California Solar Panel Cost: Savings and Payback (January 2026)

You'll spend an average of $12,005 on a 5 kW system in California, after tax incentives.
For California, you can use $3.10 per watt to determine the price of a larger system (system size x price per watt x 0.7 to account for tax incentives).

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Brogan Woodburn

Last updated: January 29, 2026

Fact checked by: Alex Zdanov

What to know

Cost: About $2,401 for a 1 kW system to $12,005 for a 5 kW system after tax credit.
Savings: 6 year payback; about $25,124 saved over 20 years.
Environmental benefits: Potential to reduce your carbon emissions significantly.

Going solar in California now averages about $3.10 per watt. That means you can expect to pay roughly $3,102 per kilowatt (kW) of installed capacity before incentives. For example, a 5 kW system typically costs around $17,150 before applying the 30% federal tax credit. Once you factor in that tax credit, the out-of-pocket cost for a 5 kW installation comes to about $12,005

However, a 5 kW system isn't necessarily the best size for homeowners in California. According to our data, California residents currently pay an average of 30.70c per kWh, with a typical electric bill of around $154.73 per month for 504 kWh of consumption. Considering this energy usage, a 4 kW system is ideal to cover the energy needs of most.

How long does it take to see a return on your investment in California?

The upfront cost is what you pay for a system (whether you pay cash or finance doesn't factor in this equation). The payback period is the amount of time until you break even on your investment considering savings from energy bills. And the net 20-year savings is what you save over 20 years minus the upfront costs. All of these work together to show how much you could save with solar in the state.

5 kWh System	California Average	U.S. Average
Upfront Cost	$12,005	$12,530
Payback period	6 Years	7 Years
Net 20-year savings	$25,124	$23,493
*These are estimates. Getting personalized quotes from local installers is crucial for accurate pricing.

Federal tax credit impact: The 30% federal Residential Clean Energy Credit significantly reduces your installation costs. For example, a $20,000 system would cost you $14,000 after the credit.

Is California good for home solar panels?

To gauge potential, we look at average roof size, system capacity, and electrical production.

Roof size: 929.5 sq. ft.
System capacity: Up to 19,205.015 kW DC
Electricity production: About 1,660.028 kWh AC per year

On average, a solar power system in California can lower your electricity bill and pay for itself over time.

Below you can see power generation, cost, and savings of different system sizes.

	1 kW System	2 kW System	3 kW System	4 kW System	5 kW System
Roof Space	72 ft² ft2	143 ft² ft2	215 ft² ft2	286 ft² ft2	358 ft² ft2
Annual power value	$510	$1,019	$1,529	$1,857	$1,857
Average cost	$2,401	$4,802	$7,203	$9,604	$12,005
Average yearly production	1,660 kWh	3,320 kWh	4,980 kWh	6,640 kWh	8,300 kWh
Average monthly savings*	$42.47	$84.93	$127.40	$154.73 best value	$154.73
Full payback period	1 years	3 years	4 years	5 years	6 years
CO2 reduction per year	0.24 tons	0.48 tons	0.71 tons	0.87 tons	0.87 tons
*Savings assume a $154.73 monthly electricity bill

How to pay for solar panels in California

Purchasing solar panels is no small task. Here are a few ways you can pay for solar:

Cash purchase: This is the best choice if you can afford it. Paying in cash gives you the best long-term savings but requires a larger upfront investment, of course.
Solar loans: You can spread the cost over time with a loan, but be mindful of interest rates and loan terms.
Solar leases and PPAs: Power purchase agreements (PPA) and leases have lower upfront costs. However, you don't own the system, which means you save the least over time. There can also be complications if you want to sell your home.

What affects the cost of solar panels in California?

Several factors impact the final price of your solar installation:

System size: Larger systems cost more upfront but often yield greater long-term savings.
Panel type and efficiency: Monocrystalline panels are generally more efficient and expensive than polycrystalline or thin-film options.
Installation complexity: Roof type, shading, and site-specific challenges can increase installation costs. Permitting and inspection fees also factor in.
Additional considerations: Battery storage adds to the initial investment but provides backup power and greater energy independence. Labor and installation quality are also essential cost considerations.

How to save on California solar panel costs

Getting the most bang for your buck is essential when investing in solar. Here are some strategies to save money:

Maximize the federal tax credit: Understand the eligibility requirements and claim the full 30% credit.
Shop around for quotes: Get quotes from multiple installers to compare pricing and services. Don't just focus on the lowest price; consider reputation, experience, and warranty.
Consider system size: Be careful of going overboard. A properly sized system will meet your energy needs without unnecessary costs. Analyze your energy usage to determine the optimal size.
Explore financing options: Compare loan interest rates and terms carefully. If considering a lease or PPA, understand the long-term implications and potential trade-offs. Cash purchases often offer the best long-term savings.
Negotiate with installers: Don't be afraid to negotiate on price. Inquire about any discounts or promotions they may offer.
Optimize your home's energy efficiency: Before going solar, improve your home's energy efficiency. This will reduce your overall energy consumption and potentially allow you to install a smaller, less expensive solar system. Simple steps like sealing air leaks and upgrading appliances can make a difference.
DIY (if possible and permitted): While professional installation is generally recommended, some homeowners may be able to handle certain tasks themselves (like site preparation). Check your local regulations and be honest about your abilities.
Ask about rebates and incentives: Many states, cities, and utility companies offer rebates, net metering, and other incentives. Check with your local utility and city/county for any available programs.
Time your installation: Sometimes, installers offer discounts during slower periods. Inquiring about seasonal promotions might yield savings.

California-specific solar considerations

Weather Impacts: California offers diverse climates—from sun-soaked inland areas to cooler coastal regions. This means your solar performance can vary a bit by location, and you might need to tweak your system design to handle everything from wildfires to coastal fog.
Regulatory and Legal Considerations: California is known for its rigorous building and electrical codes, so working with a professional installer is a must. Also, many communities have their own guidelines, so check with local HOAs or zoning boards to ensure your setup meets all the standards.

Solar panel prices in other states vs California

Solar panel prices in California's biggest cities

Get a custom solar quote in California

Going solar in California can be a financially and environmentally sound decision. By understanding how much it costs and how much you can save, you can make an informed investment and enjoy using clean energy for years to come. Get multiple quotes from reputable installers, compare your options, and take control of your energy.