Los Angeles is hot for solar power 

Los Angeles has been a leader in solar power since the 1970s.

Even though people drive everywhere in mostly gasoline powered cars, people in the greater Los Angeles want to jump to the renewable energy revolution, and they are doing it one home at a time. 

We chose Pasadena, one of the cities surrounding Los Angeles, and it is one of the top areas where people are installing solar on their homes and businesses. This is why we picked it as our sixth city in our ongoing series outlining the cost of solar power in different areas.

Keep in mind the numbers we use are based on the average home size, average electricity usage and average family size in the Los Angeles area. 

The home we picked is a single family home of about 1,300 square ft and a family of three live there. The two parents and their daughter do not have a pool or a hot tub in the backyard. They just use the air conditioning most of the year, for Pasadena has more warm days than cold days. The household monthly average is $150 a month for utilities.

Even though Los Angeles has higher than average electric rates, the home is well insulated, and it has modern doors and windows to help keep the temperature close to tolerable. They do use the air conditioning, but because of all the improvements, it doesn’t take as much energy to cool the home and it stays comfortable longer. 

When we enter in the address and monthly bill in the HahaSmart Price Checker tool, we find out that solar is affordable, and in areas like Los Angeles where everything is expensive, the payback is faster than average.

The site recommends a 5.5 kW solar panel system and it gives a breakdown of the cost of the system and all the permits needed. First, you will need the approval of the design and a permit to build the solar system. That engineering and permitting process would cost $798. Then if you add up all the equipment, the solar panels, the power inverters, the racking, the material needed to mount the panels, and other miscellaneous items come to about $6,908. Sales tax in Pasadena is 9.5 percent so it’s a little more. If you add the sales tax of about $657 it brings the total to $7,565 in equipment and permitting.
 

How much it costs for solar panel installation? 

Installation costs can vary, but at HahaSmart, we compiled data from 2296 different installers and we can say the cost range is from about $5,225 to $6,765 to install the solar panels. If we average the two numbers we get $5,995 as an average installation cost. It is important to shop around for the best installer for your needs. Some of the less expensive ones are not necessarily the best ones. On the other hand, many local installers are certified, they care about their work, and they are, many times, less expensive than national chains. We recommend that you talk to at least two different installers and find one that is the best for your situation.
 

The total cost and the federal tax credit applied

If we add the grand total of $7,565 (product and permitting) and $5,995 (installation) we get $13,782 before local, state, and federal tax incentive programs. Because programs differ in every state, we are only applying the 30 percent federal tax credit. After we factor in the tax credit, the net cost of buying and installing a residential solar panel system the Pasadena area is about $9,648. 

Again it is important to check local and state governments for incentives and help with the cost. For example, Southern California Edison has some great programs for solar power that can really help homeowners out.
 

Property Tax Exclusion for solar energy systems

Homeowners are able to deduct either 75 or 100 percent of a solar panel system from state property taxes. They can deduct 100 percent of the panels, storage devices, power conditioning equipment, transfer equipment, and parts. Pipes and ducts that are used to carry both solar energy and energy derived from other sources qualify for the exemption only to the extent of 75 percent of their full cash value. Likewise, dual-use equipment for solar-electric systems qualifies for the exclusion only to the extent of 75 percent of its value. Here is a link to the State Board of Equalization to explain it in more detail.
 

Solar Power Net-Metering

There are several good net metering programs in Southern California. Basically, the net-metering program works by crediting the customer's next bill at retail rate for the power they produce but do not use. After 12-month cycle, the customer may opt to roll over credit indefinitely or to receive payment for credit at a rate equal to the 12-month average spot market price for the hours of 7 am to 5 pm for the year in which the surplus power was generated. (If the customer makes no affirmative decision, credit is granted to the utility with no compensation for the customer.)
 

Pasadena Water and Power rebate program

This is a nice net-metering rebate program where the utility pays residential customers a rebate equivalent to 9.6 cents per kWh. Systems must be connected to the grid to be eligible for the rebate. Since they charge 10.49 cents per kWh and they are rebating back almost as much, for power generated and not used. A lot of utilities do not have a program as robust.
The solar panel payback to yourself

If you take into account in the old monthly bill average of $150, and at least a 20 year lifespan on those solar panels and the cost of the whole system, it is estimated that the homeowner would be able to pay off those solar panels in approximately 4.6 years, with a payback rate of about 20.5 percent each year. This is without net-metering, or state rebate programs being included in the equation. Some companies that don’t use HahaSmart tell customers that their payback period is much longer, so be sure to find out if you are using a HahaSmart Certified Installer.
 

How much could you save on electricity costs?

After 20 years, a homeowner who installed solar panels on their home could save approximately $48,873 in electricity costs. After you factor in the tax credits, that payback is more than four times what the panels originally cost. 

Of course, all these prices and savings amounts can change slightly when different brands of solar panels and inverters are used, but the general point is that installing solar panels on a home in Pasadena still is less expensive than most new cars. Those panels also increase the value of the home, they pay for themselves in less than five years, the whole solar panel system can save a homeowner almost $49,000 in power costs, and you can run the air conditioning endlessly. Why wouldn’t someone want to go solar if they had the chance?

To learn more about how you can participate in the solar power revolution, you can visit HahaSmart, and try out our Price Checker Tool yourself. You can not only see how much a solar panel system would cost, not just in Pasadena CA, but in your area too. Enter the information and see how much you can save in the next 20 years.

For information relating to going solar don’t forget to visit our solar blog section for more handy guides and articles.