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California is a leader in the solar industry, with enough solar power installed statewide as of December to power 10.7 million homes. Solar panels may be a good option if you live in the Golden State and are interested in lowering your household carbon emissions while also saving on energy bills.
California’s average residential electricity rate is higher than the national average, making Californians pay a higher traditional energy bill than residents in other states, according to SaveOnEnergy, CNET’s sister company.
On April 15, California’s new net metering regulations went into effect. Overall, they increase the incentives for going solar with a battery while reducing the payouts for solar without storage.
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Meanwhile, the cost of residential solar panels has decreased by more than 69% in the last two decades, according to a Lawrence Berkeley National Laboratory report. Tax credits and rebates at the federal, state and local levels can help bring that cost down further. Whether you’re interested in helping the environment or lowering your energy bills, the amount you could save on solar panels in 2022 is higher than in previous years.
Best national solar panel companies in California
According to the Solar Energy Industry Association, California has the largest solar market in the US, with nearly 2,000 solar companies operating across the state. While this means there are plenty of California solar installers to choose from, it can also feel overwhelming to sort through your options.
We’ve compiled a list of some of the best national solar panel companies that stand out in the industry. Here are a few that service California.
Local solar panel companies in California
During your search for solar installers, consider looking into local solar companies, too. We pulled a few California solar companies with some of the highest average Google review scores. However, you should also do some research on your own, and get referrals from people you know if you can. Here are a few local solar companies in California that might be worth considering.
How to determine which solar company in California is best for me
You’ll want to make sure your installer has experience working with the type of roof that you have, and the type of system you want installed, like grid-tied or off-grid.
Ben Delman, a communications director with Solar United Neighbors, a clean energy nonprofit, says a homeowner interested in solar should look for solar installers that are certified by NABCEP and have the proper licensing for their work. Reading online reviews from multiple sources can also help you get a better understanding of a company’s reputation. A few places to start looking for solar company reviews are Google, Yelp and Angie’s. Delman recommends looking for solar companies that have at least 20 to 30 reviews. If you know someone who has solar panels on their home, you can ask them for recommendations too.
Aside from certifications and reviews, there are a few other things to look for in a solar installer. A good installer, Delman said, will be able to:
- Give good word-of-mouth references
- Clearly explain the project and working deadlines in detail
- Define technical terms in an easy-to-understand manner
- Be transparent about pricing and how financing works
- Have knowledge about the local permit requirements and the process for system interconnection with the local utility company
- Understand homeowners association restrictions and help you navigate that process
A reputable solar installer should be able to answer any questions you may have, no matter how difficult those questions might be. Don’t feel hesitant to ask for clarification on any project and pricing details. To get the best price possible, shop around for multiple quotes. Delman recommends getting at least three quotes before settling on an installer.
Average cost of solar panels in California
Here’s a look at the average cash price for a 5-kilowatt system before factoring in tax credits incentives, according to data from FindEnergy.com.
California solar panel costs
|System size (kW)||Price per watt||Total cost|
California solar panel incentives and rebates
Even though the cost of solar panels has decreased in the last two decades, they’re still a substantial investment. But several solar tax credits and incentives make solar more affordable, especially in California. One key solar incentive, net metering, was reduced in a utility commission vote last year. When that change goes into effect April 15, it’s expected to increase a solar system’s payback period from six years to 10. California also introduced time of use rates, which could make installing backup batteries more profitable.
The residential clean energy credit (previously known as the investment tax credit) is a federal solar tax incentive offered in California that credits 30% of the cost of a solar system back to consumers who buy solar panels. This solar tax credit was increased and extended due to the Inflation Reduction Act, passed in August. There is no cap on the federal tax credit, so you can claim the entire 30% regardless of the size of the system.
You can apply for the residential clean energy credit by including IRS Form 5695 with your tax return. The IRS provides instructions on how to fill out this form, or the best tax software can take care of it for you. Your savings from the tax credit will be included in your tax refund or used to offset taxes you owe.
