Costs and Savings:
The Economics of
Residential Solar

California is an ideal location for solar energy production. Significant incentives are available to homeowners that make going solar far more than just an environmental and socially responsible opportunity.

The Cost of a Residential Solar System

The price of installation for a solar system can vary significantly depending on the size of the system (thus power generated) and complexity of construction. In terms of dollars spent vs. dollars saved, most residential solar systems pay for themselves within 7 to 10 years. Costs for residential systems start at approximately $12,000 (after rebate).

Cost Breakdown

Solar panels and inverters, the primary components of a solar system, make up the majority of the purchase price. As an industry leader, Sol Casa Solar has direct relationships with several premium component manufacturers and is able to leverage our purchasing power and pass these savings on to our customers. We provide quality solar products and services at fair and competitive prices. Sol Casa Solar only uses proven products and builds systems to last. Our systems produce electricity efficiently, silently, and reliably for decades to come.

Government Incentives

Significant financial incentives are currently available to encourage adoption of renewable energy in California. The California Solar Initiative (CSI) offers a rebate, which covers 20–30% of the total system cost.

Residential solar systems are also currently eligible for a $2,000 federal tax credit.

Reduce or Eliminate Your Electric Bill

By investing in solar for your home, you are able to set the price of your future electricity for up to 25 years. Your solar system will help offset the highest tier electric cost, with the potential to reduce your bill by 75% or more.

Protect Yourself From Rising Electric Rates

Electric rates in California have historically increased by more than 6% per year, however high energy users have seen substantially greater increases. Due to a sharp rise in demand, electricity prices are escalating all over the world. Diminishing domestic resources, raising fuel prices and new environmental protocols, further accelerate energy inflation and the destabilizing of energy markets.

Add Value to Your Home

A solar  system will increase the value of your home by the pre-rebate amount of the system, without increasing your property taxes. The Real Estate Appraisal Journal demonstrated that the property resale value of a solar system to be 20 times the annual cost of energy saved.

Solar Power is Cheaper

Investing in a solar  system is equivalent to prepaying for 30-40 years of electricity at a fraction of the cost you currently pay. In terms of dollars-per-kilowatt-hour ($/kWh), solar energy is much cheaper than what you are charged by your utility. As utility rates continue to rise, the savings becomes greater over the life of a solar system.

Renting vs. Owning Your Electricity

Investing in solar is a way to buy your future electricity at a fraction of the cost you would pay to your utility. Generate your own power with the purchase of a clean and reliable solar energy system.

Imagine if you could have purchased 30 years worth of gasoline at $0.60 per gallon in 1978? By owning a solar  system, you can control your electric rates for the next 30 years.

Financing

Financing options are available with attractive rates and flexible term options – including no money down. Equity-based loan payments are often equal to or less than your current electric bill, however the interest on the payments can be tax deductible. After incorporating state rebate and tax-credits, many homeowners are able to finance a solar system and instantly improve their homes' debt/equity value. Sol Casa Solar has several finance partners and can help you understand all of your economic options.

A residential solar system is a low risk, high return investment competitive with higher risk investments such as stocks and bonds.

Solar  compares favorably to other home improvement investments, such as deck additions, kitchen and bathroom renovations, and window replacements, which typically improve resale value worth about 75%-100% of the cost. Further, there are very few investment products that guarantee performance for 20+ years.

Net Metering and Time of Use

According to the California Net Metering Laws, when your solar system generates more electricity than consumed, you export energy to the grid and receive credits at retail electric rates. Electric rates are also available to solar customers – which place a premium value/cost of energy in the middle of the day during summer (M-F). Employing these two strategies, solar customers not only avoid purchasing high-priced energy, but they can sell excess energy back to the utility at premium rates. Often the ratio of buy vs. sell is greater than 3-to-1 in the solar customers favor.

California Tiered Pricing For Electricity

For most utilities in California — the more electricity you use (kWh / day), the more you pay ($/kWh). See the rising costs of each tier of residential rates since 2001 in the sample below.

PG&E Tariffs

Most residential customers in California are billed on a tiered rate structure, effectively charging high-usage customers more expensive rates ($/kWh) than low usage, or average, customers. Your energy rate, and thus your total cost of electricity, is based upon the total amount of energy consumed per day. The baseline amount of energy provided is the least expensive power, but as you consume more, the rates can escalate to almost 350% percent of the baseline prices. For example, from 2005 to 2008 in PG&E territory, Tier 5 rates increased nearly 70%, causing bills for the highest energy consumers to rise by as much as 30-50%. Fortunately, a solar system offsets the highest priced power first and leaves the customer only paying for the least expensive power that they consume.

Sunshine and Time

While insolation levels (amount of sunlight per square foot) can vary seasonally, solar generation capacity is very predictable on a long-term basis. We can estimate the financial benefits and cost/savings analysis we provide to all clients. These models are based upon the National Renewable Energy Labs studies.