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Solar Panels in California: What You Need to Know

Looking to install solar panels in California? Learn everything you need to know about how solar panels work, the upfront costs, financing options, and long-term savings.

Key Facts

  • Solar panels work using photovoltaic (PV) cells made of specially treated silicon.
  • Solar panel installation in California costs an average of $2.82 per watt or $2,820 per kilowatt (as of 2023).
  • Leasing offers little to no upfront costs
  • Buying enables access to rebates and incentives
  • To determine how many solar panels you need, calculate your current energy usage

How do Solar Panels Work?

Solar panels work by converting sunlight into electricity. That's the short version. The actual process is a little more complex.

Solar panels are made up of photovoltaic (PV) cells (also known as solar cells). Each cell is made of specially treated silicon, which is able to absorb and generate electricity. A typical solar cell will contain two layers of silicon separated by a junction.

One silicon layer is treated or doped with phosphorus to give it a positive charge, while the other layer is doped with boron for a negative charge.

When photons from the sun hit the solar panels, it displaces electrons into the junction. The movement of electrons creates an electric charge which is transmitted into the junction. The junction is usually made of a conductive metal like copper or aluminum. The electric charge from each cell becomes amplified and is sent into an inverter.

While the number of solar cells on a panel varies, there are generally 36 to 144 solar cells in a solar panel. Most of the panels in California come with 60 or 72 cells.

Solar energy converts to electricity

Solar panels generate direct current which is not compatible with some household appliances. To convert it to alternative current (ac), solar systems require an inverter. Inverters are a compulsory component of almost every solar installation.

Inverters help convert AC to DC current, which is compatible with all office appliances. Ac current is either sent to a central inverter unit, or converted directly via micro-inverters attached to solar panels.

Solar experts consider micro-inverters as the more efficient option. It ensures that you receive DC current even if some parts of the panels are under a shade or covering.

Residential solar users may choose to install an energy storage solution like the PowerWall (a Tesla solar battery) to act as a backup during night-time or blackout.

Business owners may choose to invest in solar batteries. This is important if the business is situated in areas with low peak sunlight hours. In addition, solar batteries ensure that the users stay in business even during power outages. These batteries, especially lithium-ion ones, can last for 20 years with minimal loss in efficiency.

How Much Do Solar Panels Cost in California?

Average Cost of Solar Panel Installation in California

As of 2023, solar panels cost an average of $2.82 per watt or $2,820 per kilowatt in California. This price may be higher or lower in different areas in the state. There are also state and federal solar incentives designed to drive down the cost of commercial solar installation.

For example, a business can file for a federal solar tax credit to get a 30 percent refund on the cost of solar installation. If a 5 kWh solar panel cost $14,100, solar users will end up paying $10,434. You may also earn energy credits for using solar energy via state-sponsored programs like the SGIP.

The table below provides a breakdown of solar installation costs in California.

System Size System Cost System Cost (after ITC)
3 kW $8,460 $6,260
4 kW $11,280 $8,347
5 kW $14,100 $10,434
6 kW $16,920 $12,521
7 kW $19,740 $14,608
8 kW $22,560 $16,694
9 kW $25,380 $18,781
10 kW $28,200 $20,868

What Determines the Cost of Using Solar in California.

Several factors determine the cost of using solar in California. Some of these include:

  1. Solar panel size, type, and quality
  2. Roof or ground solar installation
  3. Cost of license and permission from utility companies
  4. The solar company in charge of installing the system

Solar Panels: Is it Better to Lease or Buy in California?

When it comes to solar panels in California, whether it's better to lease or buy depends on your personal preferences and financial situation. Each option offers unique benefis.

Homeowners who opt to buy are eligible for more solar incentives. Some users may prefer to pay in installments in lieu of a one-time payment.

On the other hand, a lease is an agreement between a solar user and a third-party. The users pay rent on installed solar panels, while the third-party cover the cost of installation and maintenance. In a lease system, users will lose access to the panel if they are unable to pay rent.

Ownership is the main difference between choosing to lease or buy a solar system

Business owners with enough cash reserves often choose to purchase the system. Whereas solar users with insufficient cash reserves may opt to pay rent or lease the system. In addition, leasing is an attractive option for new solar users who are unsure of making a commitment. There are often clauses in a lease that enables users to later purchase the system.

Solar Leasing

Solar leasing in California means homeowners do not own solar panels. Instead, a third party owns them. With a leasing contract, the third-party company installs, owns, and runs an energy system on a homeowner’s property.

Homeowners who do not have the cash reserves required for the initial investment in solar panels might enjoy leasing solar panels. It makes a move to solar energy more accessible. Also, leasing benefits homeowners by easing the financial strain of going solar.

Finally, leasing is a good fit for homewoners who wish to start their renewable energy journey but need more time to afford it. It enables the customer to have renewable electricity with no initial costs.

