Are Solar Panels Worth It in Southern California?

Are solar panels really worth it here in Southern California? I recently had this exact conversation with clients buying a home in San Clemente, and it’s something a lot of homeowners have been asking about lately. Let’s break it down so you can see if it makes sense for your home, too.

Why solar panels make sense in California. Electricity isn’t cheap here. In fact, Southern California Edison has some of the highest rates in the country. The average cost per kilowatt hour runs between $0.28 and $0.35, compared to the national average of around $0.17. With rates like that, it’s easy to see why so many homeowners are turning to solar to cut their energy bills and gain some control over their monthly costs.

The cost of installing solar panels. Most solar panel systems here run between $15,000 and $25,000. The good news is, there’s currently a 30% federal tax credit that helps offset the cost. But before you celebrate, that credit is actually set to expire by December 31, 2025, under the new energy bill. If you’re thinking about taking advantage of it, now’s the time to act.

Payment and ownership options. There are a few ways to get solar installed: pay cash, finance with a loan, or lease the system. While all three options work, owning your system typically gives you the best long-term return. It’s an investment that pays off over time rather than just covering monthly usage.

In Orange County, most solar systems pay for themselves in about six to nine years. Since panels usually last around 25 to 30 years, that means you could enjoy 15 to 20 years of free electricity once the system’s paid off. Over the life of a system, homeowners typically save between $60,000 and $100,000 in avoided utility costs, depending on usage and system size.

Understanding California’s NEM 3.0 policy. California’s Net Energy Metering policy, also known as NEM 3.0, went into effect in April 2023. It reduced how much homeowners earn for sending excess energy back to the grid. Because of that, it’s now even more beneficial to add battery storage to your solar setup. Having a battery lets you store power when rates are low and use it when rates are higher, saving an extra $10,000 to $15,000 over time.

Resale value benefits. In Southern California, especially in places like Irvine, Mission Viejo, and San Clemente, homes with paid-off solar systems tend to recoup that investment when they sell. Buyers see real value in lower bills and clean energy, and that can translate to a better return for you.

If you’ve been thinking about going solar, now’s a great time to get serious about it, especially before the tax credit expires at the end of 2025. Reach out to a local solar company, get the process started, and make sure everything’s installed before the deadline. And if you need more tips about your home, just reach out at (619) 379-7664 or kwsmith3443@gmail.com. You can also visit kevinsmithsells.com. I’m glad to help.