What Does Rooftop Solar Cost In California?
Originally published on The ECOreport
Californians pay some of the highest electricity bills on the West Coast. As the sun is shining more than 240 days a year in most areas, this is also an ideal setting for solar energy. I went to a San Diego website called Solar to the People to find out what rooftop solar costs in California.
How Much Do You Lose Not Having Solar?
“We started the site to provide more information so that people can make more intelligent buying decisions. So we took the data from across the state and said on average, if you are a homeowner, what price would you expect to pay for solar panels,” said Ryan Willemsen, Founder and CEO of Solar to the People.
After using his site’s sample cost tool, I think this question should really be how much do you lose by not having solar?
“The best savings are pretty much always from a cash purchase, because you don’t have the cost of the loan interest over time,” said Willemsen.
Typing a San Diego address into its savings search engine, I found that even without incentives, the average installation should pay for itself in 8 years. Over the course of 20 years, owners who pay cash for their systems save about $26,780 over their typical utility bills. Even if they borrowed the money to pay for that system @ 5% interest, they would save $20,180.
“There are a lot of loan providers out there, and pretty low rates,” said Willemsen.
However, most homeowners still lease their systems. This means they don’t have any upfront costs, but their 20 year savings are only about $17,151. That’s almost $10,000 less than the homeowner that paid cash – $9,629 to be exact – and the system still belongs to someone else!
Now Add the ITC To This Equation
Solar to the People calculated that when you include the solar investment tax credit (ITC), the average Californian solar system is 5.5 kW and, after the incentives and tax credits have been taken off, costs about $18,675. Some of the lowest cost per installed kilowatt systems are in the Redding and Shasta/Cascades region, so they tend to be larger (6.7 kW) and more expensive ($20,698). People in the Central Coast tend to purchase systems that are 20% smaller and less expensive ($16.212) than average. San Diego is right in the middle, a 5.5 kW system for $18,580.
Though California’s three investor owned utilities (SDG&E, SCE and PG&E) have all tapped out their incentive programs, there are still additional programs for customers of the Los Angeles Department of Water and Power and Sacramento District Utility.
In addition to providing general information about solar systems, Solar To The People can also send would-be-buyers to installation companies.
“We have multiple providers and, if customers apply through us, we end up getting a commission. We encourage people to compare local providers. Look at a cost per kilowatt basis and really understand where the best deal is,” said Willemsen.
“We do well as a business if we are known as someone who can provide valuable information. So, although obviously we need to make money, we also want to drive solar forward, and at the end of the day I am not as concerned about whether they go through us or not.”
Photo Credits: (top) Solar Installation – Courtesy Baker Electric Solar; Jim from Sullivan Solar Power coming up to the roof – Courtesy Sullivan Solar Power;Screenshot from Solar to the People; Cost of Solar in California by Region – Solar to the People; Average cost of installing solar in California in 2015, after incentives, lowest to highest – Courtesy Solar To The People;A Baker Electric Solar installation – Courtesy Baker Electric Solar; Installation photo courtesy Sullivan Solar Power
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When I first looked into home solar options ten years ago average system was about $20,000. After constantly hearing about prices falling it’s still $20,000. How can that be explained?
The soft costs (profit) are still way too high. When you add up the fixed costs, i.e. panels, racking, wiring, inverter, etc., it is a small fraction of the total cost. That means that the installation “costs” are taking up the slack. This needs to be commoditized to include a reasonable profit.
get government out of the picture and the costs will be even lower.
Whatever we’re doing it’s not working because here in Palm Springs, less than 20% of roofs have panels. (If that, I’m reporting what I see when you fly over)
My wife and I own a home but like most, are at our spending limits for mortgage, taxes and constant maintenance of a 45 year old house.
We’ve determined that $12,000 could buy us an installed, state of the art 3500 watt (4.5 kw) system. Our lot is large enough to mount it on a pole, which is far better than putting all that hardware up on a 45 year old roof, that will need repair before 20 years is up.
Leasing a system is great because there are (almost) no headaches, except for taking it apart in 12 years to fix the roof and putting it back together (homeowner’s cost, read the fine print) but buying a system saves a bunch of money and none of the leasing companies have pole mounted systems. Why not?
Bottom line for us; Despite all the government ‘incentive’ interference the best way to do this is go to the store and buy what you need then get someone who knows what they’re doing to help you install it.
I self-installed, so the cost of government in my way was a huge percentage of the total cost. San Diego red tape added 6 weeks to my install and permitting was 20% of my total cost. Permitting would have been about 10% of total cost if a pro installed it.
As Deserttrek said, get government out of the way, and the consumer wins. I know that San Diego specifically is screwing the homeowner because they can. They raised permit cost 400% 3 years ago because so many permits were going through and they wanted to make money. My inspector called solar installs “their bread and butter.” That’s just wrong. The greenies here should be outraged, but they love government.
One can make a template out of these procedures to make it very efficient. Cities have standard guidelines already. The installers are charging you like it is their first time to go such a process and bill you for the whole thing when they were just using templates. They’re no different than lawyers that uses templates for divorce, bankruptcy and yet charge you for the total amount as if it were written from scratch when they just filled in your name for the already made documents that have been used thousand times over.
