The numbers below are estimates for the average home in Santa Ana. 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.
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We know about the Santa Ana winds, the Santa Ana mountains, and the Santa Ana freeway, but what about the Santa Ana sunshine? We think the city ought to get as much credit for its solar potential as it does for its other namesakes. By installing solar panels on their roofs, homeowners in Santa Ana can find respite from the ever-increasing prices charged for electricity by Southern California Edison.
With a solar system on your roof, the more they charge, the more you save!
This page is a short guide to the costs and financial rewards of home solar in Santa Ana, California. It’s got info on relevant California incentives and solar laws, but it is not meant to be your only source of information about going solar in Santa Ana. Check out our main page about solar panels in California 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, paying off their cost in short order and 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.
Let’s dive in to how solar can work for you in Santa Ana!
Important numbers for solar on the average Santa Ana home
Average System Size
Cost after incentives
Years to payback
Savings after 25 years
Those numbers look pretty good, and they can get even better depending on your installer and annual increases in the cost of electricity. Keep in mind, those numbers are for an average home in Santa Ana, where average electricity usage is pretty high. 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 Santa Ana 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 Santa Ana, California:
The cost of solar panels in 2018
Let’s cut to the chase: to offset its entire energy bill, the average home in Santa Ana needs a solar system of about 3.85 kilowatts (kW), which will cost somewhere between $8,750 and $9,100 in cash, after the federal solar tax credit. Even after that huge reduction, that might sound like a lot, but keep in mind that price is for something that saves you an additional $1,640 on energy in just the first year, and more over time as energy prices rise.
Now let’s look at where we got those numbers:
The average Santa Ana home uses about 6,300 kilowatt-hours (kWh) of electricity annually, and would spend about $1,700 for it on a time-of-use (TOU) rate plan; an average of $.257/kWh. That’s a pretty hefty bill, y’all, and each kWh comes in at nearly double the national average cost of electricity, which is just about $.13/kWh.
A 3.85-kW solar system will offset all that usage and save you around $1,640 a year, with a little bit left over at the end of the year that will go into your pocket. A system that size would comprise about 11 350-watt solar panels which take up about 700 square feet of roof space.
Solar panels are priced based on cost per watt, and in Santa Ana in 2018, you can expect to spend a gross cost (before incentives) between $3.25 and $3.40 per watt for a system of average size, depending on the age and geometry of your roof, as well as other factors. That’s the price before the federal solar tax credit.
Solar Incentives for Santa Ana homeowners
California has benefited from a few factors that make solar here a better investment than it is in other places. First, the state has relatively high electricity costs, meaning the panels pay back their cost faster than in other places. Second, the Golden State has had a good history of supporting solar buyers with rebates and other incentives. But with the price to install solar at an all-time low, those incentives are all but gone.
That’s okay, though! The federal solar tax credit takes 30% of the cost of your system away, and the state of California does still have a few other juicy tidbits. Here’s a quick guide to what’s out there:
The federal solar tax credit
All solar systems installed on homes in the United States and paid for using cash or a solar loan qualify for a federal tax credit equal to 30% of the cost to install the system. Now, this is a tax credit, not a rebate, so you have to owe taxes in order to qualify, but even if you don’t pay a ton of taxes, you can roll over your credit to future years.
The 30% federal solar tax credit for our example 3.85-kW system would equal about $3,850 (30% of the $12,825 cost to install). With the federal tax rate at about 12% for most folks, a married couple making more than about $50,000 per year can expect to owe that much in taxes, and collect their full tax credit by the end of the year. That’s a pretty low hurdle.
The reductions from the tax credit bring the cost down to $8,975, and that’s before you consider the effect of energy bill savings (which we’ll get to below).
Property tax exemptions for home solar in California
The state of California exempts home solar installations from property tax. That’s wonderful news for you, since the value of your home will go up by several thousand dollars when you add solar panels. A very solid study of home value increases from solar panels showed an average increase of about 70% of the gross (pre-incentive) cost to install the system. That’s exactly the same as the cost after the tax credit, so the average system of 3.85-kW at $12,825 might add about $8,975 in value to your home!
As long as you install solar before a 2024 deadline to end the property tax exemption, thank a state legislator!
Electricity bill savings from solar in Santa Ana
Saving money with solar in California is a no-brainer, considering just how much SCE charges you for electricity. Whether you’re currently on a tiered rate plan of Time-of-Use (TOU), you can save a bundle with solar panels on your roof.
The reason you can save so much is because SCE’s rates are insanely high. Nearly double the national average for most homeowners, they can jump to 4 times that for homes that use the most electricity. If your bills are higher than the average $173, you owe it to yourself to get a quote from a solar provider near you.
SCE’s 2018 rates
If you’ve spent any time looking at your bill, you know that electricity pricing is complicated. Most people are on the standard residential rate plan, under which there are usage tiers that determine the final price you pay for electricity. And try as you might, it’s really difficult to keep all your usage on the low Tier 1 “baseline” rates.