There are various state and local solar incentives available in California, too. You can find a more comprehensive list through the Database of State Incentives for Renewables and Efficiency. Here are just a few you should know.
California solar incentives
|Disadvantaged Communities – Single-Family Homes||DAC-SASH provides no-cost rooftop solar installations to California households that meet set income qualifications.|
|Property tax exclusion for solar energy systems and solar plus storage system||Consumers who install solar energy systems before 2024 are excluded from paying increased property taxes.|
|Net metering programs||California offers net metering programs, which let consumers sell back to the grid any extra solar energy generated by their system. Californians connecting their solar system to the grid after April 15, 2023, will be under net energy metering 3.0, which sets reimbursements for power lower than previously.|
|Sales and use tax exemption||Equipment that generates or stores electricity, including solar panels and batteries, are exempt from sales and use tax in California.|
|Self-Generation Incentives Program||SGIP provides rebates to homes and businesses that install energy storage systems, such as solar batteries.|
How to pay for solar panels in California
If you decide to invest in solar panels for your home, there are several financing options to make the purchase easier.
Cash: A big expensive project like solar panels requires a lot of cash. If you see solar power in your future consider saving money now. Regular contributions to a high-yield savings account can help pad your savings.
Solar loan: Many solar companies will offer third party financing. Shop around with different lenders, because your solar company’s third party choice might not have the best terms or interest rate.
Installation factors to keep in mind
Solar panels are a big investment, so it’s important to consider all elements that could impact whether they’re right for you. Some installation aspects to consider include:
- The condition of your roof: The size, shape and slope of your roof can affect how much electricity a solar system generates. According to the Department of Energy, solar panels are most efficient on roofs with a slope between 15 and 40 degrees. The age and overall condition of your roof are also considerations. Older roofs or roofs needing maintenance should be replaced or repaired before solar panel installation.
- HOA and neighborhood regulations: California law prohibits homeowner associations from banning solar panel installations, but there may still be specific requirements and approval processes in your neighborhood. Be sure to research the requirements for solar installation in your neighborhood ahead of time, so there are no issues down the road.
- Insurance coverage: After installing solar panels, contact your homeowner’s insurance agency to add the panels to your policy. Most standard homeowner’s policies cover rooftop solar panels, but you’ll need to check with your agency for the specific details of your policy.
- Your location: Solar panels are designed to work in all climates and areas that receive indirect sunlight. But they’ll be much more efficient when installed where they receive at least four hours of direct sunlight each day. If your home is in a cloudy region of California or gets shade coverage throughout the day, a solar panel system will not generate as much electricity as it would with direct sunlight.
- Rentals: If you rent your home, you may not be allowed to install solar panels. You can check with your landlord or rental management company to confirm whether solar panels are allowed. If not, you can consider community solar programs as an alternative. These let you subscribe to electricity produced by solar panels at another location and receive a credit on your energy bills. The subscription fees are set at a lower rate than the value of these credits, so you come out ahead financially. In California, community solar programs are expected to grow quickly due to new regulations.
How we found the best solar companies
Doing a hands-on review of a solar company is difficult, and considering all the differences between projects is impossible. Instead, we focused on what we can measure and meaningfully compare among solar companies.
When evaluating solar companies, we focus on three categories of criteria: equipment, warranties and service.
For the equipment category, companies receive scores for the panels, batteries and inverters they install. The warranty category includes the guarantees on the panels, workmanship and weatherization against leaks. Solar companies will earn points in the service category if they offer a price match guarantee, a decent level of price transparency and a well-rated app for monitoring solar energy production. Solar companies lose points if there are glaring issues concerning customer service. This includes lawsuits, investigations or reputations for low-quality service. These service issues will always be detailed in the review.
We don’t consider the average price of a solar company’s installations in their score. Accurate and reliable pricing information is hard to find and difficult to compare across service areas (and even project to project). Solar companies are often slow to disclose this information as well. We also leave out easy-to-find (but not useful information), such as how many states a company operates in.