The soft costs remaining exorbitant is made up by solar installers to maximize the fleecing out of Americans!
You’re right that the pro installers charge a lot for the template that is not that complicated. The City of San Diego actually provides a good template and you simply have to replace a bunch of pages with your solar spec sheets, some drawings, wiring diagram, and ampacity table. Non-engineers may find this daunting, but there is a lot of information online to get this done correctly.
The leasing companies are the worst at fleecing Americans.
Good post except for the assumption that ‘greenies’ are for more government. Greenies are smart. Smart people understand how inefficient government bureaucracies are, no competition. And corrupt, with our money. But we need someone or something to police things or greed isolates us into groups that conflict and fight over power and resources. What to do? One thing, is to replace every retiring government employee with a computer, if it’s possible. Like solar, it’s a four or five year return on investment but after the equipment is up and running, it’s really cheap and effective.
Why do so many see this a black and white? Greenies “love” government and so must condone corruption and a for-profit mentality? Tea party wants no government so we can return to the wild west?
How about an efficient government with the best interests of the people they serve at heart? Yeah I know it’s never going to happen due to human nature, but that’s what I want to move closer to. I’m certainly no fan of high solar permit costs, nor am I a fan of no permit required so people end up doing dumb things and burning the neighborhood down. Balance, not black and white.
Of course you are right. There is an in between that we should shoot for. I’m venting my frustration a bit since my first hand experience dealing with government is universally bad (not just permits).
Since this site is run by left wing people I would like them to spend a bit more time talking about how government is getting in the way of progress. Almost nobody self-installs solar so they never see the government “tax” of installing solar. My inspector also told me that even though my first inspection was nearly perfect and far better than the pros, he had to come back and make sure that nothing was missed. He said they pay extra special attention to self-installers. Even the people at the permit office were so surprised that I was installing myself and did nothing to make it easier on me. It was clear to me that the system was setup to create a high barrier to entry as if the pro installers and government colluded to prevent competition.
Todd, there has been a lot of discussion about how inefficient permitting processes can make it harder to install solar which can drive up the price.
You do realize that permitting is a local issue, do you not? The federal government is not involved in issuing installation permits, that’s your local government’s job.
Now, if you’d like the federal government to do more to get out of the way then replace the Republican members of Congress with people who don’t work to support the fossil fuel industry.
There are good people on the right who want to see this country improve. Send some people to Congress who are willing to work with others in order to solve problems.
The country could use pragmatic problem solvers who look at the things that need to be fixed and help find the most effective ways to get the job done.
Ay Bob, yes I realize it’s a local issue, but it’s not only a problem in San Diego. And since it’s a local issue, why talk about Republicans in Congress as you do nearly every comment (at least to me)?
Each jurisdiction having it’s own regulations makes this super difficult. City of San Diego is actually the worst in the county. The county itself (if you live in unincorporated areas) doesn’t charge anything and allows online permitting! Perhaps progressive California should streamline the jurisdictions that are screwing homeowners. I like the idea of a single online clearinghouse for submission of plans. In my case, I had to make an appointment 5 weeks in advance, just to drop a stack of papers in a box at their office and leave. Then I had to go back after their ‘expert’s’ reviewed the paperwork, pick up my stack, get my permit, pay my several hundred dollar bill and start my install.
Why do I frequently bring up the problem of Republicans in Congress?
Very simple answer. They are screwing up the country.
We have problems. We need problem solvers and not people who refuse to do their jobs.
Lefties don’t love government. They recognize its necessity, and they want it to be as efficient and as non-intrusive as possible in order to meet its legitimate objectives, like a safe and reliable electric grid.
The problem is that government officials are elected with special interest money, and the result is that government serves those special interests not the public interest. It treats ordinary citizens with disdain.
Firstly, you can’t be comparing the same thing. Not unless someone is trying to take you for a ride. In some countries prices have not come down as far as others, but there is no where there hasn’t been a huge decline over 10 the past 10 years. Solar panels were $5 a watt in 2006 and now they are under $1 a watt for top notch 1st tier panels.
Also, you’re not in Australia. That’s a big mistake. It’s hard to believe how many people make it. Before tax or subsidy, the average cost of installing a 5 kilowatt system here is under $7,200 US. In Australia you can expect that to produce an average of around 20 kilowatt-hours a day depending on location, and most of the United States will be similar.
Since we’re not doing anything magic here and it’s a high wage country, the US should be able to do the same given a little practice and some red tape snipping.
Update: I should probably mention that by red tape snipping I mean getting rid of useless requirements and regulations. Useful regulations should be kept as they are part of how we got our costs down in Australia. But while we have standards and the installation must be signed of by a qualified installer, we don’t need permits or inspections here.
Right. Local government is the culprit in the U.S., not “big government.”
Probably because you’re shopping at the wrong places today. You shouldn’t be paying more that $2.10 per Watt today after applying the tax credit.
Known fact: SolarCity $5.10/Watt
While production costs of Solar PV have fallen below $0.50/Watt all over the planet.
Why do consumers keep falling for gimmicks? Saving thousands, even tens of thousands on solar is simple. Shop and compare.
They save a lot when they purchase a system but only save peanuts when they lease.