Are solar panels worth it in California in 2025?
California combines some of the highest residential electric rates in the U.S. with strong sun exposure across most ZIP codes. That’s why many homeowners still see meaningful utility savings with rooftop solar—especially when systems are right‑sized for their usage and paired with smart rate planning. Under modern export rules (often called “NEM 3.0”), credits for excess daytime solar are time‑dependent and typically lower than full retail, so design and equipment choices matter more than ever.
How we estimate your costs and savings (plain‑English math)
- System cost: $SystemCost = CostPerWatt × (1000 × kW)
- Net cost (with ITC): $NetCost = SystemCost × 0.70 (applies the 30% federal tax credit to eligible costs)
- Annual production: $AnnualKWh ≈ kW × 365 × SunHours × 0.8 (typical system losses)
- Annual savings: $AnnualSavings ≈ AnnualKWh × LocalRate (adjusted by export/TOU behavior)
- Payback: $Payback ≈ NetCost ÷ AnnualSavings
We keep these assumptions conservative and show you the inputs for your ZIP, then you can compare them against 2–3 real quotes from vetted installers.
Cost of solar in California (2025): $/W, system size and net cost
Most homes fall in the 5–10 kW range, but the “right” size depends on usage, roof layout, shading and your utility rate plan. The most reliable way to compare proposals is by “dollars per watt” ($/W), alongside the bill of materials (panel and inverter models, battery brand/capacity) and workmanship warranty. Your net price typically reflects the 30% federal ITC and any available utility programs.
NEM 3.0 and export rates in California—what it means for savings
Under NEM 3.0–style policies, exported kWh are credited at time‑varying export rates (not full retail). Three practical implications:
- Right‑sizing: Oversizing purely for exports is rarely optimal; sizing for daytime usage and strategic evening coverage works better.
- Battery value: Batteries can shift surplus solar from afternoon to evening TOU peaks, improving self‑consumption and outage resilience.
- Rate selection: Pair your design with a compatible TOU plan; your installer should model the proposed plan in their quote.
California incentives and SGIP battery rebate
In addition to the 30% federal tax credit, California’s Self‑Generation Incentive Program (SGIP) provides incentives for eligible home batteries, with enhanced levels for equity/resilience projects. Availability and amounts change over time. We’ll point you to official program pages and your utility’s resources so you can confirm eligibility and current funding before you sign.
Solar + battery in California (Powerwall, Enphase, FranklinWH)
Batteries serve two roles: backup power during outages and bill optimization under TOU/export rates. Common options include Tesla Powerwall, Enphase IQ Battery and FranklinWH. Compare battery capacity, surge power, app/monitoring and warranty terms (typ. 10–15 years with throughput/cycle limits). Your quotes should list brand, model and coverage in plain English.
How to compare quotes in California’s market (checklist)
- Equipment: panel brand/model (25‑year product/performance), inverter type (MLPE vs. string), battery brand/capacity and warranty.
- Workmanship warranty: term (often 10–25 years) and roof/penetration coverage.
- Price & financing: cash vs. loan vs. lease/PPA; APR, dealer fees, prepayment rules, escalators.
- TOU/export modeling: proposed rate plan and production/consumption assumptions (day/night balance).
- Permits & interconnection: timelines, inspection steps, any interconnection fees.
- Credentials: active licenses, insurance, NABCEP staff, local references.
Regional notes: Los Angeles, San Diego, Bay Area & Sacramento
- Los Angeles: Dense shading and complex roofs are common—expect MLPE (module‑level) designs and careful right‑sizing.
- San Diego: Strong sun; many projects add batteries for evening TOU peaks and outage backup.
- Bay Area: Higher rates make optimization important; ask for TOU simulations with and without a battery.
- Sacramento & Central Valley: Good insolation and simpler roof planes; heat waves highlight the value of storage.
Getting started—no obligation
Enter your ZIP to see a localized cost range, incentives and a conservative payback window. Then compare 2–3 quotes from vetted installers who actually work in your area. Clear equipment lists, warranty terms and TOU/export modeling are included so you can decide with confidence.