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Bay Area Solar Power for your house – rebates, tax credits, savings

Avatar for Ben Zientara
Written by
Published on 04/27/2015
Updated 08/30/2019

Welcome to the Bay Area Solar Power Information Page

If the San Francisco Bay Area was its own country, it would be the 99th most populous in the word, coming in just behind Switzerland. All those people need a whole lot of electricity, and PG&E is there to provide it. At great cost to its customers!

That high cost is why thousands of homes in the bay area already have solar installed. So why not get yours, too? San Francisco even offers special rebates off the cost of your system! Read on to learn a little bit about the financial ins and outs of going solar in the Bay, or just connect with one of our local partner installers and get a customized quote for how much you can save with solar!

Now let’s look at an example of average return on an investment in a 5kW solar system in The Bay Area!

Investing in Home Solar in The Bay Area

Bay Area Solar Leases, Solar Loans, and more!

What if you don’t have $20,000 lying around to pay for solar? Unless you’re fully vested in options from your time spent working at Hooli, you probably don’t, so let’s look at other options! Banks and third-party installers are recognizing what a good investment solar is, so they’re offering loans and leases and other ways of paying for it. Let’s examine a couple of the most popular financial tools:

Solar Leases in The Bay Area

When you choose a solar installer in The Bay Area, you’ll likely have the option of leasing your solar panels. It’s a great way to put no money down and get the benefits of solar starting right away. You sign an agreement to make a monthly payment for the panels on your house and your electricity bill is reduced by more than the cost of the lease. But you may be left wondering, “Is a solar lease a really a good deal”?

Well, if you can sign a long-term agreement with a fixed monthly payment, yes! As an example, a 25-year lease of a 3.5-kW system with a starting monthly payment of $66.67 ($800/year) will save you $1,578 on electricity this year, same as buying the panels yourself but with no money down. And as the price of electricity goes up, you’ll save more and more every year until the end, because your costs stay the same! By the end of our 25-year estimate, you’ll have saved $26,768, all without putting down a dime!

Solar Loans in The Bay Area

Many banks and credit unions now offer unsecured loans for installing solar. It can be a great way to install solar with nothing down, but beware the interest charges! If you agree to pay your system off over 20 years at 6.5%, you’ll actually end up paying more than your current energy bill for about 9 years, but you’ll still end up saving about $22,000 over the 25-year life of your system.

But! If you pay the loan down early with your big federal tax credit at the end of year one, you’ll actually come out ahead of the lease and do pretty well compared to the cash purchase option. You’ll still pay slightly more than your current energy bill for 9 years, and after that, it’s all profit, baby! 37,000 smackeroos!

If you can get a lower interest rate, it becomes an even better deal. Anything around 4.75% and below will see you making a bigger profit than the people who buy outright, all without spending a cent up front. Take another look at how the different payment options stack up visually above in the chart.

Example 5-kW Solar Installation ROI in The Bay Area

What do all these numbers and all this policy amount to for your finances? Let’s take a look:

  • Installing a typical 5kW solar system in The Bay Area should start at about $20,000. Don’t worry – that’s going to drop quite a bit.
  • The Feds will give you a 30% tax credit at the end of the first year. That means a quick savings of $6,000. And you can take the credit over two years if you don’t owe $6,000 in taxes in one.
  • Next, subtract your first year’s energy savings, which we estimate to be about $1,578. That brings your final cost for solar power after the first year to $12,422. That’s over $7,500 less than the starting price!
  • With a conservative estimate of 3.5% per year for the future rise of electricity prices, you can expect your new solar power system to pay for itself in about 8 years.
  • Over the 25-year life of the system, you’ll profit to the tune of $43,500.
  • And don’t forget .. your home just increased by more than $28,000 (your expected annual electricity savings over 20 years) and you won’t pay taxes on any of it!
  • What’s that? Money green isn’t enough for you? Us either! The fossil-fuel produced electricity you’re not buying from GiantCo Power is the same as planting 134 trees this year (and every year for the next 25 or so)!

Our Solar Strategy for a Home in The Bay Area

If we were interested in going solar in The Bay Area, the first thing we’d do would be to get quotes from trusted local installers (obviously). Then, we’d shop around for loans. We’d look at HELOCs, PACE financing, and others to find the best rates and terms. Something under 5% interest with a 20-year term would be ideal. Then we’d sign some papers and get the solar party started!

We’d sign up for net metering from PG&E, prepare all the documents necessary for our federal solar tax credit. By the end of the first year, we’d put all the tax credit money into the loan, which would shorten our payback time by 8 years and 7 months. With the low interest rate on our loan, our payments would be just about the same as our energy bill savings—at least for the first several years—but then we’d start making money, and that would continue for the next two decades, ultimately leaving us with tens of thousands in profit.

What a beautiful world.

Other Important The Bay Area Solar Policy Info

Single-Family Affordable Solar Homes Program (SASH)

This unique incentive is only available for lower-income families (you need to earn 80% or below of the median family income in The Bay Area), and you also need to live in a home that’s classified as affordable housing. If you qualify, you’re in luck—you may be able to get a rebate that covers the entire cost of your new solar system! The size of the solar rebate is based on your income level. Learn more at the Grid Alternatives website.

Property Tax Exemptions for Solar in The Bay Area

The state of California exempts solar installations from property tax. That’s great news, since the value of your home will go up by several thousand dollars when you add solar panels—if you reduce your electricity bill by about $1,000 per year, you can estimate that you’ve increased the value of your home by $20,000. All of that new value won’t be taxed.

The Bay Area Electricity Prices

Electricity from PG&E starts at “expensive” and goes up to “insane” depending on how much you use. Even households who do their best to conserve energy often end up spending $0.17 per kWh or more. Good news though: your rooftop solar system will be feeding energy back onto the grid and bringing your bill down into the lower tier. The more they charge, the more you’ll save.

Remember that these figures are estimates. Your home is unique, and how much money solar will save you depends on that uniqueness. Thankfully, we know some experts in The Bay Area. Just sign up for personalized savings estimates and one of then will be more than happy to go over all those details and help you craft a plan to get the maximum savings from a solar power system in your home. Your quote is 100% free, so go ahead and shop around… grab two or three, or five, and compare all your possible options.

Last modified: August 30, 2019

6 thoughts on “Bay Area Solar Power for your house – rebates, tax credits, savings

  1. Avatar for Anonymous Anonymous says:

    I find this ROI discussion so ammusing.,

  2. Avatar for David Henschel David Henschel says:

    For businesses, it becomes a capital expense, which can be amortized over a period of time. Also, it gets added to the basis of your purchase price or amount invested into the property. For a homeowner, the amount of credit can’t be added to the basis as far as I know.

  3. Avatar for randy philips randy philips says:

    for preaching clean energy and environment, california is not a solar friendly state. There is no state tax incentive, no tax exceptions and Net metering with daily true up, monthly and yearly trueup, the cost of ownership of home solar has become very expensive. I would expect state and Santa Clara County which preaches clean energy, they need to give yearly credit for solarpower generation toal and charge the home owner only total yearly wattage exceeding solargeneration only. This too at the lower rates only

  4. Avatar for Ruth Ruth says:

    Energy Remodeling, my project coordinator Whitnie was great.

  5. Avatar for Sue Flynn Sue Flynn says:

    Why are rental properties not eligible for the 30% rebate on your taxes? If we want to help end our reliance on oil, etc.why isn’t the rebate available to us?

  6. Avatar for Anonymous Anonymous says:

    which solar companies in the bay area do you work with?

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