Benefits of Leasing in Calfornia

  • Zero initial payment: Panels installed are for little to no money down, depending on the terms of the solar lease. Yet, homeowners will make payments for the duration of the lease.
  • Save money and time on maintenance: Solar panels need little care. But they are only maintenance-free if on a solar lease. The third-party owner, under a lease, handles any faults with the solar panels.


No rebates and incentives: Homeowners are not eligible for government or private rebates or incentives because a third party owns the system.

House resale value: Although solar panels add value to a home. A home with leased solar panels can complicate a real estate transaction if the new owner does not want them or the homeowner transfers the lease.

Buying Solar Panels

Buying solar panels is the most cost-effective option for solar installation because it removes the added expense of paying interest in installments. An important consideration before buying solar is; how long a resident intends to stay in the house and how much money they have to invest in solar panels.

Benefits of Paying Cash

  • Return on investment: Buying is the best option if there is enough money. The initial investment in solar panels is expensive, but they pay for themselves in the long run. On average, it takes an average of seven to ten years to make a complete return on investment. Owning the system allows homeowners to enjoy federal tax credits and reimbursements. </p>

  • No hidden fees: Homeowners can know how much the solar panels cost because there are no hidden fees or fine print. </p>

  • Incentives and Tax Credits: The federal solar tax credit allows residents to deduct 26% of the cost of putting solar panels on their homes from their federal taxes. California also has many incentives for those switching to solar.


The Investment is High: The cost of solar panels, whether purchased with cash or through a private loan, is high. When homeowners do not have the finances to pay out of pocket, they will have to take out loans and pay more interest.

How Long Do Solar Panels Last?

Solar panels are designed to last for 25 years. To ensure its longevity, manufacturers often use a protective and non-reacting material to cover the surface. However, the panel’s efficiency will gradually reduce after the first two decades. This reduced efficiency is referred to as the degradation rate. That said, most solar panels will degrade at a rate of 0.5 percent every year after installation.

Solar panels should still produce approximately 90% of their original output after a decade. Solar panels will last longer if wind, debris, rust, cracks, or other external forces do not harm them.

How to Make Solar Panels Last Longer

Here’s how to ensure your solar panel lasts longer.

  1. Clean off debris and conduct maintenance checks
  2. Monitor the net meter or solar app for fluctuation in energy output
  3. Hire a reputable solar company to install the system
  4. Use high-quality and efficient solar panels

Clear your solar panel of debris

Your solar panels must have unhindered access to sunlight rays. So, always clear off all dust and debris covering the panel surface. More so, ensure you perform routine checks and cleaning at least two times in a year.

California businesses in dusty or densely forested areas may conduct these checks every few months. It’s advisable to take precautions when cleaning roof-mounted panels. Better still, contact your solar company to handle the process. A professional cleaning service can also do the job.

Continuously monitor the solar system

Always keep your eye on the net meter or mobile app attached to the panel. Contact your solar company if the output falls below the expected rate. Also, a spike in your utility bills may mean there’s a problem with the system.

Partner with a reputable solar company

Working with the right solar company can help increase the longevity of the solar panel. Your preferred company must offer long warranties and periodic checks on the system.

In addition,the company must have a 24/7 customer support system to handle all complaints. You may consider hiring top California solar companies like CE Solar.

Use an efficient solar panel

Solar panels with a high energy conversion rate have a longer lifespan. These solar panels will maintain a high energy output longer than the 25-year expiry date. There are three types of solar panels based on the efficiency rate:

  • Monocrystalline solar panels have a 20 percent rate
  • Polycrystalline panels have a 15 to 17 percent efficiency rate.
  • Passive Emitter and Rear Cells (PERC) panels have a 25% efficiency rate.

How Many Solar Panels Do I Need?

Determining Your Solar needs.

Energy requirements vary with each home or business. Too many solar panels and you will end up with excessive installation costs and energy. On the other hand, you won’t get enough energy when the panels are not enough. So, how can you determine the exact amount of solar panels to install? Start by following these steps:

  1. Calculate your current energy usage
  2. Next, use it to determine the needed kilowatt of solar energy
  3. Calculate the number of solar panels to over the needed kilowatts
  4. Consider the panel and the roof size (for roof-mount installations)
  5. Calculate the weight of each panel and the load bearing capacity of the roof.

1. Calculate your average energy needs

Calculate your average energy needs by checking your electricity bills. Most bills will show the kilowatt-hour used in a month. Next, get the daily energy usage by dividing it by 30 days.

According to the EIA, an average home consumes 900 kWh monthly or 30 kWh daily. This figure may be higher or lower, depending on the user’s specific needs. In addition, energy requirements increase during summer and winter.

