Welcome to the San Diego Solar Power Information Page
The numbers below are estimates for the average home in San Diego. Your home is unique, and your financial estimates depend on that uniqueness. If you’d like to get personalized solar estimates for your home, our network of solar experts are on call to assist you.
Simply sign up for personalized assistance on our special solar deals page.
San Diego is California’s southernmost city, adjacent to the Mexican border. Not too cold and not too hot, San Diego is just right—the weather is famously mild and uniform all year round. The most reliable thing is sunshine: lots of it! It’s sunny for nearly 260 days out of the year. Considering the sunny weather and the insane electricity prices from SDGE, installing solar panels on your house here is a no-brainer.
This page is a short guide to the costs and financial rewards of home solar in San Diego. It’s got financial estimates for the average home and info on relevant California incentives and solar laws, but it is not meant to be your only source of information about going solar. Check out our main California Solar page for more extensive content about all things related to home solar in The Golden State!
You can install solar panels on your roof that will greatly reduce your power bill and pay off their cost in short order, essentially making you money like an investment over the long-term.
Solar panels are covered by 25-year warranties, which ensures your roof will be paying dividends long after all the neighborhood kids are out of college. And if you decide to sell before then, the panels add thousands of dollars in (un-taxable) value to your home, right from the start.
Let’s dive in to how solar can work for you in San Diego!
Important numbers for solar on the average San Diego home
Average System Size
Cost after incentives
Years to payback
Savings after 25 years
Those numbers look crazy good, and that’s because electricity from SDGE is EXPENSIVE, and getting more expensive every year. Keep in mind, those numbers are for an average home in San Diego, where average electricity usage is pretty low. Many factors determine how much you could save, and if you’re a heavy user of electricity, your up-front costs are comparatively lower, and your savings go way up. If you’re looking for a custom estimate for your home, connect with our solar experts in San Diego today.
If you’d like to learn more about how we got those numbers, read on! Here’s our guide to the ins and outs of going solar in San Diego, California:
Average size for a home solar system in San Diego
According to SDGE estimates, the average home in San Diego uses 500 kWh per month, or 6,000 per year. That’s actually over 30% lower than the national average, but San Diego residents get no breaks in their electric bills—at an average of $.26/kWh The price of electricity here is over 2 times the national average.
To produce an equivalent amount of electricity to its usage, the average San Diego home needs a 3.85-kW solar system, consisting of 11 350-watt solar panels, which will take up about 530 square feet on your roof. A system that size would actually produce an estimated 6,108 kWh per year—a bit higher than your usage, but since solar panels slowly lose a bit of their ability to generate electricity over time, that’s no concern.
The cost of solar panels in San Diego in 2018
When you get a quote for a solar system for your home, the installer will quote a price in terms of “dollars per watt” of generating power. For homes in the San Diego area, the cost of an average solar in 2018 can range from about $3.25 to $3.40 per watt. Our example 3.85-kW system, at $3.33 per watt, would cost about $12,820 to buy with cash.
That’s the cost before any incentives or energy bill savings, and there is some good news for you on both fronts.
San Diego solar incentives
The most important solar incentive to know about is the federal government’s Solar Investment Tax Credit, or ITC for short. It earns you the equivalent of 30% of the costs you pay for a solar installation back as a credit on your next tax return. The state of California also offers a property tax exemption for the value solar panels add to your home.
It used to be that every utility company offered a rebate to people who wanted to install solar panels. Unfortunately, that time has passed. But don’t be discouraged! The reason SDGE no longer offers rebates for solar is because solar got a lot less expensive. The rebates worked to spur adoption, which in turn led to an increase of solar panel production, and prices fell. Ain’t economics grand?
But there are still California solar rebates available, to people whose family income is 80% of or less than the median income for their area. The rebates come from the California Solar Initiative, and can completely cover the cost of solar!
Let’s take a closer look at those incentives:
The federal solar tax credit
Through the end of 2019, the federal government will give taxpayers a credit equal to 30% of the cost of their solar installation. For our example system, that represents $6,750 (30% of $22,500) that you won’t be paying in taxes next April. That’s a huge savings, and well worth it if you have the tax appetite to take advantage of it.
After the federal tax credit, our sample system in San Diego costs just $8,975, over $3,800 cheaper than its initial cost.
