How Much Does it Cost to Install Solar in San Francisco?

San Francisco is one of the top cities for solar power installations. We’ve helped more homeowners in the Bay Area get solar estimates than nearly anywhere else in the country. And that’s probably because San Franciscans are extremely lucky in terms of rebates and incentives. They have not two, but three types of incentives that make solar affordable. Today I’ll break down the federal tax credits, state rebates, city rebates and utility incentives for going solar in the city by the Bay.

Costs of Going Solar in San Francisco

Solar power isn’t known for being cheap. But state and federal governments are responding to that, and have introduced all kinds of homeowner incentives for going solar in San Francisco. Those incentives, plus energy savings in the long run, make home solar panels more affordable than ever.

To learn how much it costs to install solar in your area, click here.

The largest incentive is the Federal Renewable Energy Tax Credit, which pays you back a whopping 30% of the cost of installation after state rebates kick in—and that’s without a cap. So if your system costs $30,000, you’re getting a $10,000 tax credit and probably spinning your meter backward for the next 25-30 years.

State Rebates in California

Secondly, all homeowners should know about the California Solar Initiative, a state organization that offers cash rebates for systems up to 30-kilowatt hours (typical home systems range from 3-7 kW). The rebates are measured per watt you install, with an average of 9-14% return via rebates.

But because of the declining system of rebates in California, the amount you receive depends on when you install the system. This is called the Expected Performance-Based Buydown, which dictates that the sooner you go solar, the more rebates you are eligible for. Rebates are paid in a cash lump sum when your system is connected. However, if you wait too long, you could miss out. Once the state reaches its goal of 350 Megawatts, the CSI rebates expire. Whether they will be renewed remains to be seen.

Utility Rebates for Solar

State rebates are calculated through your local utility, which, if you live in San Francisco, is most likely PG&E. Currently, PG&E offers a rebate of $0.35 per kilowatt-hour of solar power produced. Once again, this rebate will decline to $0.25 once capacity is reached for the current level. Homeowners are advised to act quickly to take advantage of utility rebates, which can add up to thousands of dollars returned.

City Rebates from GoSolarSF

The third round of rebates in San Francisco come from GoSolarSF, which has been extended through June 2011. A chart below shows the dollar specifics and who qualifies for how much. Average rebates through GoSolarSF are $2,000—an incredible added bonus for San Franciscans. Even better is the rate for low-income applicants, which knocks $7,000 off the cost of your system.

Businesses can also get $1,500 per kilowatt of installed capacity (up to $10,000). So, if you installed a 3-kW system for your small business, you’d receive an extra $4,500 rebate. That’s too good for any business owner to pass up.

Average Solar Costs in San Francisco

The average costs of residential PV systems are about $8.70 per watt (as calculated in January, 2011). That’s approximately $34,840 for a 4-kW system, which is the average-sized array.

Let’s say that you want this 4-kW system, and with tax, it comes to about $36,000. With a south-facing roof tilted at 30 degrees (ideal conditions), your cost upfront is $22,820. That’s a savings of $13,180, or 37%.

As you can see, the state CSI rebate nets you $1,400, the GoSolarSF rebate tosses you $2,000 (unless you are low-income or eligible for more), and the federal tax credit will pay back $9,780.

Then, once your system reduces your electric bill by 85%, you’ll save an additional $1,820 per year.

That drops the total cost your first year down to $20,980.

Amazing, right?

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Posted on May 3rd in Solar Funding by Brittany.