Going Solar in California in 2024: Costs, Regulations & Incentives
Historically, California has been one of the best states in the country for solar power generation, but the landscape has changed.
In light of recent laws, regulations, and policy changes, you may be wondering if installing solar is still a good idea or if it will ever pay off for your home and property.
In this blog, we’ll explore the ins and outs of going solar in California in 2024 and provide all the information you need to decide if solar is right for you.
Key Takeaways
Despite NEM 3.0, the benefits of going solar in California outweigh the cons. Perks include savings on your utility bill, environmentally friendly power, greater access to energy independence, and the potential for capturing financial incentives and rebates.
To choose the right solar installer for your needs, we recommend: research installers, check licenses, insurance, and certifications, consider experience and expertise, compare quotes, assess the company’s warranty and support, understand available payment options, and ensure the installer is self-performing (i.e. not using subcontractors).
If you’re curious whether you’re a good candidate for solar installation, contact Sandbar Solar & Electric to learn more about the process.
How is Solar Changing in California in 2024?
One of the most significant changes that have impacted the solar industry recently is the introduction of NEM 3.0.NEM 3.0, or Net Energy Metering 3.0, is the latest version of California's policy that governs how solar energy producers are compensated for the electricity they add to the grid.
Unfortunately, NEM 3.0 cut solar credits from their previous levels and reduced customers’ access to utility-provided solar credits. Learn more about the program here.
NEM 3.0 is just one of a slew of recent legislative moves that have changed the rates customers receive for the excess solar energy they produce (i.e. energy exported to the grid).
So, Should You Go Solar in California in 2024?
Are you considering adding a solar array to your property this year? Despite the introduction of NEM 3.0, adding solar power to your property still makes sense.
Here’s what you need to know:
Pros:
New Solar Solution for NEM 3.0: By adding a small battery, solar customers can minimize their exported daytime solar and reduce energy purchased during “Peak Hours” to maximize overall savings ROI.
High Solar Potential: California's sunny climate offers high solar potential, allowing for efficient energy generation.
Financial Incentives: Federal and state incentives, including tax credits and rebates, can help lower the upfront costs.
Energy Independence: When paired with battery backup, solar panels can provide energy self-sufficiency, reducing reliance on the grid.
Environmentally Friendly: Solar energy is renewable and reduces carbon footprint, aligning with California's environmental goals.
Potential Savings: Over time, the reduction in energy bills can lead to significant savings.
Cons:
High Initial Cost: Depending on how much energy your house requires, the upfront cost of purchasing and installing solar panels can be significant.
Varying Energy Production: Solar energy production varies with weather and time of day. Therefore, maintaining a grid connection and potentially adding batteries will create the most reliable system.
Maintenance and Repair: Although generally low, maintenance and repair costs should be considered.
Space Requirements: Adequate roof space (or a sunny location on the ground) with the right orientation is necessary for solar installation. If you plan to add batteries, additional space, away from windows and doors, will be required.
Reduced Solar Credits: With the recent passage of NEM 3.0, people aren’t getting as much compensation for the solar energy they sell back to the grid. This adds approximately 2-3 years to the average payback period.
While there are a few factors to consider before you go solar, installing solar panels is still an excellent investment, whether you want to save money on your utility bills or increase your home’s energy independence.
How Much Do Solar Panels Cost in California?
Currently, the average cost of solar panels in California ranges from $10,000 to $13,000 after the 30% federal solar tax credit.
Additionally, the average solar payback period in California is about eight years for residents who pay for their systems upfront.
That said, there’s no one-size-fits-all rule.
The final cost of a residential solar panel system can vary significantly based on several factors. These include…
The size and quality of the solar panel system.
The solar company you choose.
The type of equipment used.
Your property's specific attributes, such as the roof condition and angle.
It's also worth mentioning that while the upfront cost may seem substantial, the return on investment over time can be significant due to the reduction in energy bills.
Additionally, there are multiple federal and state-specific incentives and rebate programs that can further reduce the net cost of going solar (more on these in a second).
Lastly, many solar companies offer financing options, such as solar loans to make solar panels more affordable. With a solar loan, you can spread out the cost of the system over many years.
California Solar Programs & Incentives
Here are a few state-level incentives you should know about:
Self-Generation Incentive Program (SGIP): SGIP provides incentives to support existing, new, and emerging distributed energy resources. Learn more here.
Net Energy Metering (NEM): An agreement that allows solar panel owners to sell excess power back to the utility company for a credit. Learn more about the current iteration of the NEM program, NEM 3.0, in our comprehensive blog on the topic.
