Going Solar in SoCal: Photovoltaics in California

ondering if installing solar panels in California makes sense? But the better question may be, if not in California, then where? It will be no exaggeration to say that the Golden State, particularly the southern part of it with “solar superstars” like Los Angeles and San Diego, is an ideal place for generating solar energy. Let's dig into what makes us so certain about it.

Solar energy in SoCal

Without a doubt, California stands as the leader in the U.S. solar industry, with more than 1.5 million PV systems in place. The amount of solar power California produces can be described as unprecedented – according to the Solar Energy Industries Association (SEIA), the state has 38,145 MW of solar installed. 27,3% of its electricity comes from solar, and the produced solar energy is enough to power 10,510,648 homes, which is a quarter of the state's population. Remarkably, the prices for solar in this sunny state have fallen 52% over the last decade.

Los Angeles is rightfully referred to as the solar capital of the United States. In a recent study on solar energy in America's biggest cities, Los Angeles was ranked first with 649,9 MW of total solar capacity, while San Diego took second place with 468 MW of solar power installed. This ranking came as no surprise since Los Angeles had repeatedly led the U.S. solar energy industry, namely from 2014 to 2016 and from 2018 to 2020, with a brief interruption in 2017 when San Diego topped the charts.

By harnessing the power of the sun, California solar panel companies contribute to reducing carbon emissions and building a brighter, more sustainable future for generations to come.

Here are some more facts proving the impressive success of solar energy in California:

• Co-located in Kern and Los Angeles counties, the 579-megawatt Solar Star Projects are considered to be America's largest solar farm, with their capacity to provide enough green energy to power over 250000 homes.
• Apple’s solar farm, called the First Solar California Flats Solar Project, is the largest photovoltaic corporate project by a company that is not a utility. The project helps power Apple’s corporate headquarters, along with solar panels installed on the roof of Apple Park.
• In 2020, California became the first state to require photovoltaic panels on the roofs of most newly built homes. With about 280 sunny days per year, a solar setup is absolutely worthwhile.

Cost of solar panels in California

Today, the average solar panel cost in California is $2.68 per watt, which is lower than the national average of $3.00 per watt. Thus, a typical 5kW or a 6kW photovoltaic setup will range in cost from around $14,000 to $16,000. Remember that after solar incentives, the price of PV panels can be reduced by thousands of dollars. Examine the table below to find out the average costs for different photovoltaic kits in CA, USA, before and after the 30% Federal Tax Credit (ITC).

Solar incentives in SoCal

Is it possible to considerably reduce the upfront cost of photovoltaic panels? That largely depends on the solar incentives available in your area, and California has plenty of them.

Like in most states, the major incentive you should be aware of is the Federal Tax Credit (ITC). As stated in the Inflation Reduction Act, PV panel system owners could be eligible for a tax credit of 30% against the cost of the system. To qualify, you must own the panels and have a taxable income.

The Self-Generation Incentive Program (SGIP), as described by the state’s Public Utilities Commission, provides rebates for buying and installing battery storage systems at both residential and non-residential photovoltaic facilities, making getting a solar battery more affordable. The SGIP Equity Resiliency Program, which is a supplementary incentive within the SGIP Program, offers additional rebates of either $850 or $1,000 per kWh of energy storage. This program is mainly focused on low-income households and families living in areas prone to wildfires or blackouts.

Within the Single-Family Affordable Solar Homes (SASH) Program, eligible low-income homeowners who get their electricity from Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) could qualify for cash incentives for every kilowatt of solar installed. As of November 2022, The Single-Family Affordable Solar Homes (SASH) Program has installed over 9,600 photovoltaic installations and provided $137.9 million in fixed, up-front incentives.

It is also worth mentioning the Net Energy Metering Program (NEM) of California, which was historically one of the nation’s best. The initial NEM program was started in 1996 to encourage utility customers who produced their own clean energy by offering financial credit on their electricity bills for any excess energy fed back to the grid. Recently, the state’s Public Utilities Commission has established a new way for PV panel owners to receive credits for the energy sent back to the utility, called Net Billing. The new method means fewer gains for solar customers. Currently, average net metering rates range from $0.23 per kWh to $0.35 per kWh. The new Net Billing program (or so-called NEM 3.0) will cut those rates to an average of $0.05 per kWh to $0.08 per kWh.

Last but not least, some local utility companies offer their own cash incentive programs. For example, The Rancho Mirage Energy Authority (RMEA) provides a one-time $500 rebate to its residential customers who install or expand a home PV system by adding additional panels or energy storage, and the Sacramento Municipal Utility District offers up to $2,500 for solar users with battery systems.

The origins of the solar boom in California

The state first started promoting solarpower in 1976, when it began to provide financial incentives for investment in solar energy. In 1978, Congress passed the Public Utility Regulatory Policies Act (PURPA), in part to encourage electricity generation by small producers using renewable resources to reduce U.S. dependence on foreign oil. Founded in 1980, a 1 MW photovoltaic facility in Camarillo, located just 45 minutes north of Los Angeles, was an impressive capacity for solar at that time.

The booming solar story truly began with the 1996 passage of the Electric Utility Industry Restructuring Act (Assembly Bill 1890). California biggest solar project became the first state to deregulate its utility companies, meaning that customers could now choose their electricity supplier. Furthermore, the state adopted net metering policies in 1996, allowing surplus electricity produced by PV panels to be fed back into the grid. All these initiatives formed the pillar of solar energy development in the U.S.

For businesses considering the switch to solar energy, understanding commercial solar system costs is crucial. Investing in commercial solar panels for sale can lead to significant long-term savings on energy bills while reducing carbon footprint

Top solar installers in SoCal

California offers an unbelievable variety of solar energy providers. According to the SEIA, the Golden State has 2378 solar companies, including 386 manufacturers and 934 installers. Choosing the top dealer is a discussion for another time, but for now, we'll give you a non-ranked list of some of the most well-known solar installers in SoCal, USA:

• Sunrun;
• SunPower;
• Vivint Solar;
• Solar Optimum;
• NRG Clean Power;
• Elevation.

Key takeaways on switching to solar in California

Solar panels are always a big purchase accomplished with significant initial expenses. However, if you buy a solar setup in a region with abundant sunlight like California, you will most likely find that installing solar panels is well worth the investment. That holds especially true when the state offers various solar incentives, as is the case in California. Some of them are becoming less beneficial, so do not hesitate to go solar right now.

Interested in the commercial applications of solar energy in Michigan? Explore our comprehensive resource on Solar Energy in Michigan to understand how businesses across the state are leveraging solar power to reduce costs and carbon emissions. Additionally, learn about commercial solar energy systems and their benefits for businesses in our article on Commercial Solar Energy Systems.

Sources:

https://www.seia.org/state-solar-policy/california-solar

https://environmentamerica.org/california/

https://www.solarreviews.com/solar-panel-cost/california