Energy costs continue to rise and squeeze the average homeowner’s pocketbook. And reliance on fossil fuels and traditional energy sources is a drain on the environment. Fortunately, there are numerous alternative energy sources that San Diego residents can take advantage of. The value of solar panels for homeowners and the environment is an excellent way to save on energy costs and reduce your carbon footprint. How much can homeowners save by installing solar panels on their property? We’ll discuss the payback period and the other benefits of investing in residential solar energy in San Diego.

What is the solar payback period?

When it comes to measuring the ROI of solar panel installation, you’ll have to consider the solar payback period. The solar payback period is the amount of time that electricity savings from a solar system install begin to pay for the cost of installing the system. The shorter the payback period, the more significant the percentage of ROI.


What’s the average payback period for solar panel installation in San Diego?

There are two things you need to look at to determine the ROI for residential solar installation in San Diego.

  • The average cost of installing panels in the area.
  • The revenue generated by a solar panel installation.

The upfront cost is pretty straightforward when you hire a company to install your solar panels. A solar panel installation company will quote the price of the panels. They will also quote what approvals and permits from the jurisdiction and SDG&E electric you need to move forward. As far as revenue produced goes, revenue is calculated by the amount of energy the solar panels produce each year, versus the cost that would have been paid to the utility company if the same level of power would have been purchased from the utility company.

Ultimately, the amount of solar energy that residential solar panels will produce is dependent on the weather. The more sunshine a locality gets, the higher the savings and ROI. Fortunately for San Diego residents, southern California is one of the sunniest places in the U.S. When it comes to energy generation from solar panels, hardly any other place in the country comes close to the San Diego area.

However, financial incentives can play a significant role in generating cash savings and solar panel investment ROI. Financial incentives vary across the U.S. Currently, California residents can enjoy a 30% federal solar tax credit. Also, the NEM 2 Net Metering Law offers additional, attractive incentives to install a solar panel system on a residential property. A typical household in San Diego who sees an average $250 SDG&E electric bill can see precisely what they would save with solar panels cost and savings calculator. Overall, San Diego is one of the most profitable U.S. cities for installing residential solar panels.

How much do solar panels cost in San Diego?

On average, San Diego residents can expect to pay about $3.63 per watt. The average cost of a solar panel installed in California is $18,150, but that’s before rebates, incentives, and the 30% tax credit are taken into account.


What incentives are available to San Diego residents who want to install a solar panel system?

  • 30% federal renewable energy investment tax credit
  • The Energy-Efficient Mortgages Program
  • Up to 19, California-specific residential solar incentive programs

Solar installation companies and financing groups will have extensive information on how to navigate the sea of solar incentive programs.


How much do high-rates of sunshine contribute to solar panel installation ROI?

The level of solar radiation available per unit area in a location is measured in kilowatt-hours per square foot, per day. In San Diego, one kilowatt of solar panels will produce 1478 kWh of energy every year. Cloudier, colder areas like the northeastern U.S. will only produce around 1100 kWh of electricity per year. To put it into perspective, San Diego-installed solar panels will generate 34% more power than the same panels installed on a northeastern U.S. residence. The reason why San Diego is one of the most lucrative places to purchase and install solar panels because of its high number of sunny days.


How much do SDG&E electricity rates affect solar investment returns in San Diego?

San Diego boasts a number one ranking when it comes to installing solar energy capacity. The city also holds a number two spot on installed solar energy capacity per capita compared to all major U.S. cities. San Diego ranks higher than L.A., and Honolulu on per capita ranking.

If you were to look at utility energy costs in major cities in the U.S. compared to San Diego, you’d find that SDG&E has some of the highest electricity rates in the country. Because of SDG&E’s high rates and the levels of sunshine in the San Diego area, the city has some of the shortest payback periods in the U.S. Solar panels last a minimum of 25 years. And in San Diego, the payback period is around 5.5 years. Therefore, San Diego is one of the most prosperous cities to install solar energy and has the highest ROI for investing in residential solar panels.

If you were to pay cash for your San Diego residential solar energy system, you would earn back your investment in less than six years. With proper maintenance, you can expect your panels to last up to a quarter of a century. For the San Diego resident, that means that you wouldn’t have to pay a utility bill for close to 19 years. Not only will you save significantly on energy costs, you’ll also improve the health of the environment, and the value and attractiveness of your home. Investing in solar energy in San Diego is a no-brainer if you’ve got the money for the upfront investment costs. If you are ready to move forward get a quote from Encōr Solar and see what you could be saving.


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