Is Solar Worth It in San Francisco?

Is Solar Worth It in San Francisco?

It’s a well-known fact that California has a fantastic climate, and San Francisco is no different. With 259 sunny days each year, it’s no wonder that homeowners all over San Francisco are ditching electricity and adopting solar energy systems. However, since this is quite an investment, one can’t help but wonder “Is solar worth it in San Francisco?”

This article will cover the average cost of solar energy system adoption and everything else you should know before investing in solar panels in San Francisco.

Average Cost of Solar in San Francisco

Many homeowners are choosing to “go solar,” whether it’s for money-saving or environmental purposes. The average cost of solar system installations depends on the state, varying from $12,000 to $25,000. When it comes to California, you can expect solar system installations to be between $12,000 and $16,000.

For San Francisco, the average solar panel cost amounts to $2.99 per watt. Considering that a typical solar energy system runs on about 5 kilowatts in San Francisco, the average cost of solar panel installation ranges between $12,096 and $14,783. Keep in mind that these numbers don’t include the Federal Solar Tax Credit deduction or any other local solar incentive program. If you were to claim the 26% Federal Solar Tax Credit, the overall average amount would then be somewhere around $11,000 to $12,000.

Such is the level of investment, it makes you wonder – Is solar worth it in San Francisco? Before answering this question, it’s important to consider the numerous benefits of adopting this form of energy.

Not only is installing solar panels an environmentally friendly decision, it will also save you money in the future. Solar power systems are, after all, a long-term investment. One might be surprised to learn that the average electricity bill in San Francisco is 29% higher than in other cities in the US, as well as the national average rate.

By switching to solar energy, you will save money through the so-called “solar payback” period. It refers to the amount of time it takes to see a return on your initial investment through electricity savings. It’s estimated that you would be able to save $74,115 to $90,585 in the next 25 years by not having to pay an electricity bill. According to these statistics, you would be able to complete the solar payback period within four to six years, which is much shorter compared to other cities and states.

Solar System Cost per Power Output in San Francisco

The average cost of a solar panel system depends on how many kilowatts it requires to function. Here’s an outline of the average costs of solar panel installation per system size in San Francisco in 2021:

  • 3 kW – $8,970    
  • 4 kW – $11,960  
  • 5 kW – $14,950  
  • 6 kW – $17,940  
  • 7 kW – $20,930  
  • 8 kW – $23,920  
  • 9 kW – $26,910  
  • 10 kW – $29,900               

Note that these statistics may be subject to change. Also, the Federal Solar Tax Credit and other local incentives, tax credits, and rebates haven’t been included here. In other words, if you were to apply these deductions, the average solar system cost would be reduced even more.

For example, for a property that requires 6 kilowatts, the average solar system installation cost would amount to $17,940. However, if you were to apply the 26% Federal Solar Tax Credit, you would only need to pay $13,276 for the whole investment.

The good news is that the average cost of residential solar installation is decreasing. In fact, 10 years ago, a 6-kilowatt residential solar system could amount to an average of $50,000. The solar system installation fees have been reduced greatly since then, especially in the past couple of years. Today, you can install a solar power system in a residential home for as little as $12,000, which marks a 62% average annual decrease.

Is Solar Worth It in San Francisco

Solar Incentive Programs in San Francisco

If you’re thinking about adopting a solar panel system in your home, and you’re afraid it might be too expensive, there are ways to reduce the overall outlay. This is where federal and local incentives come in. They were introduced by local governments and solar utility companies to encourage homeowners to switch to solar power.

Here are some solar incentives and rebates that you can apply for as a citizen of San Francisco.

Federal Solar Tax Credit

The Federal Solar Tax Credit, or the Incentive Tax Credit (ITC), reduces the total amount of your solar investment by 26%. To be more precise, the total amount of the tax credit is subtracted from your federal taxes. This solar incentive can help you save thousands of dollars.

Keep in mind that the 26% tax incentive will only be available until the end of 2022. After that date, you’ll only be able to reduce your tax credit by 22%. Also, only those who pay federal income taxes are eligible for this solar incentive.

Net Metering

Net metering is another option for those who want to get some extra credit for their investment. It basically works by selling back the solar energy that’s not being used to the utility company in return for credit at retail rates. Since net metering is a statewide incentive, your current location will determine the number of credits you receive.

This incentive only applies to SDG&E, PGE, SCE, and other major investor-owned utilities. For instance, SFPUC customers won’t be able to take advantage of the net metering incentive.

Factors That Impact the Price of Solar Systems

Not counting the installation fees and the necessary equipment, there are many factors that can affect the overall cost of solar panel installation in San Francisco.

The most important aspect of solar power systems is the average energy consumption level per household. Naturally, the more energy a household uses, the higher the cost. The same goes for the size of your home. The bigger the residence, the more solar panels you’ll need to cover its energy requirements.

You’ll also need to set some money aside for installation and permit fees, without which you won’t be able to go through with the project. Other factors, like the region’s sunlight exposure and the general cost of electricity should also be taken into consideration.

The type of materials you use will also determine the price. When it comes to solar panels, you can choose between monocrystalline and polycrystalline panels, though the first option pays off more. Not only the solar panels, but the quality of the entire installation can have an impact on the overall price.

All of these factors aside, the more you invest in high-quality solar panels, the longer they will last. With proper maintenance, your solar power system can last for 20 to 25 years. If you choose a solar installation company that offers cost-effective quotes, this might create problems for you in the future, in terms of repairs and malfunctions. For this reason, solar power systems shouldn’t be viewed as an expense, but an investment that will eventually pay off.

Is Solar Worth It in San Francisco

Considering the fact that California has the highest solar capacity in the US, with more than 21,000 megawatts of installed solar power systems, San Francisco is the ideal location for solar energy investments. There are many factors that contribute to San Francisco being the opportune place for solar energy systems.

For starters, San Francisco enjoys the sun 259 days of the year. The excellent weather conditions, the 26% Federal Solar Tax Credit deduction, and the fact that solar power has never been cheaper, makes San Francisco the ideal location for solar investments.

There are many more advantages to installing solar panels in San Francisco. For instance, you’ll be able to protect your home from power outages. You might not find this factor important, but did you know that there were 4,297 power outages in California from 2008 to 2017?

Not to mention that switching to solar power will reduce your carbon footprint to a high degree and make your house eco-friendly. In the long run, you’ll be able to save a lot of money that would be spent on electricity bills. All in all, solar investments are definitely worth it in San Francisco.

The Golden State’s Solar Power

Not only is solar worth it in San Francisco, but it’s also one of the best places to invest in solar energy. San Francisco has an excellent solar capacity, so you will be sure to get your money’s worth. By installing a solar power system in your home, you will also make significant electricity savings. Most importantly, when you use solar energy, no greenhouse gas emissions will be released into the atmosphere.

Hi there! I'm Ally, I can help you find out if solar makes sense for your home in 30 seconds!

See if your home qualifies and how much you could save with current programs available...

Hi there! I'm Ally, I can help you find out if solar makes sense for your home in 30 seconds!

See if your home qualifies and how much you could save with current programs available...