Is a Home Solar Panel System a Good Investment in California?

October 13, 2023

Solar panels can bring financial savings & sustainable living — making it worth the investment for most homeowners

California, with its abundant sunshine and supportive energy policies, is a particularly advantageous location for homeowners to install solar panels. For many households in California and across the country, a home solar panel system is a good investment.

Solar panels create low-cost, clean electricity from sunshine and reduce your dependency on the power grid. This can lower your monthly utility bills and can add up over the lifetime of your system. Eventually, your solar panels can pay for themselves.

Are solar panels worth the investment? The short answer

Yes, solar panels are worth the investment for most California homeowners. Solar panels not only produce low cost electricity, but have gotten cheaper over the years thanks to innovation and government incentives. Enact can help you find the right solar system for your home. We offer California homeowners choice, transparency and simplicity — plus a solar monitoring app to track your investment.

What are the benefits of solar panels in California?

Solar panel systems provide multiple benefits to homeowners across the Golden State. Mainly, solar panels harness abundant sunshine to lower electricity bills.

You can lower the average costs of electricity bills by generating clean energy through solar. Solar panels in California can lead to substantial savings on utilities. The state’s high electricity rates make it more cost-effective to generate your own electricity from solar panels.

Over time, your monthly savings will add up and pay for the cost for your system. Solar panels typically have warranties for 25 years but can pay for themselves in four to ten years. In California, the payback period for solar panels makes them worth the investment as they can save you thousands of dollars over their lifespan.

Going solar is an easy way to lead a sustainable life. Solar panels produce zero carbon emissions and generate clean energy to power your home. Rooftop solar panels can reduce your carbon footprint and can make a difference in your community.

Is a storage battery worth the investment?

Yes, storage batteries are worth the investment for solar homeowners in California. After California enacted NEM 3.0 in April 2023, solar systems with storage pay off faster than solar only systems. Solar-plus-storage is worth the investment because it stores unused solar electricity, allowing you to use more low-cost electricity.

Solar-generated electricity is a “use it or lose it” system without a battery, any energy not used by your home or electric vehicle is sent to the electrical grid. Storage batteries store unused solar electricity for later usage — like during nighttime, stormy days or power outages.

How Enact can help you go solar

Enact makes solar simple, plus we offer transparency and choice from beginning to end. Our team of home energy advisors use Enact’s solar software to design a custom solar system for your home. After finding the right system design, Enact is involved throughout the installation and permitting process for ease of mind.

Going solar through Enact gives you access to many different solar panel, inverter and battery options. Our advisors can design multiple options for your home, based on your energy usage and financial needs, to create the optimal system.

You can get a free custom solar quote through Enact. All we need is some basic information about you and your home to get started. Using your satellite imaging and a copy of your latest utility bill, we can design a system for your home in minutes. To get a free custom solar quote, schedule a consultation with our advisors.

A consultation is brief, friendly and easy. Our advisors will create an initial design for your home. Next,  your advisor will talk about the installation process, payment options and answer any questions or concerns you may have. If you have any questions or concerns, our home energy advisors are here to help.

Make the most of your solar investment with Enact Home

Not only can Enact help you go solar, expand your current solar system or add storage to your solar system. But we also help after the installation process through our solar and storage monitoring app, Enact Home.

Enact Home let’s users monitor the performance of their solar system, with or without a storage battery. Users can track solar electricity generation, financial outcomes and storage performance.

After making the investment in solar and sustainability, it’s important to make sure your setup works for your home. Enact Home provides trust and transparency that shows your solar system’s performance. Whether you went solar through Enact or with someone else, Enact Home is not affiliated with a manufacturer offering independent analysis.

How do I know solar is worth it?

Solar energy can be worth the investment for many California homeowners. Solar system can lead to significant savings on utility bills, increase your property value and reduce your carbon footprint. There are multiple factors to see if solar is right for your situation.

1. How much do you spend on electricity?

The first thing you should evaluate is your electrical bill. The more electricity your home uses and the more you pay for it, solar can be right for you. Solar systems can supplement your energy usage and rescue your utility bills each month.

California has higher electricity rates compared the the rest of the U.S. This means there’s a higher chance you can save money switching to solar.

2. How much sunlight does your roof get?

Solar panels use sunlight to create clean electricity, making sun exposure a requirement for an efficient system. California generally receives more sunny days than other parts of the country, meaning your home is likely a great candidate for solar.

