’s left is for you to decide to get one! And we can help you with that. Yorkshire Roofing has been in business since 1988, and we know well the tricks of the trade. Our experience and dedication to quality service are what we leave on each roof we work with.
There’s no better time for a solar installation than today, so don’t miss out. Call us at (800) 794-7444, and let’s get started.