2. Determine the needed kilowatt of solar energy

How many kilowatts-hour of solar power is required to meet your energy needs? First, consider the number of peak sunlight hours in your location. For example, California receives 5 to 7 hours of peak sunlight.

Next, consider the energy output of your preferred solar panel. For example, a kWh solar panel will generate 4 kWh of solar energy in a day.

Finally, divide your daily energy usage by the energy produced by a one-kilowatt solar panel. If your daily usage is 30 kWh, you need a 7 to 8 kWh solar system.

Note: Solar output depends on the amount of peak sunlight hours and weather conditions. So, you should always install an additional kilowatt to make up for low energy output.

3. Calculate the number of solar panels to cover the needed kilowatt

A typical solar panel generates 170 to 350 watts of solar energy per hour. So, how many solar panels do you need to install? To solve this issue, divide your daily energy usage by the solar panels’s hourly output.

Case study: Kate uses 1.25 kWh or 1,250 watt per hour. For a 350-watt solar panel, she will need to install four solar panels to meet up with the energy demands.

Do all Solar Panels Produce the Same Energy?

Solar panels do not produce the same energy due to differences in the wattage rating and efficiency rate. Most solar panels have a wattage rating from 170 to 350. This means you will get more output from a panel with a higher wattage. Solar energy output also depends on the brand or manufacturer.

Brands like First Solar (460 W), LONGi (455 W), and REC (450 W), create panels with more than 400 wattage. In addition to this, the number of peak sunlight hours and the weather will also determine how much energy it produces.

This means a 5 kWh solar panel in sunny or tropical areas like Florida will produce more energy than one in temperate regions like Alaska. Furthermore, your solar panel will produce more energy in summer than in seasons with low sunlight intensity.

How many Solar Panels would it take to Power a House in California?

An average-sized home spanning about 2,500 sq/ft with a 30 kWh daily energy usage will require at least nineteen 300-watt solar panels. However, most homes have varied energy needs.

To accurately determine the number of solar panels, start by knowing your average daily energy usage. Check your monthly electricity bill and divide it by 30 days to get the daily usage.

Next, calculate the needed solar output by dividing the daily energy needs by the peak sunlight hours. 30,000 watts (30 kWh) divided by 7 peak sunlight hours is equal to 5,660 watts.

If you decide to use 300-watt panels, you must purchase 19 solar panels to meet the energy requirement.

Can you Run a House Solely on Solar Panels in California?

Yes. Modern solar systems are affordable and highly efficient in meeting your energy needs. For California residents, solar systems are fast becoming an attractive option due to the high cost of electricity. As of November 2022, the state’s electricity rate is 58 percent higher than the national average.

Here are a few things to consider before switching to solar power.

Solar panels are a huge investment.

You will need to consult and hire a reputable solar company before you proceed with this decision. Some solar companies enable users to pay installments or to access other financing options.

Your solar panel output must exceed your energy usage.

Solar panels will not always operate at maximum levels. For example, solar energy is low during winter and bad weather conditions. These panels produce low energy when covered with snow and debris. Add one or two kilowatt panels to cover these gaps in output

Invest in solar batteries.

Lithium-ion solar batteries like Tesla batteries will reduce your dependence on utility companies during blackouts or outages. You also watch out for solar incentives that reduce the cost of installing these batteries. For example, the SGIP may cover 35 percent of the cost of installing solar batteries.

Assess the peak sunlight hours in your region.

The peak sunlight hours are periods when the solar output is high. The higher the peak sunlight hours, the more solar energy you receive. Thankfully, California receives an average of seven hours of peak sunlight. So, you don’t need to invest in more solar panels.

Invest in solar roofs.

Solar roofs help you to maximize exposure to solar energy. Thanks to Tesla solar roofs, users don’t have to worry about south or north-facing installation issues. These roofs are also highly efficient at capturing solar energy and often come with 25-year warranties.

Which type of Solar Panel is best for Home Use in California?

Monocrystalline panels are the most efficient in capturing solar energy. These panels have a 24 percent efficiency rate and a lifespan between 25 to 40 years. Despite their huge advantage over other solar panel types, it costs more to install these panels. In contrast, olycrystalline panels offer a more affordable option, which makes them a good pick for homeowners with a tighter budget. They are however not as efficient as Monocrystalline panels.

Monocrystalline Solar Panels


  • High efficiency rate and do not take up space.
  • Lifespan between 25 to 40 years.
  • Less-severe loss in energy output in high temperatures.


  • It is more expensive than other options.

Polycrystalline Solar Panels


  • There are no silicon waste generated
  • It is an affordable option.


  • Low efficiency rate between 15 to 20 percent
  • Low energy output in high temperatures.
  • Not efficient in low light conditions.
polycrystalline panels (1).jpg
Polycrystalline panels have a distinct blue color and operate with a 15- to 17-percent efficiency rate.

