Are Solar Panels Worth It in California in 2025?

Installing solar panels isn’t just worth it in California. It’s one of the smartest investments you can make in your home right now. 

Electricity is more expensive than ever, especially in California, and we’re using more of it all the time. 

Installing residential solar panels now will protect you against rising rates and ensure you have access to affordable, reliable, and sustainable electricity for decades. 

Update** The “One Big Beautiful Bill Act” (OBBBA), signed into law on July 4th, makes major cuts to federal clean energy tax credits, including the residential and commercial solar tax credits. 

The residential solar tax credit will now end on the last day of 2025, about a decade ahead of schedule. The commercial credit will last a little bit longer, but not much. Make sure you get your system soon so you beat the deadline.

Solar Makes More Sense Than Ever in California

California has always been a leader in solar energy thanks to year-round sunshine and strong policy support. Recent changes, like NEM 3.0, have had an impact, but solar is still a good investment that protects you from a volatile, expensive, and unreliable electric grid.

Guaranteed Electric Bill Savings 

Solar panels are a safe investment with a guaranteed return. As long as the sun rises every day, you will save money on your electric bills, and those savings add up fast. 

A solar power system that replaces $200 a month in electricity costs, for example, will put $2,400 in your pocket a year. Why hand that over to PG&E when you could add it to your retirement savings or use it to take your family on vacation? 

Keep the Lights on During Grid Outages 

Power outages are becoming more and more frequent. With solar plus battery backup, you can keep essentials like your lights, refrigerator, and medical equipment on during a blackout.  

Claim Tax Incentives Before They Disappear 

The 30% federal tax credit for solar and batteries is still available, but may not be for long. Congress is considering a rollback, and if it passes, the tax credit could vanish by the end of the year.  

California’s Solar Property Tax Exclusion is also on its way out. The exclusion prevents your property taxes from going up when you install solar panels, but it’s set to expire on January 1, 2027. 

Now is the best time to go solar, so you can take advantage of huge tax incentives while they’re still on the table. 

Cut Your Fossil Fuel Consumption 

Switching to solar is one of the most impactful steps you can take to shrink your carbon footprint. Every kilowatt-hour you generate with solar is one you’re not pulling from a fossil-fuel-powered grid. That means cleaner air, less pollution, and a better future for the next generation. 

What About Net Metering 3.0? 

The shift to NEM 3.0 reduced solar buyback rates in California. That means you earn less for the excess solar power you generate and export to the grid. 

But getting solar power is worth it even with NEM 3.0. You just have to change up your strategy. 

Under NEM 3.0, it makes more sense to store your excess power in a battery instead of sending it back to the grid. You can use your stored energy at night, which allows you to avoid expensive time-of-use rates. 

Installing a battery adds to your installation costs, but can help you save more and break even on solar faster. With NEM 3.0, solar plus storage is a better investment than solar panels alone. 

How Much Do Solar Panels Cost in California? 

Of course, you have to consider cost when you’re deciding whether solar energy is worth it for your home. 

An average residential solar energy system costs roughly $3.30 per watt in 2025, according to the Solar Energy Industries Association. That comes out to about $33,000 for a 10 kW system, before subtracting the 30% solar tax credit, which brings it down to $23,100. 

What Impacts Solar Installation Costs? 

Looking at average costs will give you a general idea of what solar panels cost, but keep in mind that prices vary. You could end up spending a lot less, depending on the size of your installation. 

Some of the many factors that impact solar panel installation costs include:

• System size (calculated based on electricity consumption) 
• Equipment make and model (some brands are more expensive than others) 
• Installation complexity (complex and hard-to-access roofs can affect costs) 
• Batteries (batteries increase your costs but also boost your savings) 
• Incentives (tax credits can significantly reduce your installation costs) 

How Much Can You Save with Solar Panels for Your Home? 

Solar panels save the most money for homeowners with a lot of access to sunlight and high electricity bills. That puts California homeowners in a great position to save. 

Your exact savings will vary based on your electricity costs, how much sunlight your house gets, and the size of your solar power system. However: 

• Most homeowners see significant reductions in their electric bills, often covering their entire usage costs with solar power 
• Your solar system will pay for itself, usually in 6-11 years 
• After that, it’s pure savings for the remaining lifespan (25-30+ years total) 

So, Should You Get Solar Panels? 

Solar is a good investment for many California homes — but it’s not for everyone. 

At Premo Solar, we help Monterey Bay homeowners make the best decision based on their specific situation. Our team will evaluate your roof and electric bills to estimate your installation costs and expected savings so you can decide whether the investment is worth it to you. 

With decades of experience serving homeowners in Carmel, Monterey, Gilroy, Salinas, Santa Cruz, and the surrounding area, we are a local company you can rely on for honest and transparent solar help. 

See if solar is worth it for your home! Call 831-901-3352 or contact us for a free, personal estimate.