The San Francisco Bay Area has perfect weather for solar power

The San Francisco Bay Area has some of the best weather for solar panels in the whole country.

Although San Francisco gets a little foggy on summer mornings, that fog keeps the rest of the Bay from roasting in the heat. This is why the weather never gets too far away from the 77 degrees Fahrenheit that solar panels love the most.

In the winter it rarely gets too cold, and in the summer it has long days that get warm and pleasant but not too hot. That is why we picked Alameda for our next hypothetical home that needs some solar panels.

Please keep in mind that most of the time we use averages and estimations such as average monthly bill in an area, so individual results may vary from county to county. This time we decided to go big because some people in the Bay Area go big inside smaller modest homes.

Having stated that, we also think the homeowners remodeled this 1,300 square ft, one story home. They added foam insulation in the attic, new windows, and a new door to make the home well insulated. Because the weather rarely spikes into the 90s, even in the summer, the home has no air conditioning.

The family did add a swim spa in the backyard. These swim spas are a little bigger than a normal hot tub and it can double as both the hot tub, or it can be used as an exercise pool that provided a continuous current you swim against. Needless to say, this puppy sucks up a bit of power, so this family of three spends an average of $150 a month on their electric bill.

If we enter the address and the $150 a month electric bill into our HahaSmart Price Checker Tool, it recommends a 6kW system for the home. The home is not covered by trees, and there is plenty of roof space facing both the south and the west. Southern facing roofs are the best for any solar panels in the Northern hemisphere, and with power optimizers and power microinverters panels facing west get more than enough energy to run at peak efficiency.

Power in California is more expensive than in other parts of the country, so the solar panel payback is faster in Alameda, but because the family is getting a robust system to handle the swim spa, the payback for the solar panels is still about 5.3 years. Let’s take a closer look.
 

How much it costs for the solar system equipment 

Now as we stated earlier, the HahaSmart Price Checker Took recommends a 6 kW solar panel system and it gives a breakdown of the cost and the permits needed. The first step is to get the approval of the design and a permit to build the residential solar system. That engineering and permitting process costs $798.

If you add together the cost of the solar panels, the power inverters, the racking, the material needed to mount the panels, and other miscellaneous items, the total comes to about $7,707. The sales tax in Alameda is 9.25 percent which is about average for cities in the Bay Area. If you add the sales tax of about $713 it brings the total to $8,420 in equipment and permitting.

It is important to note that this cost does not include the electrical main service panel upgrade, and expenses or interest you accrue if you choose to finance your solar system.
 

The average cost for a solar system installation

The HahaSmart price checker tool compiles data from 2296 different installers and it states the installation cost is from $5,748 to $7,442 for the solar panels. If we average the two numbers we get $6,594 as an average installation cost.

Installation costs can vary and we recommend that you compare two to three different installers quotes for your needs. When you talk to multiple installers please note, local installers are certified and they care about their work. Many times they are also less expensive than national chains. Talk to multiple installers and find one that produces the best solar panel system for your situation. 

Generally, a solar installation package includes an application for a solar installation permit from the local building safety department. A plan and layout of the overall installation, a guarantee from the installation company that the project will be done right, and then a permit to operate the solar system.
 

The total cost and the federal tax credit applied

Now to get the grand total for the project, we add the product cost of $8,420 and the installation cost of  $6,594, and we get $14,950 before local, state, and federal tax incentive programs. That means before any other savings are explored, the cost per watt for this system is $2.49 per Watt.

Programs differ in every state, but we know that everyone is able to take 30 percent of the total installation cost and deduct it in their income taxes If we factor in the tax credit, from the system, the homeowner is allowed to write off $4,505. If we subtract this from the overall cost, it drops the cost down to $10,465.
 

Solar powered net-metering from the utility

Again it is important to check local and state governments for incentives and help with the cost. For example,  Pacific Gas and Electric has great programs for solar power. The company participates in net-metering and they even offer zero percent PACE loans for some California customers who want to go solar. Their net metering program is simple and similar to net metering programs around the country. 

Basically, the PG&E net-metering program works like this. As a customer generates power during the day, and power they are not using is sent back to the utility and the homeowner is credited that amount. During the evening, when the panels are dormant, the customer is credited the amount of power they generate during the day. At the end of each month, if the customer generates more power than they use, the amount is carried over to the next month as a credit. After a 12-month cycle, the customer may opt to roll over credit indefinitely or to receive a check for the power they didn’t use.

Property Tax Exclusion for solar energy systems

California also helps out homeowners who want to go solar. They 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. They are only able to deduct 75 percent of the pipes and ducts for the solar system.

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. 

How much could you save on electricity costs?

After 20 years, a homeowner who installed solar panels on their home could save approximately $44,388 in electricity costs. After you factor in the tax credits, the payback is about 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 solar power is less expensive than most new cars. Those panels also increase the value of the home, they pay for themselves in a little more than five years, the whole solar panel system can save a homeowner $44,000 in power costs, and the family can swim in the spa in both the summer and the winter. It just makes sense to go solar.

To learn more about how you can run your air conditioning endlessly and still have a zero dollar electric bill, visit HahaSmart and try out our Price Checker Tool yourself. You can not only see how much a solar panel system would cost and how much you can save.

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