How Big of a Solar System do I need to go Off-Grid in California?

The term “off the grid” refers to those who choose to unplug their residences from the national electrical grid. Off-grid solar systems, also known as stand-alone power systems, are not connected to the electrical grid. And they create energy through solar panels and battery storage alone. Batteries are essential in an off-grid system to store all the solar power the panels generate.

An off-grid solar system has four primary components:

  • The solar panel
  • Charge controller
  • Battery
  • Inverter

Solar Panel

The essential component of a solar-powered system is a solar panel. The number of solar panels needed depends on the energy the house consumes.

For example, a 300-watt panel exposed to 8 hours of daylight daily will generate around 2.5 kilowatt-hours per day. Multiply this by 365 days per year will result in an annual solar output of roughly 900 kilowatt-hours.

According to the US Energy Information Administration, a typical American home uses about 11,000 kilowatt-hours per year. So, by dividing the total energy usage by the estimated production of one solar panel, about thirteen of these panels will be enough to power a home of that size.

But, of course, if it is a smaller house, the energy requirements will be lower and need fewer panels.

Charge Controller

Charge controller checks and changes the energy flow from the solar panel to the battery. Like solar panels, charge controllers come in various sizes and types. It keeps batteries from overcharging and reduces safety risks.


Batteries are for storing the energy that the solar panels collect. The energy consumption will determine the number of batteries needed. An off-grid solar installation requires a battery bank. This makes off-grids very expensive to run. For example, a homeowner needs 500 watts for 8 hours daily, with a daily energy usage of four kWh. A four to an eight-kWh battery is enough for a four-person home. Homeowners’ energy requirements may fluctuate depending on what they are powering in the house or the size of their property.


Finally, the inverter turns the electrical energy stored in the battery into alternating current (AC). The AC then powers and operates the vast majority of household appliances. Inverters are available at various wattage levels to accommodate many devices.

What happens if My Solar Panels Produce More Power than I use?

When solar panels collect more energy than required, the extra can either be stored in batteries or sent to the power grid with net metering.

Net energy metering (NEM) is a utility billing arrangement in which solar owners earn credit for the energy they send back to the grid or utility company. They then use that credit to offset the power consumption they draw from the grid in subsequent months. The idea of net metering ensures the most usage of all power generated from solar panels.

Net metering rules vary by state, but as a pioneering solar energy state, California’s policies provide some great benefits to its citizens. For example, in California, residents get credits for energy sent to the grid at the same charge rate.

Where does Solar Energy Go When batteries are full?

The storage of extra energy in batteries varies depending on the type of solar system. Grid, off-grid, and hybrid systems are the three basic types. The grid system uses a solar grid connected to a utility provider to store power.

These systems do not need big batteries, so extra power goes back to the grid. This earns money for the homeowner through net metering. The hybrid system is like the grid system, with enough solar batteries to store emergency power.

When the off-grid solar batteries are complete, the solar system’s power is no longer absorbed when the battery bank is full. The solar panels will continue to produce electricity, but they will not use it or store it until there is an energy demand or there is free battery space. Residents use direct energy produced and bank excess for when the panels do not generate enough or there is a blackout.

Do Some Solar Panels work Better than Others?

Some solar panels work better than others. Of the three types of solar panels, monocrystalline works better because of their high-efficiency rate, but they are more expensive than other panels.

How Can You Tell if a Solar Panel is Polycrystalline or Monocrystalline?

There are several differences between polycrystalline and monocrystalline solar panels. The primary variation is their color; polycrystalline panels are blue, while monocrystallines are black.

Differences between polycrystalline and monocrystalline solar panels

Polycrystalline Monocrystalline
Production Made from multiple silicon fragments melted together

Has straight edges

Formed from a single silicon crystal

Has rounded edges

Efficiency 20% 24%
Life span 20 - 35 years or more 25 - 40 years or more
Cost Average price Very expensive
Heat tolerance Low tolerance High tolerance
Color Blue Black

Solar Panels - Frequently Asked Questions

Do Solar Panels Work On Cloudy Days?

Advancements in technology allow modern panels to use the sun’s energy all year, including during overcast mornings and short winter days.

On a clear sunny day, solar panels receive the highest power around the middle of the day, when the sun is very high. Yet, even the gray low light of a dreary winter afternoon generates enough energy to produce electricity.

Do Solar Panels Directly Power Your House?

Solar panels turn sunlight into direct current (DC) energy, which then flows to an inverter that converts the energy to alternating current (AC). This energy runs through the home’s electrical panel, delivering power to any equipment.

Can Solar Panels Work At Night?

While the sun’s power is critical to how a solar panel converts light into electricity, solar energy installations can still power homes day and night when combined with batteries.