If you live in the city of Los Angeles, then you are no stranger to high electric bills and plenty of sunshine. Why not use that sunlight to help pay for your energy bills? That’s where a solar panel investment comes in.
Los Angeles is the nation’s leading city for installed solar capacity, with almost 650 megawatts of solar power in 2021, according to the Environment California Research & Policy Center’s Shining Cities 2022 report.
According to the Los Angeles Department of Water and Power, solar energy is the city’s most abundant renewable power source. The LADWP has extensive plans to continue expanding solar energy across the city.
The average California energy bill tends to be higher than the national average, according to CNET’s corporate partner, SaveOnEnergy. Rising electricity costs are a primary reason why many Angelenos invest in solar panels for their homes. Based on data from the Energy Information Administration, California electricity rates in June 2022 were 25% higher than in June 2021.
According to a report from the Lawrence Berkeley National Laboratory, the cost of solar panels has decreased by 69% nationwide since 2000. In Los Angeles, there are a variety of tax credits and incentives that can help bring the cost of solar panels down even more.
Los Angeles solar panel costs
Several factors can influence the cost of a solar panel system, including the system size, available tax credits or rebates and installation costs. In Los Angeles, the average cost of a solar panel system is lower than the US average because California solar panel systems are normally smaller than systems in other states.
Here’s a breakdown of the average size and cost of solar panels in California and nationwide based on 2022 data from Findenergy.com and consulting firm Wood Mackenzie.
California compared to the country
| System size (kW) | Price per watt | Total cost | |
|---|---|---|---|
| California | 5 | $3.93 | $19,659 |
| Nationwide | 8 | $2.99 | $23,920 |
While the cost of solar is much lower than it was a few years ago, it is still a hefty investment. Thankfully, many financing options are available, including solar loans, making the purchase more attainable for Los Angeles residents. Some solar companies offer solar leases or power purchase agreements, which significantly reduce the upfront cost but don’t offer the same benefits as owning your system.
Los Angeles solar panel incentives and rebates
Los Angeles residents can take advantage of various solar tax credits, rebates and incentives to make solar panels more affordable. Some solar incentives are available across the state, while others are specific to Los Angeles.
The Residential Clean Energy Credit (originally called the Investment Tax Credit) is a federal tax credit for 30% of the total purchase price of a solar system back to residents when they file their income taxes. In August 2022, the Inflation Reduction Act was passed, which increased the amount of this tax credit (up from 26%) and extended it through 2032. The credit will decrease for the following two years before expiring at the end of 2034. This tax credit could save Los Angeles residents up to $6,580 on a 5.7 kW system, based on California’s average solar panel system cost.
There are many other solar credits and incentives available in Los Angeles. You can find a complete list in the Database of State Incentives for Renewables and Efficiency. Here are a few solar incentives available in Los Angeles that you should know.
| Program | Description |
|---|---|
| Net Metering Programs | Los Angeles utilities offer net metering programs, which allow residents with solar panels to sell extra solar energy back to the grid. In December 2022, California voted to pass a new version of net metering (NEM 3.0), which significantly cuts the rate offered through net metering. Residents who install solar systems before April 15, 2023 can lock in NEM 2.0 rates. If the perks of net metering are important to you, consider applying for permission to operate your solar system before April 15, 2023. |
| Property Tax Exclusion for Solar Energy Systems | Solar panels typically https://ift.tt/g6e1lJfincrease a home’s value. This program prevents your property taxes from increasing based on the higher home value after you install solar panels. |
| Self-Generation Incentives Program | SGIP offers a rebate to consumers who pair energy storage technologies, like solar batteries, with their solar panels |
How to pay for solar panels in Los Angeles
As with any major purchase, you will want to think about how to finance the cost of solar panels. Keep in mind, the money from the tax credit won’t be yours until after you’ve filed your taxes for the year the panels are installed. It’s also important to factor in the solar payback period, which is the time it takes to recoup your upfront investment and when savings begins.
