Opening yet another steep electric bill has plenty of Bay Area homeowners taking a closer look at solar power. The next question is usually the same: How much is this actually going to cost?
Most Bay Area homeowners spend somewhere in the neighborhood of $18,000 to $25,000 on a residential solar panel system before incentives. The final cost does depend on a handful of factors, including your home, energy usage, and the equipment you choose.
Knowing what drives those costs makes it much easier to compare your options and decide whether solar makes financial sense for your home.
Every solar installation is a little different, so there isn’t a one-size-fits-all price tag. That said, most Bay Area homeowners can expect to pay around $2.60 per watt. That comes out to about $18,400 to $25,000 for a typical 8-kilowatt system.
Of course, that can vary based on the specifics of your setup, but based on that per-watt cost, different system size pricing shapes up like this:
System Size | Average Cost (Including Installation) |
6 kW | $15,600 |
8 kW | $20,800 |
10 kW | $26,000 |
12 kW | $31,200 |
14 kW | $36,400 |
16 kW | $41,600 |
*Average cost before any tax credits or incentives
Two homes just a few houses down from each other can get surprisingly different quotes for a new solar power system.
That’s because the cost of solar energy systems isn’t based on the panels alone. Every estimate hinges on things like the amount of electricity your home needs, the complexity of the installation, and how much equipment you’ll need to produce reliable power.
Some of the biggest contributors to your estimate will include:
The size of your system is one of the major drivers of cost. Solar systems are measured in kilowatts (kW), which represents the rate at which they can generate electricity. The bigger the system, the more panels, mounting hardware, wiring, and labor will be required to install it.
The size you’ll need depends on your electricity usage and home size. A small home with modest energy needs might only need a 4- to 6-kilowatt system. A larger home, one with electric vehicles, or families with high electricity needs often need systems in the 8- to 12- kilowatt range or larger. Bigger systems cost more upfront, but they also produce more electricity, which can mean better long-term savings.
Your past electric bills help determine how big your system should be. A household that uses 500 kilowatt-hours (kWh) each month will need a much different system than one using 1,500 kWh.
If you plan to get an EV charger for your vehicle, install a heat pump, or make other changes that will increase your electricity consumption, it’s worth discussing those plans during the design process. That way, we can make sure to account for your future energy needs when recommending a system size.
The specifics of your roof matter, too. A large, unobstructed roof typically provides more flexibility for panel placement than one with multiple dormers, skylights, or chimneys.
Steep roofs often require additional safety equipment and can take longer to work on, which raises labor costs. Roof condition is something to think about, too. If your roof is nearing the end of its lifespan, replacing it before installing solar panels may save you the expense of removing and reinstalling the system later.
Not all solar panels are built the same. You have a couple of options:
Most solar pros recommend monocrystalline panels. They are a bit pricier than the other options, but they maximize the amount of energy you can generate per square foot.
Solar panels generate direct current (DC) electricity, but your home runs on alternating current (AC). So, you’ll need something to convert the electricity you generate.
Some systems use a single string inverter, while others use microinverters installed beneath each panel. Hybrid inverters designed to work with battery storage are another option. Since each type comes with a different price tag, performance characteristics, and maintenance considerations, the one you choose will affect the overall price of the project.
Many Bay Area homeowners choose to pair their solar panels with battery storage. A battery stores the excess electricity your solar system generates through the day. If your panels produce more electricity than your home is using, you can store it for use after sunset, during peak utility pricing periods, or during power outages.
Adding battery storage will drive up your total cost, but it’ll also provide backup power and greater control over when you use the electricity your system generates.
You don’t have to get a battery, though. If your system generates more electricity than you can use, that extra energy usually goes back to the grid. Programs for this process vary based on your utility provider, but usually, in exchange for that energy, your utility provider will give you credits to use toward your next electric bill.
Every residential solar installation requires permits, inspections, and approval from the local utility before the system can begin producing power for your home.
Permit requirements can vary a bit based on which city you’re in, and interconnection procedures differ among utility providers. These are unavoidable steps in every professionally installed solar project and will be factored into the overall cost of the installation.
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If you decide to add a solar battery to your setup, you’ll likely add between $10,000 and $20,000 to the total cost. That number can vary based on the battery’s capacity, the equipment required, and the complexity of the installation. If you have a larger home or want to power more circuits during an outage, you might need multiple batteries, increasing the overall project cost.
There are various rebate and incentive programs available that may help reduce the cost of battery storage if your setup qualifies.
Solar incentives can significantly reduce the cost of installing a residential solar energy system. Some programs lower your upfront investment, while others help improve your long-term return through tax credits or utility bill savings.
Available incentives currently include:
Availability can vary, and programs change periodically. Some expire, new ones become available, and eligibility requirements may change over time. Because of that, it’s a good idea to check the current availability.
The amount you’ll save on your energy bills depends on a few factors, including your electric usage, the size of your solar system, your utility provider, and future energy rates. Homes with higher electric bills often see the greatest financial benefit because they’re offsetting more purchased electricity.
Solar panels also provide long-term value. Most systems can last 25 to 30 years or more, giving you decades of clean energy production. According to EnergySage, the average homeowner in San Francisco can save more than $124,000 over 25 years thanks to a properly sized solar energy system. Individual savings vary, but many find that lower monthly utility bills help offset the initial investment over time.
If you add battery storage, you could potentially save more by being able to use more of the electricity your system generates, particularly during periods of higher utility rates.
Every home is different, so there’s no universal answer. But for many homeowners, the answer is a resounding yes.
Currently, electricity is 39 cents per kilowatt-hour in the Bay Area, which is about 96% higher than the national average. Pair that with the incentive programs in the area, and solar often becomes a smart long-term investment.
Of course, it’s not the right choice for every home. A roof that’s shaded by mature trees won’t produce as much electricity as one with full sun. A household with modest energy needs may use a much smaller system than one with two electric vehicles and a pool.
The best way to find out if solar makes sense for your home is to get a personalized estimate. We’ll evaluate your roof, review your energy usage, answer your questions, and recommend a system that fits your goals and budget.
Having a solar system installed is a big project, so it’s natural to have questions. Here are some answers to a few of the most common questions our clients have.
Online cost guides are a great place to start, but every home is different. If you’re ready to get a custom quote for your home, Fisher Electric is here to help. We’ll take a look at your roof and energy needs to determine the right system size. We’ll also walk you through available incentives and discuss battery storage if you’re considering backup power.
Whether you’re in San Jose, Sunnyvale, or Felton, we’re here to help. Call us today at (831) 531-9800 to get started with a free consultation.
Feel free to leave your contact information on our online form. A consultation is always free, and it’s the first step towards finding expert electrical services!