Most homeowners in Santa Ana use about double the baseline, making their average cost for electricity a little over $.25/kWh. The 3.85-kW solar system we propose can wipe out nearly all the charges for electricity, because of something called “Net Energy Metering,” or NEM for short.
SCE’s 2018 Net Metering Rates
OK, this is where home solar gets a bit complicated. See, California homeowners have installed a TON of solar panels over the past few years, and along with larger-scale solar installations, the state hit a legally-mandated cap for the amount of maximum amount of solar installed under what was known as “NEM 1.0.”
NEM 1.0 was typical net metering. That is, solar owners got a 1-to-1 reduction in their energy bills for every kWh of solar electricity their systems generated. The new NEM 2.0 system is a bit more complicated than that, because it requires all solar owners to switch to a time-of-use (TOU) billing plan and also receive a tiny bit less credit for each solar kWh sent to the grid.
Fortunately, the state legislature and Public Utilities Commission saw fit to make NEM a pretty good deal for everyone, and homeowners can still eliminate most of their energy bills with NEM 2.0. And with TOU billing, it’s possible to earn credit for more expensive “on-peak” kWh (anything between 4 and 9 pm), which earn you extra credit compared to off-peak kWh.
If all that’s still confusing, read our full write-up about NEM 2.0.
Payback estimate for an average Santa Ana home with solar panels
NEM 2.0 is quirky but it can be broken down to averages. The average homeowner in Santa Ana can save about $.20/kWh for every kWh their solar system generates, saving about $1,640 in the first year of operation.
Here’s how it works: SCE keeps track of all your service and “non-bypassable” charges, for which is bills you at the end of each month. It also tracks how many kWh you’ve received from the utility and how many kWh your solar system sent to the grid during on-peak and off-peak times. The tracking is done on a 12-month basis, and at the end of your “year,” SCE sends you the bill (or payment) for the net number of kWh you used (or generated).
The 12th-month bill is called the “annual true-up,” and for the average homeowner with a 3.85-kW system, it’ll be basically a wash, actually reducing the final months’ bill by about $4.50.
For example, if you installed the system in January and it began generating solar energy, you’d get a bill for $4.88 ($.93 minimum monthly bill and $3.95 in non-bypassable charges), and a NEM statement that indicated you used a net of 18.8 on-peak and 88.3 super off-peak kWh, and generated a net excess of 60.18 off-peak kWh (this assumes you use an average mix of kWh and your solar system produces about 40% of its electricity on-peak and 60% off-peak).
Your monthly bill would be between $4 and $7 a month for the rest of the year, and after a sunny summer, you’d end December with 152 off-peak kWh banked. For that excess energy, you’d be paid about $.03/kWh, a rate which is called the “Net Surplus Compensation” rate. That’d leave you with a “true-up” of about $4,50 credit, and you’d start a new 12-month period with a fresh slate.
Here’s how that would look based on a full year, compared to the old pre-solar bill:
Estimated 1st-year savings for a 3.85-kW solar system in Santa Ana
|Month||Monthly kWh Used||Climate credit||Service Charges||Total Bill before solar||Solar kWh||Non-bypassable charges||Bill After Solar||Savings||Rolling net kWh*|
*Final net kWh either charged at time-of-use rate (net usage) or paid to homeowner at the end of the year as a $.03/kWh credit on future bills or personal check (net generation). In our example, the homeowner earns a credit for 152 kWh, which at $.03/kWh equals $4.56.
The table above shows how solar will save you about $1,640 this year, given a typical usage pattern.
That’s great news, and it leaves you with a net cost of about $7,275 after the first year, which is less than 60% of the initial cost of the system. If you see typical rate increases of 3.5% per year from SCE, your system’s cost will be fully paid back after just 6 years, and you’d have at least another 19 years of basically free electricity to save you money on your monthly bills.
Estimated lifetime savings for an average Santa Ana home with solar panels
Solar panels are warrantied to produce at least 85% of their original power rating by the end of the 25th year after installation. Over that period of time, the panels will pump out a net savings of $50,400. That’s HUGE.
Here’s how that looks as a bar chart of annual net cost/savings:
What’s the best way to pay for solar panels?
The calculations above assume that you’d pay for solar with cash up-front, which is the option that gives you the easiest path to ownership. But fear not! If you don’t have thousands of dollars to spend right now, you have options. You can still get solar panels, and because of how the federal tax credit works, it might actually be better financially to take a loan and pay off the panels over time.
If you’ve been looking for solar panels for your home, you’ve probably seen ads that promise “free solar panels!” and “$0-down solar.” While the latter is the more correct term, it is technically possible to get solar panels installed for free, and then pay over time, either buying the system with a loan or buying the electricity only with a power purchase agreement (PPA).
The offerings, prices, and financing terms for loans and PPAs vary widely by installer. If you’d like to see what’s available near you now, your best bet is to connect with one of our solar installer partners to find out more!
You can also head over to our main California page and see financial estimates for the three most popular ways of paying for solar.
Last modified: July 31, 2019