Here are some ways to pay for solar panels:
Solar loan: Your solar installer likely has a relationship with a bank or other financial institution to offer a loan designed for solar panels. This can be a great deal, but you’ll want to get multiple offers to ensure the rates and terms are the best.
Home equity: You don’t have to use a loan from your solar company. Financial institutions offer home equity loans and lines of credit (or HELOCs) that are commonly used for home improvement projects. These loans can be used for basically any purpose, and they may be a good fit for your solar project. Shop around and make sure you’re getting the best deal.
Cash: This approach only works if you happen to have thousands of dollars sitting around in a bank account. If you don’t have that yet, but you want solar panels in the future, consider saving money in a high-yield savings account. Interest rates are high right now, and this can help you save faster.
Lease or power purchase agreement: Some solar companies allow you to lease your system or enter a power purchase agreement. If you choose to lease, you won’t own the solar system, you’ll just pay for use of the equipment. Entering a power purchase agreement means you’ll buy solar energy generated from the solar company to power your home. The price you’ll pay is usually lower than the retail rate from your local utility company. Note that not all incentives are available with a lease or power purchase agreement.
Personal loan: You can also borrow the money through a personal loan. The main difference between a personal loan and a home equity loan is that a personal loan is typically unsecured. That means your house isn’t at risk. The downside is they tend to have shorter terms and higher interest rates than home equity products.
Los Angeles solar panel companies
With the popularity of solar in Los Angeles, there are many companies that you can choose from when getting quotes. The Solar Energy Industry Association offers a database of solar companies nationwide, including companies local to Los Angeles.
We’ve created a list of solar panel companies that stand out from the competition. Here are a few solar installers operating in Los Angeles to consider.
ADT Solar
ADT Solar (formerly Sunpro Solar) sells solar panels and batteries in Los Angeles. This installer offers 25-year labor and manufacturer warranties and a 25-year power production guarantee. Another benefit to ADT Solar is a price-match guarantee for installation costs.
ADT Solar only offers solar panels for purchase and does not offer solar leases or PPAs. It sources its solar products from several manufacturers and is committed to providing 25-year manufacturer warranties and a 25-year production warranty from ADT.
Palmetto Solar
Palmetto Solar offers solar panels for purchase as well as solar leases and PPAs, although most of Palmetto’s customers choose to purchase their solar systems. It is one of the largest solar companies in the US and operates in the Los Angeles area.
This solar company’s approach to customer service differs from many competitors because it offers a subscription called Palmetto Protect. Customers receive monitoring for the performance of their system and tiered levels of support based on their subscription level. Solar panels from Palmetto have an efficiency rating of greater than 19.8%. The company also extends a minimum 12-year product warranty and a 25-year performance warranty.
Solar Optimum
Solar Optimum has a smaller service area than the other companies on this list, focusing its business in California and Nevada. Still, its products and terms of service remain very competitive. This California-based company was awarded the Panasonic National Installer of the Year for the second year in a row in 2021.
Solar Optimum’s warranties are more extensive than some of its competitors: It offers 25-year warranties on products (including solar panels, inverters and mounting equipment), as well as 25-year warranties on quality and performance. These warranties are transferable, meaning if you sell your home, the warranties can transfer to the new homeowner. Through Solar Optimum, you can also purchase solar batteries to pair with your system.
SunPower Solar
SunPower Solar operates across most of California, including Los Angeles, and offers solar panels with some of the highest efficiency ratings on the market. The SunPower Equinox solar panels have a 22.8% efficiency rating, outranking many of its competitors.
With the SunPower Equinox package, you will receive solar panels from Maxeon (a solar panel manufacturer), Enphase microinverters and mounting equipment. SunPower guarantees 92% production capacity for 25 years.
