Benefits of Solar Energy
Solar energy comes with multiple benefits. Here are some highlights.
- Reduced carbon footprint: Solar is the universe's most abundant clean energy source, meaning you can reduce or eliminate your home's dependence on "traditional" sources.
- Better energy independence: Solar panel systems with battery backups and storage systems function through power outages and emergencies, and you won't have to rely on the power grid for your safety and comfort.
- Lowered energy bills: You can dodge the added cost of grid-tied power by generating some electricity at home. Plus, many states provide net metering which can allow you to sell your unused energy back to credit part of your bill.
What Solar Incentives Are Available to San Francisco Homeowners?
Governments and utility companies often reward homeowners for switching to solar. Here are some of the rebates, tax credits or other programs you could qualify for.
Incentive Type: Property Tax Incentive
Website: boe.ca.govIncentive Amount:
100% of system value; 75% of system value exemption for dual-use equipment
Incentive Type: PACE Financing
Website: wrcog.usIncentive Amount:
Eligible products can be financed for up to 25 years, depending on the useful life of the eligible product.
Minimum financing: $5,000
The financing may not exceed fifteen percent (15%) of the market value of the property, up to the first seven hundred thousand dollars ($700,000) of the property’s market value, and ten percent (10%) of the remaining value of the Property above seven hundred thousand dollars ($700,000) minus any PACE assessment on the propertyThe total amount of any annual property taxes and assessments shall not exceed five percent (5%) of the property's fair market value, determined at the time program financing is approved.
Incentive Type: PACE Financing
Incentive Amount:
Locally determined
Incentive Type: Rebate Program
Website: selfgenca.comIncentive Amount:
For projects 30 kW or larger, 50% of incentive will be received up-front; 50% will be received based on actual kWh production over the first 5 years. For projects under 30kW, 100% of the incentive will be paid up front.
Incentives will step down over time. See below for incentive amounts.
Incentive Type: Feed-in Tariff
Website: cpuc.ca.govIncentive Type: Feed-in Tariff
Website: ladwp.comIncentive Amount:
$0.17/kWh adjusted by a time of delivery multiplier
Base price will step down over time as certain MW goals are met
Incentive Type: Rebate Program
Website: gosolarcalifornia.ca.govIncentive Amount:
Step 1 Incentive Rates (contact utility to determine current incentive levels):
Single Family Residential Incentives:
Systems that displace natural gas: $29.85 per estimated therm displaced
Systems that displace electricity or propane: Funding has been exhausted
Commercial/Multifamily Incentives:
Systems that displace natural gas: $20.19 per estimated therm displaced
Systems that displace electricity or propane: $0.42 per estimated kWh displaced *** Note, funding has been exhausted in this category for SCE and PG&E
Solar Pool heating: $5.00 per estimated therm displaced
Incentive Type: Personal Tax Credit
Website: ecowatch.comIncentive Amount:
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.
How To Choose the Best Solar Company in San Francisco
The price and efficacy of solar panels often rely on which company mounted them. Here are some essential aspects to consider while searching for a solar company.
Licensing and Training
California requires solar companies to hold licenses for each type of equipment they install, which can include solar HVAC, boilers, photovoltaic (PV) systems, pool heaters, and water heaters. Contractors must take a highly comprehensive educational series, gain four years of field experience, and pass written exams to earn licensure. You should also visit a company's website to learn about its private credentials. Two of the most recognized are the Solar Heating Installer and PV Installation Professional certificates, granted by the North American Board of Certified Energy Practitioners (NABCEP). Some companies don't publish this information online, so you should also ask your estimator about them.
Cost of Solar Panels in San Francisco
Different solar panel types look and perform differently. Monocrystalline panels cost more than other options, but they generate the most power and generally have the highest quality. Polycrystalline panels produce less power, but start at a more budget-friendly price point. Thin-film panels work well for small projects like RVs and sheds, but they're not ideal for larger installations due to their low performance.
You can also add electric car (EV) chargers and battery backup systems. These will increase your total installation cost, but they can improve your solar system's performance. Not every solar contractor offers these additional features, so look for a provider that installs them if it's essential for you.
You can plan to spend about $17,350 on average for a five-kilowatt solar energy system in San Francisco. Use the table in this section to get an idea of what amount San Francisco solar companies might quote for your specific solar system's price.
| Solar Panel Cost | Average Cost |
|---|---|
| Solar Monocrystalline | $1,359 |
| Solar Polycrystalline | $1,060 |
| Thin-Film | $620 |
| Solar Battery | $869 |
| Solar Home EV Charger | $3,261 |
Financing Solar Energy in San Francisco
Choosing the best financing plan will affect your overall solar system cost and possible savings. Common payment options include power purchase agreements, cash payments, leases, and loans. We recommend making a cash payment or using a solar loan for the highest return on investment (ROI). Cash payments require a hefty sum up-front, but you’ll pay the least long-term by avoiding interest. You’ll also have full ownership of your system and can apply for solar panel incentives to reduce your total costs. Solar loans are another solid option if you don’t want to make a big initial investment. You can pay for your system in installments while still enjoying energy bill savings and solar incentives. However, you’ll spend more in total due to accruing interest. Solar leases allow you to rent your panels for a set monthly rate, while PPAs let you pay just for the energy you use, akin to an electric bill. Both options disqualify you for solar incentives and don't grant you system ownership. Solar experts generally don't recommend them, but they might be suitable in some cases. Look for contractors that offer multiple payment plans to find the right fit for your financial needs.
The table below lists the average payback periods for different capacities of solar systems in San Francisco.
You can claim a 26% federal solar tax credit from the IRS for new residential solar systems purchased before 2032. Additionally, local governments and utilities may have their own rebates and financing plans that could reduce your total cost even more.
| Solar System Capacity | Estimated Payback period |
|---|---|
| 1 kW | 1.4 years |
| 2 kW | 2.7 years |
| 5 kW | 6.8 years |
| 10 kW | 13.7 years |
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Frequently Asked Questions About Solar in San Francisco
How much energy and money could I save per year by switching to solar?
How popular is solar energy in San Francisco?
Should I anticipate a boost in my property value after installing solar panels?
What if I live in a gloomy or dark
What is a San Francisco solar panel's average lifespan?
What size should my new San Francisco solar system be?
What's the difference between a PPA and traditional financing?
You might consider a PPA if you don’t want to be responsible for maintenance and don’t want to invest in a system, but keep in mind you won’t be paying toward ownership or be able to access any solar financial incentives. Many solar experts don’t recommend PPAs. Our guide covers other payment options above.
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