The numbers below are estimates for the average home in Riverside. 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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Ah, Riverside! The city so nice, they named a whole county after it. But residents of the city of Riverside have something that helps them stand out from their county-wide neighbors to the east: a municipal electric utility. That means the even though Riverside is surrounded by Southern California Edison customers, people who live within the city enjoy a more personal touch when it comes to paying their electric bills—and going solar. But there’s a dark secret lurking on your electric bill. More on that below.
Yep, Riverside Public Utilities is good to the homeowners it serves, and they make it easy for homeowners to go solar! If you own an average-sized house in Riverside, you can eliminate much of your electricity bill with just a small to medium-sized solar array, which will pay back its cost before it’s warranty is half up, and save you thousands of dollars in the years after.
This page is a short guide to the costs and financial rewards of home solar in Riverside. 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 Riverside. Check out our main California page for more extensive content about all things related to home solar in The Golden State!
Important numbers for solar on the average Riverside 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 increases in the cost of electricity. Keep in mind, those numbers are for an average home in Riverside, where electricity usage and prices are 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 Riverside 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 Riverside, California:
The cost of solar panels in 2018
Let’s cut to the chase: to offset its entire energy bill, the average home in Riverside needs a solar system of about 3.85 kilowatts (kW), which will cost somewhere between $8,900 and $9,250 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 $735 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 Riverside home uses about 6,300 kilowatt-hours (kWh) of electricity per year, and spends about $935 on electricity annually. A 3.85-kW solar system will offset all that usage and save you around $735 a year, with the remaining $200 going straight to the $18.06 minimum monthly charge from Riverside public utilities. That’s about 14 275-watt solar panels which take up about 250 square feet of roof space.
Solar panels are priced based on cost per watt, and in Riverside in 2018, you can expect to spend a gross cost (before incentives) between $3.20 and $3.50 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 Riverside 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 $3,927 (30% of the $13,090 cost to install). With the federal tax rate at about 12% for most folks, a married couple making more than about $33,000 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 $9,193, 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 $13,100 might add about $9,200 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 Riverside
Like we said above, the people of Riverside benefit from a municipal electric company, meaning the utility acts in the public interest, and therefore offers somewhat lower rates—and raises rates less often—than some other for-profit electric providers. That’s great news for Riverside homeowners, because it keeps electric bills low, but it makes the profits from solar a little slower than they might otherwise be.
But if you want to install solar panels, there is a dark secret lurking in your Riverside Utilities electricity rate schedule.
See, the utility has charges for every kWh of electricity you buy, but they also have “fixed” charges that stay the same every month. Riverside Public Utilities has a rather high monthly reliability charge of $10 for 100 Amp (or less) service, and $8.06 per month as a customer charge. These charges can’t be offset by solar production, meaning $216.72 of your annual electricity bill cannot be eliminated by solar power on your home.
Still, the relatively modest solar system needed to provide the energy an Riverside home uses in a year can save the average homeowner $735 per year. If you’re a heavy used of electricity—that is, if you regularly find yourself in tier 3 rates, you can save more, but the average homeowner needs 6,300 kWh per year, which never push them into the higher tier.
Riverside Public Utilities Solar Compensation
A solar system in Riverside allows you to reduce your bill down to the monthly $18.06 minimum, and any kWh over your usage can be carried over for the whole year, to be “trued up” at the end of 12 months. Any additional kWh left at the true up period are paid for at what Riverside Public Utilities calls its “Net Surplus Compensation” rate. Since its inception in 2016, that rate has hovered around $.07/kWh. So it behooves you to size your system to not exceed your needs by much.
Let’s look at how that works over a year:
Payback estimate for an average Riverside home with solar panels
Given the quirks of Riverside’s net metering rules, the 3.85-kW system we outlined above will bring your monthly bills down to the minimum of $18.06, and the production of your solar system will be tracked against your usage over the course of the year. In December, you’ll receive a payment for net surplus compensation that will bring down your cost because the utility cuts you a check for $.07 times the number of excess kWh. If you don’t have excess, you’ll be charged for those kWh based on the retail price of using them.
Here’s how the average solar production squares with usage for the average household usage over the year:
|Month||kWh usage||Flat charges||Tier 1 charge||Tier 2 charge||Total pre-solar bill||Solar kWh||Net||Bill after solar||Solar savings|
The table above shows how solar will save you about $735 this year, given a typical usage pattern. And your system will produce a net surplus of 236 kWh, which will earn you a check for $16.52. That leaves a net cost of $200.20 for your annual energy bill. Pretty good!
That’s great news, and it leaves you with a net cost of solar about $8,500 after the first year, which is just 70% of the initial cost of the system. Over the next 25 years, the panels will be under warranty while they pump out savings. Let’s take a look at how long it’ll take to pay their cost back, and how much you could make over the long-term:
Estimated lifetime savings for an average Riverside home with solar panels
Here’s the very best part about saving money with solar: your savings tend to increase every year. That’s because the utility company raises prices every year, and what you would have paid goes up with it.
Despite its community focus, Riverside Public Utilities is not immune from the need to raise rates. In fact, the utility has laid out a plan to increase electric costs to the public by 1.4% per year between 2019 and 2023.
that’s a really low rate of increase, but if it continues for the next couple decades, the average homeowner will be saving about $910 per year at the end of the panels’ warranty, a 23% increase over 25 years. The solar panels will make slightly less electricity every year as they become worn by the weather, but that amounts to a decrease of about 0.5% per year.
The initial cost of the system will be paid off in year 12, and over the final 13 years of the solar warranty, the panels will produce an estimated $11,300 in profits. That’s a huge amount of money you’ll be making! Here’s how that looks as a graph of cumulative annual net 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: August 7, 2018