Sunrun
Sunrun offers an extensive selection of solar equipment in Los Angeles. Most Sunrun consumers choose to lease their solar systems instead of buying them. It’s important to note that solar leases have their own pros and cons. On the one hand, leasing a system is more affordable upfront and makes solar more accessible. However, if you lease your system, you won’t qualify for most solar tax credits and incentives, and you will see lower energy savings in the long run. Sunrun does offer solar panels for purchase as well.
For those who choose to lease their solar system from Sunrun, the company offers “bumper-to-bumper” maintenance and monitoring coverage. Sunrun also extends a 10-year quality of work warranty, which covers any damages to your roof or installation issues.
Tesla Solar
In 2016, Tesla purchased SolarCity, allowing the company to significantly ramp up its installation capacity nationwide. Tesla has two branches of its solar panel business: Tesla solar panels and the Tesla Solar Roof. The cost, efficiency and warranty terms will depend on the solar system you choose from Tesla.
The Tesla Solar Roof comes with a 25-year product and performance warranty guaranteeing 95% capacity after five years and 85% capacity after 25 years. A Tesla Solar Roof costs much more than Tesla solar panels.
Even though Tesla solar panels are cheaper than the Solar Roof, they don’t sacrifice quality. Solar panels from Tesla have an efficiency rating ranging between 19.3% and 20.6% and come with a warranty set at 85% capacity after 25 years.
Installation factors to keep in mind
Before purchasing solar panels, it’s important to do some research and make sure it is the right decision for you. Here are a few installation aspects to consider first:
- What’s the condition of your roof? Your roof is an important factor in installing rooftop solar panels. Its size, shape and slope can impact how much electricity a solar system can produce. If your roof is older or in need of repairs, you may need to get it replaced or maintained before it can handle the installation of solar panels. The Department of Energy states that roofs with a slope between 15 and 40 degrees will allow a solar panel system to achieve peak efficiency.
- Where are you located? While solar panels can still operate in areas with indirect sunlight, they’ll be most efficient when they receive direct sunlight for at least four hours per day. Los Angeles typically gets 283 sunny days yearly, higher than the national average of 205 sunny days. However, if your home has a lot of shade coverage, a solar panel system will not generate as much power as it would in direct sunlight.
- Are there HOA and neighborhood regulations? In California, a law prohibits HOAs and neighborhoods from banning rooftop solar panels, so you won’t need to worry about whether solar is allowed in your neighborhood. However, your neighborhood could have specific requirements regarding aesthetics or installation. Be sure to research what is required in your neighborhood before you sign a contract.
- Do you rent your home? Consumers who live in apartments or rental homes may not be allowed to install solar panels. You can ask your landlord or rental management company whether solar is permitted. If not, community solar programs are an alternative to installing rooftop solar. These let you subscribe to power generated by solar panels at another location and receive a credit on your energy bills. The subscription fee is set at a lower rate than your credit value, so you benefit each month. Across the state of California, community solar is expected to expand rapidly due to new regulations.
Los Angeles solar power FAQs
How long do solar panels last?
On average, solar panels have a lifespan of between 20 and 30 years. Factors including the quality of the product, climate and maintenance can impact the lifespan. If you have a technician perform routine maintenance on your solar system, the panels could last longer than 30 years.
Are solar panels required in Los Angeles?
There is a mandate in California requiring new construction single-family homes and multiple-family homes up to three stories high to install solar panels. This mandate took effect in 2020 and applies to new homes in Los Angeles. Under this requirement, new construction homes must include a solar system that covers all of the home’s energy needs, which are calculated based on the area’s climate and the home’s square footage. Homes built before 2020 are not required to install solar panels.
How can I find a solar installer in Los Angeles?
Because Los Angeles is one of the leading cities for solar, it makes sense that there is a high number of solar companies operating in the city. If you are looking for a solar installer in Los Angeles, take your time to thoroughly research your options. Ask for quotes from multiple companies and read customer reviews and testimonials before signing a contract. You can review CNET’s picks for top solar companies if you need a place to begin your research.
All You Need to Know About Solar Panels in Los Angeles – CNET
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