Benefits of Solar Energy
Solar energy has multiple advantages that will enhance your home for years to come.
- Better energy independence: Photovoltaic solar panel systems with energy storage systems operate through power outages and emergencies, and you won't have to depend on the power grid for your safety and comfort.
- Reduced carbon footprint: Using clean solar power lowers your dependence on fossil fuels, which release greenhouse gases that damage the environment.
- Lowered energy bills: Solar panels allow you to generate your own energy to power your home, reducing your monthly electricity costs. You can eliminate your bills completely if you go off-grid. Plus, a significant number of states have adopted net metering, which permit you to earn money by selling your unused energy back to the grid.
What Solar Incentives Are Available to San Jose Homeowners?
California's public agencies and power companies offer a range of solar incentives to help cut your solar system costs. Below is a breakdown of applicable solar programs where you live.
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: Leasing Program
Website: santaclaraca.govIncentive Type: Rebate Program
Website: cityofpaloalto.orgIncentive Amount:
Single-family residential gas-displacing systems: $18.59 per therm displaced
Single-family residential electricity or propane-displacing systems: $0.54 per kWh displaced
Multifamily and Commercial gas-displacing systems: $14.53 per therm displaced
Multifamily and Commercial electricity or propane-displacing systems: $0.42 per kWh displaced
Low-Income Multifamily gas-displacing systems: $19.23/therm displaced
Low-Income Multifamily Electric or Propane Displacing systems: $0.56/kWh 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 Jose
The purchase price and effectiveness of solar panels often hinge on which company mounted them. Make your choice based on the following key factors.
Licensing and Training
California requires solar companies to hold licenses for each type of equipment they install, which can include solar HVAC, boilers, water heaters, photovoltaic (PV) systems, and pool heaters. Contractors must complete a highly comprehensive educational series, gain four years of experience as an apprentice or journeyman, and pass written exams to secure a license. Check for private accreditations from the North American Board of Certified Energy Practitioners (NABCEP), one of the solar industry's most reputed trade groups. Its program includes certifications for both solar photovoltaic and water heating installers.
Cost of Solar Panels in San Jose
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 battery backups and electric vehicle (EV) chargers. These will increase your total installation cost, but they can improve your solar system's efficiency. Not every solar contractor includes these optional components, so look for a provider that sells them if it's essential for you.
Most San Jose homeowners select solar systems rated for five kilowatts (kW) of electrical capacity. These systems run about $17,350 to install, considering both materials and labor. You can find more specific solar cost information in the table.
Solar Panel Cost | Average Cost |
---|---|
Solar Monocrystalline | $1,961 |
Solar Polycrystalline | $1,530 |
Thin-Film | $894 |
Solar Battery | $1,255 |
Solar Home EV Charger | $4,707 |
Financing Solar Energy in San Jose
There are various ways to pay for a new solar system, and the right one will lower your costs. A few of the most common options include power purchase agreements (PPAs), cash payments, loans, and leases. We recommend paying with cash or using a solar loan for the best 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 minimize your total costs. Solar loans are another good 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 pay more in total due to accruing interest. Solar leases allow you to use your panels for a set monthly rate, while PPAs let you pay only for the energy you use, much like 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. Ask each installer you're considering about the payment plans it offers. A team member can help you determine the best option for your financial situation.
The table below lists the average payback periods for different capacities of solar systems in San Jose.
You are eligible for a 26% federal solar tax credit for new solar energy devices until the year 2032. Municipal and state governments and utility companies might also offer discounts, rebates, and unique financing solutions that could save you 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 Jose
How much money could I save by going solar in San Jose?
How widespread is solar energy in San Jose?
Should I expect a property value increase after installing solar panels?
How long does a typical solar system last?
How do I care for my new solar system?
What size should my new San Jose solar system be?
What's the difference between a PPA and a solar lease?
You don't own the panels with either option, though you can choose to "buy out" of the contract for a fee.
How many estimates should I get before making a final solar company decision?
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