California Solar Panel Cost in 2025

Updated April 2025

As of April 2025, the average cost of solar panels in California is $3.14 per watt, bringing the total cost of a typical installation to about $22,600 before incentives. When combined with the federal solar tax credit, that cost can be reduced to $15,820 after the first year.

The prices above are based on the average system size of 7.2 kilowatts (kW), which is equivalent to installing 18 400-watt solar panels. California is a bit more expensive than the average cost of solar panels in the USA, mostly because the state has higher labor costs than other places.

More resources about solar in California 

Factors that affect solar panel cost in California

The cost of solar panels for your specific home depends on several factors. These include:

• System size (aka the number of panels installed)

• The characteristics of your home and property

• Your eligibility for solar incentives

• Whether you add a solar battery to your installation

• Differences in the equipment used

• Local variations in installer expenses, like labor cost

Many different components add up to the final cost of a solar installation. Here’s a breakdown of where the money goes for an average California solar installation:

California solar panel cost for different system sizes

System size (or how many solar panels you need) is mostly determined by two things:

1. How much electricity you use during the course of a year, and

2. How much energy your solar panels will produce based on how sunny your location is.

In California, these factors vary by region, because solar panels can generate much more electricity per year in SoCal than they can in the rainy north. So you can install a smaller-sized solar installation if you live in Los Angeles than you can in Marin County, which can help lower your solar installation costs. 

Here’s a table that shows the average solar system size needed and cost based on the amount of solar power it can produce throughout the year:

Read more: What is a kilowatt and a kilowatt-hour?

Incentives that can reduce the cost of solar panels in California

California used to have some really great incentives for home solar. Unfortunately, these programs are mostly gone, and the state’s homeowners now have to rely on just the federal solar tax credit to reduce the costs of going solar. 

When you get solar panels installed on a home you own in the United States, the federal government will give you up to 30% of the cost you paid back as a tax credit, as long as you would have owed at least that much tax during the previous year. The credit can be claimed over multiple years if you owe less in taxes.

In addition to the federal tax credit, California excludes the value of your solar panel system from property taxes. The state also offers a battery rebate program called the Self-Generation Incentive Program (SGIP), which provides $150 per kilowatt-hour of home energy storage, and also includes new low-income solar incentive payments for 2025.

Cost differences based on equipment

On average, solar panels and inverters account for roughly 21% of the price of home solar, which equals about $0.65 per watt. But those numbers assume that you choose average-priced equipment. 

If you choose high-efficiency solar panels with a higher power output, you may end up paying more. These panels also often require more expensive microinverters that can handle their high power output. On the other hand, if you choose cheap solar panels, you might save a few hundred dollars on the total cost of your installation. 

When it comes to the equipment you choose, we feel that cost should only be a small part of the decision. That’s why we have a list of the best solar panels for home installations.

Cost differences based on local factors

California has some of the highest wages in the country, which increases the total cost of solar panel installations. Thankfully, the state also has the most mature solar market in the country, meaning many solar companies in California are highly efficient businesses that have lots of experience managing costs. 

Where you live in California also matters because of the local rules and regulations in your area, and how competitive the solar marketplace is. 

The cost of adding batteries to solar in California

If you’re a customer of one PG&E, SCE, or SDG&E, adding battery storage is the only way to ensure you’re saving the most money on your energy bills. 

These days, most solar companies can install a Tesla Powerwall battery for around $15,600. If you would prefer not to use Tesla products, you can choose a popular FranklinWH battery for around $2,000 more. 

If you have a solar energy system without batteries, you will likely end up sending energy to the utility company. Under NEM 3.0, they will only pay you a fraction of the cost they’ll make you pay to receive energy later in the day. Adding a battery ensures you can capture any excess electricity generated during the daylight hours and use it at night to avoid paying the high cost of utility energy.

When it comes to incentives, these solar batteries are eligible for $150 per kWh of storage capacity from the aforementioned SGIP program. Any battery larger than 3 kWh in capacity that is installed in connection with your home is also eligible for the 30% Residential Clean Energy Tax Credit, sometimes incorrectly called the Investment Tax Credit (ITC).

Different ways to pay for the cost of solar panels in California

The average cost estimates we used above are based on the price of rooftop solar panels if you paid the full cost all at once. You could do that with a cash purchase or with a loan from your bank or credit union. 

But there are other ways to pay for solar panels as well. Many companies now offer financing options like solar loans from banks like Mosaic and GoodLeap. These loans often come with fees that can add 20% to 40% to the upfront cost of the solar installation in exchange for a lower interest rate. In 2025, current rates for fee-free solar loans are around 8% APR.

Another way to pay for solar panels is called a power purchase agreement (PPA), under which you don’t actually own the solar panels, but instead pay a per-kWh fee to the installation company. The way you save money with this kind of arrangement is that the kWh from the solar company is cheaper than the kWh you would have bought from the utility company.

A solar lease works similarly, but instead of paying for each kWh, you pay a fixed monthly lease payment and get the benefits that come from using solar panels. Just make sure you get an annual energy production guarantee if you sign up for a lease to ensure the payments are worth it.

How to find the best solar companies in California

Californians are in a good position when it comes to finding high-quality solar installation providers, because the state has some of the most seasoned professionals in the solar industry. 

Make sure to get solar quotes from at least three companies. We recommend looking for a company with at least five years of experience that offers top-quality products, has good customer reviews, and performs its own solar installations and maintenance. 

Using a third-party warranty service like Solar Insure is also a plus.

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Are solar panels worth it in California in 2025?

While solar panels cost slightly more in the Golden State than the national average, a solar investment can be a very smart one. The state also has some of the highest electricity prices in the country, and the rate of increase in those prices is also very high.

Unfortunately, due to the way the Solar Billing Plans from PG&E, SCE, and SDG&E work, you can’t save the full value of a kWh of solar energy unless you can use it to power your home. 

Based on the current average cost of $22,600 before tax incentives and the average California electricity price of $0.33 per kWh, we estimate that a 7.2-kW solar installation will pay for itself in around 9 years. That leaves over 15 years of long-term savings after solar panel payback. 

And as a bonus, in California, NEM 3.0 makes it more advantageous to get a battery with your solar installation. A well-designed solar power system that includes batteries can cost $38,000 or more, but it will save you more on energy costs and result in lower utility bills.

We estimate that the solar payback period with a battery in California is 8 years, which means that despite the increased cost of the battery, the value of using more of your own solar energy is worth it.

Compared to the national average payback time of around 11 years, solar panels are absolutely worth their cost in California!

Calculate how long it will take for solar panels to pay for themselves with our California solar panel cost calculator