Other California solar incentives
California is a mature solar market, which means that many of the best incentives are long-gone. The return on a solar investment here is so good now, most folks don’t need any financial help to make solar pencil out. Luckily, though California has held on to a couple of very smart incentive programs that can help.
Property Tax Exemptions for Solar in San Diego
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 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 San Diego), 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.
Solar payback time and lifetime savings in San Diego
Remember above we said it’ll take 5 years to pay back the cost of your system, and you’ll earn $71,000 in energy savings over the next 25 years? That’s because electricity from SDGE is expensive, and going solar helps you avoid a great deal of that expense.
And with solar panels under warranty to produce a certain amount of energy over 25 years, you can rest assured that they’ll keep saving you money as long as you own your house.
San Diego Electricity Prices
Electricity from SDGE 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 $0.24 per kWh or more. And if SDGE has its way, that number will be going up soon—by a lot. Good news though: your rooftop solar system will be feeding energy back onto the grid and bringing your bill down. The more they charge, the more you’ll save.
Another wrinkle in the fabric of ultra-high electric prices is that SDGE wants to transition everyone from its current tiered rate structure, where you pay more if you use more, to a new Time-of-Use (TOU) billing structure, where you pay more for using electricity during “peak” time, generally 4 pm to 9 pm, Monday through Friday.
Going solar in SDGE territory means jumping ahead of that curve, because new solar owners are automatically enrolled on a similar TOU billing plan, meaning they earn more for every kWh sent to the grid during those peak hours. Your solar installer can design a system that’ll maximize energy production during peak hours and save you the most money possible.
Let’s look at how SDGE’s energy bills for a typical home can be reduced by our 3.85-kW solar system:
Estimated 1st-year savings for a 3.85-kW solar system in San Diego
|Month||kWh used||On-Peak||Off-Peak||Super Off-Peak||Total Bill before solar||Solar kWh||On-peak||Off-peak||Monthly Bill||Savings|
*Any amount of kWh over usage is credited to the customer's account and used to reduce future months' bills.
The table above shows how the monthly pre-solar energy bills compare to the bills after solar is installed. The annual solar generation of 6,108 kWh actually exceeds the total expected usage, but some charges carry through to the monthly bill no matter how you power your home. There’s a monthly fixed charge for service, and fractions of the price for solar kWh sent to the grid aren’t reimbursed.
Still, even after those charges, you can knock your bill down from over $2,000 per year to just $100. You even get a couple of $0 electric bills thanks to SDGE’s share of the California Climate Credit. No wonder solar pays itself back so quickly in San Diego. And as SDGE&E raises rates (28% from 2018 through 2022), you save more every year as your solar panels keep kicking out the kilowatts. Here’s a look at the 25-year savings from solar now:
25-year estimate of solar savings for a San-Diego home
As we mentioned above, SDGE has a habit of raising rates. In fact, they have a fully laid-out plan to do so. For ordinary homeowners, that means higher bills every year, without fail. But if you install solar now, instead of rising rates, you get increased savings. That means solar pays back its cost faster, while homeowners who don’t install solar are paying more.
On top of that fact, banks now look at solar as an investment, and with rates like SDGE’s, more banks are willing to lend at better rates for home solar panel installations. You can find a 15-year home equity line of credit for under 6% interest that will have you paying a fraction of your savings every month, meaning you don’t need several thousand dollars down, and you still save money, starting from day 1. And with a loan, you still get the 30% federal tax credit based on the total cost of the system.
Even if you don’t take a loan, the rate increases planned by SDGE will have your solar costs paid back in just 5 years of energy bill savings. Your next 20-30 years of electricity from solar will essentially be free, which means huge savings over time. Here’s a look at the estimates in a chart:
We usually assume a yearly increase in rates of about 3.5%, but we adjusted the first few years based on the already planned schedule of 11% in 2019, 6.9% in 2020, 5.1% in 2021, and 4.9% in 2022. After that, we looked at 3.5% increases, which seem conservative in light of the currently-planned increases.
At the current rate of increase, those savings will have the initial cost of the system paid off in just over 4 years, and everything after is profit.
The numbers above are estimates for the average home in Austin. Your home is unique, and your financial estimates depend on that uniqueness. If you’d like to get personalized solar estimates for your home, our network of solar experts are on call to assist you.
Simply sign up for personalized assistance on our special solar deals page.
Last modified: March 21, 2019