Welcome to the San Francisco Solar Power Information Page
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San Francisco is one heck of a friendly place for solar power. For starters, it’s one of the few cities in the country that offers a local solar rebate. We’ll get into the details a little bit later, but that solar power rebate will help every resident in the county and city of San Francisco with some extra cash, and depending on your circumstances, it can give you a whole lot of cash back. Combined with high electricity prices (meaning you’ll save a ton when you make the switch to producing your own electricity) and strong statewide policies, solar power offers big savings and big profits to residents of the City by the Bay.
If you’d like to learn more about statewide policies, head over to our comprehensive California page, otherwise read on to find out about solar in San Francisco!
Investing in Home Solar in Los Angeles
San Francisco Solar Power Rebates
While California no longer offers state rebates or tax incentives, the city and county of San Francisco is still keeping the lights on for their amazing GoSolarSF Initiative. The city will pay you a huge amount of money as a direct rebate, just for putting solar panels on your house.
Exactly how much you can get depends on a few factors. No matter your circumstances, you’ll qualify for a $2,000 rebate when you install solar in SF. If you use a local installer, you get another $700. If you participate in the California Alternate Rates Energy (CARE) and CalHome programs, OR if you live in the 94107 or 94124 zip codes, you qualify for an additional $800.
Finally, if you fall below the median income and pay lower electricity rates through the PG&E CARE Program, or if you qualify for the Single-Family Affordable Solar Homes (SASH) Program, you can get another $7,000. Whoa, wait! Did we just say $7,000? Yep! we said $7,000. That’s some equal opportunity solar policy right there! The total possible San Francisco solar rebate is north of 10 grand, and some people even qualify for a free 1-kW solar panel system on their homes. That’s probably the most extensive local rebate in the state, if not the country.
Keep in mind these numbers are for single-family homes. There are other incentives available to non-profit organizations and even multi-unit rental property owners. Check out the GoSolarSF page for more details.
San Francisco Solar Tax Incentives.
Even though California isn’t giving solar tax credits anymore, it’s at least giving you some tax exemptions, right? Right! When you install a solar system you get a big ol’ increase in home value (because of the energy savings, not because it’s cool, though the awesomeness of a new solar polar system is, admittedly, undisputed). Normally an increase in home value means an increase in property taxes, but not with your solar power system. 100% exemption baby! Give me an E; give me an X… OK, you get the point.
What you don’t get, much to our chagrin, is a sales tax exemption. This is an unfortunate trend in a lot of states, forgetting about that pesky sales tax exemption for renewable energy systems. Given all the other excellent solar policy we’ve seen in California, a sales tax exemption is a pretty easy way to encourage residents to switch to solar power, and we hope to see the legislature correct this soon.
San Francisco Electricity Prices
San Francisco residents currently pay an average of 21.3 cents per kilowatt-hour (‘kWh”) of electricity here. That’s pretty high, so electricity prices go. Heck, it’s nearly double the national average of 12.5 cents/kWh. At that price, we’re pretty sure you cringe every time the electric bill comes in the mail – we would too. Stop that worrying! The high cost of electricity in San Francisco just means you’re going to save even more every month when you start raking in those solar-power backed savings.
But hidden inside that average are the varieties of rate plans that PG&E uses to charge their customers. Two of the most popular are tiered-rate plans and Time-of-Use (ToU) plans. With a tiered rate plan, you pay more for energy the more you use over the month. Everyone starts out paying the same amount per kWh, and as they reach certain thresholds, the price for future electricity goes up. Here’s how that looks:
Different areas in California have different trigger points for the tiers, so check with PG&E to see where yours are. Here’s where solar comes in: By producing energy from solar panels you effectively use less during the month, meaning you avoid the higher rates and effectively pay less for electricity.
ToU pricing is different. Because the most energy gets used during the day when businesses are running at full strength, the utility company charges more as a way to promote energy efficiency to keep the grid running smoothly. And it just so happens that the sun also shines during those exact same hours. If your solar panels are kicking out kilowatts during those hours, you’re saving money. Maybe even more than with the tiered plan. As of this writing, PG&E’s low rate for ToU plans is 14.3 cents/kWh at non-peak times, and up to 33.6 cents/kWh at peak. Here’s how that looks:
If your solar panel system is sized to exceed your usage during peak (daylight) times, you could effectively pay only 14.3 cents/kWh for the energy you do use, and even then you can produce enough energy to offset most or all of your energy bill, especially from May to October when the sun is higher in the sky.
Now let’s see how it all comes together with an estimated savings profile for a San Francisco home:
Example 5-kW Solar Installation ROI in San Francisco
What do all these numbers and all this policy amount to for your finances? Let’s take a look:
- Installing a typical 3.5kW solar system should start at about $14,000. Don’t worry – that price tag is gonna drop fast!
- Here comes San Francisco’s sweet solar power rebate! We’re going to be conservative in our estimate and not assume too much with these numbers. That means just the base solar rebate of $2,000, bringing the cost down to $12,000.
- Next we take off the 30% federal tax credit, which is calculated from out-of-pocket costs (i.e. after the rebate). Subtract another $3,600 for a new price of just $8,400.
- Finally we subtract your first year’s energy savings, which we estimate to be about $1,047. That brings your final cost after the first year to $7,353, about half of where we started!
- With a conservative estimate of 3% for the future rise of electricity prices, you can expect your new solar power system to pay for itself in just 8 years, and by the end of our 25-year estimate, you’ll have made a profit of $29,761. That’s huge!
- The Internal Rate of Return (IRR) on this investment is a whopping 18.6%, more than double an investment in the S&P 500!
- It can be easy to lose sight of in the midst of all those immediate savings, but don’t forget that you just significantly increased the value of your home as well – in this case by over twenty grand!. That’s $20,000 of tax-free value!
- Good for your wallet, good for your home value, and good for the earth… The fossil-fuel-produced electricity you’re not buying from Electricity Inc. is the same as planting 89 trees this year (and every year for the next 25 or so)!
Remember that these figures are estimates. Your home is unique, and how much money solar will save you depends on that individuality. Thankfully we know some experts in your 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.
San Francisco Solar Leases, Solar Loans, and more!
What if you don’t have $14,000 lying around to pay for solar? Because banks and third-party installer are recognizing what a good investment solar is, they offer leases and loans and other ways of paying for it. Let’s examine a couple of the most popular tools.
When you choose an installer in San Francisco, you’ll probably 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. So is a solar lease 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 monthly payment of $46.67 ($560/year) will save you the same $1,047 on electricity this year. 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!
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 25 years at 6.5%, you’ll actually end up paying more than your current energy bill for about 12 years, and you’ll only end up saving about $13,000 over 25 years.
But! If you pay the loan down early by putting the San Francisco rebate money into it, and then pay a big lump sum with your big federal tax credit into the loan at the end of year one, you’ll actually come out ahead of the lease and nearly as well as the cash purchase option. You’ll pay slightly more than your current energy bill for 8 years, and after that, it’s all profit, baby! $28,141, to be exact(ly estimated).
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 a look at how the different payment option stack up visually:
Last modified: May 12, 2015