There are also various federal incentives to choose from, including the following:
Federal Solar Investment Tax Credit (ITC): This program offers a reduction on income tax equal to 30% of the cost of solar panel systems installed in 2024. Learn more about the ITC here.
Multifamily Affordable Solar Housing (MASH): A program that provides incentives to install solar in affordable housing complexes. Learn more about the MASH program here.
Property-Assessed Clean Energy (PACE) Financing: PACE financing allows homeowners and commercial property owners to finance their solar systems and pay it back through their property taxes. Learn more here.
Remember to check with local authorities and utility providers for the most up-to-date information on solar incentives.
Current Laws & Regulations That Impact Solar in California
If you want to install solar panels in California, you’ll need to navigate relevant solar laws and regulations, including California’s Solar Mandate.
The California Solar Mandate, officially known as Title 24, Part 6 of California’s Building Energy Efficiency Standards, is a landmark policy enacted by the California Energy Commission (CEC).
It requires all newly constructed residential buildings in the state to have solar photovoltaic (PV) systems as of January 1, 2020. The mandate applies to single-family homes and multifamily residences up to three stories high.
This regulation aims to increase the use of clean energy solutions and reduce the carbon footprint of the residential sector.
The solar mandate is a significant part of California's broader environmental and energy efficiency goals, which target net-zero energy usage for all new homes and commercial buildings in the coming years.
Homeowners have several options to comply with this mandate. They can install a solar PV system on their roofs or share a solar power system with a group of homes.
Alternatively, they can subscribe to a community-shared solar system or purchase renewable energy credits.
Notably, there are a few exceptions to the solar mandate: specifically, the mandate may not apply to properties with roofs that are too small for solar panels or those that receive too much shade to support a PV system.
If you have questions about the CA Solar Mandate, we recommend that you reach out to your local building department.
What You Need to Know About the Process
The process of installing solar panels in California typically follows these steps:
1. Design & Engineering
The first step is designing and engineering the panel system.
During this step, a solar installer or experienced Energy Consultant will assess the property's solar potential, select the appropriate solar panels, and design and present to you a system that suits the property’s unique features and energy production needs.
2. Permitting
Next, the solar installer must obtain the necessary permits from local authorities to install the solar panels.
This involves submitting the engineering of the system design and ensuring that every facet of the system complies with local building codes.
3. Installation
Once the permits have been issued, installation can begin.
During this stage, the solar installer will place the solar panels per the approved design.
This process involves mounting the panels, installing the inverter, and connecting the system to the home's electrical system.
4. Inspections
Once the installation is complete, it will be subjected to a series of inspections by building inspectors and the local utility provider.
These inspections ensure that the solar system is installed correctly and safely and that it complies with all relevant regulations.
As soon as the system passes its inspections, the local building department will sign off on Final Inspection which then triggers the utility to issue a “Permission to Operate” letter to the solar installer connecting the system.
5. Energize System
The final step is to energize the system. After the inspections are complete and the system has secured the “Permission to Operate” letter, it can be energized to allow the solar panels to start generating electricity and powering the home.
Selecting a Solar Installer
Choosing the right solar company is essential to get a system that meets your needs. With that in mind, follow these seven steps to find the ideal solar installer:
Research installers. Start by researching solar installers operating in California. Look for companies with a good track record and excellent online reviews and ratings from past customers.
Check licenses, insurance, and certifications. Ensure the installer has the necessary licenses, insurance coverage, and certifications to provide solar services. For example, a certification from the North American Board of Certified Energy Practitioners ensures the installer follows industry best practices. The installer should also be OSHA-certified and hold a C-10 license and general liability insurance.
Consider experience and expertise. Assess how long the installer has been in the industry and how many installations they've completed. More experience often translates to a smoother installation process and better customer service.
Compare quotes. Get quotes from a few different installers and compare them. This will help you understand how different installers price their services and allow you to make an informed decision.
Assess the company’s warranty and support. Look for an installer that offers a robust warranty and strong after-sales support. The warranty should cover both the hardware and the installation workmanship.
Make sure the installer is self-performing. Last but not least, look for installers who self-perform the installation and have ample solar training and knowledge. This is a great way to maximize your control over the project and ensure a robust system and excellent customer service.
For more information on choosing the right solar installer, check out our comprehensive guide.
Thinking of Going Solar in California? We’re Here to Help!
The prospect of solar energy in California is bright, and now is an excellent time to install a solar array.
When the time comes, Sandbar Solar is here to help!
We help customers throughout the Central Coast and San Francisco Bay Area design and install custom solar and battery systems for more eco-friendly homes and increased energy independence.
Ready to start designing your solar system?
Call us to explore your options and to request a free solar quote: (831) 469-8888.