Some things that may impact sunlight exposure include shade from trees or other buildings. Other factors that affect a solar system’s output include your home’s orientation toward the sun and the roof type. Talk to an Enact home energy advisor for more information. Our advisors use Enact’s smart solar software to determine how much sunlight your roof gets.

3. Is your roof suitable for solar?

There are a few factors that determine if your roof is suitable for solar. Namely, the age and condition of your roof. Solar is an investment that can last 25 years or more. If your roof has damage or is old, you may need to repair or replace your roof to go solar.

Another factor is the material of your roof. Nearly all roof materials are compatible with a solar system, but some are easier than others. Wood and slate are more brittle than other materials, which makes it more difficult to install solar panels.

The size and tilt of your roof matter for solar output. Larger roofs with less obstacles, such as chimneys or skylights, are more ideal. Additionally, the most optimal roof angles (or tilt) for solar energy are between 30 to 45 degrees. This range receives the most sunlight which means more output.

In the northern hemisphere, south-facing roofs are the most ideal for solar panels. However, roofs that face east and west can also be suitable for solar. Even north-facing roofs can produce electricity with solar energy, but south-facing is the most ideal.

4. How much will a solar system cost you?

Remember going solar is a financial decision. Solar systems typically have high upfront costs, but pay for themselves slowly over time. For most California households, solar is worth the investment. Government and nonprofit incentives can also decrease the costs of solar.

The amount you pay for solar influences how fast your system will pay for itself. Different areas, homes, needs and preferences can result in different costs for solar systems. Additionally, labor, permitting costs and supply can influence the cost.

There are multiple ways to afford going solar, including cash payments and loan financing. Financing options in California are available to fit any household budget. Incentives can also reduce the costs of going solar.

How does California support solar ownership?

Disadvantaged Communities — Single-family Solar Homes

The California Public Utilities Commission and Oakland-based nonprofit GRID Alternatives have worked together to create the DAC-SASH program. DAC-SASH provides income-qualified homeowners in disadvantaged communities to receive no-cost rooftop solar installations.

To receive the upfront rebate — participants must be income-eligible, single-family homeowners and customers of Pacific Gas and Electric, Southern California Edison or San Diego and Electric. Income qualifications are outlined by annual CARE and FERA guidelines. To see if you qualify, check out the CalEnviroScreen tool.

Self-Generation Incentive Program (SGIP)

The California Public Utilities Commission’s Self-Generation Incentive Program provides upfront rebates to California homeowners and businesses for qualifying energy storage systems. SGIP is a tiered-block program, meaning the incentive value declines over time as more battery storage systems are installed. Rebate value also depends on battery size.

To see if you qualify, check out the CPUC website and Self-Generation Incentive Program website to apply. CPUC recommends contacting an administrator with your utility or solar installer before application.

California’s net metering policy

Net metering refers to a billing tool that rewards solar homeowners for excess solar-produced electricity that is sent to the grid. For a determined amount of kilowatt hours, utility customers receive a credit so when on cloudy days, the energy drawn from the grid is counted against their credits.

California currently has its third net metering policy (NEM 3.0), which is a net billing tariff. The new rates are based on avoided costs, which is how much money the utility company saves by not producing that amount of energy itself.

Property Tax Exclusion for Solar Energy Systems

In California, your property taxes will not increase after you install a solar panel system to your home. This is protected under Section 73 of California’s revenue and taxation code. To qualify for the property tax exclusion, your solar system must be considered an “active solar energy system.”

California defines this as a system that uses solar devices, which are thermally isolated from living space or any other area where the energy is used, to provide for the usage, distribution or storage of solar energy. To see if you will qualify for the exclusion, read more at the State Board of Equalization website.

The Solar Investment Tax Credit

All American homeowners have access to the Investment Tax Credit (ITC) from the U.S. government for qualified clean energy property. Homeowners can receive a tax credit equal to 30% of the costs of a new, qualified home solar panel system, installed from 2022 through 2032.

You can apply for the tax credit by filling out IRS Form 5695 and include it with your tax return for the year in which you installed your system. The credit only applies to those who buy their solar system through a cash purchase or financing option.


Written by David Bartle, content marketing associate.
Edited by Peter Spannagle, vice president of product