Economic Benefits for California
Personal financial benefits of solar panels
The number one reason people decide to go solar is pretty simple: it makes financial sense.
It’s frustrating to watch your monthly electric bill climb higher and higher, especially in California where prices are already high enough. Most Californians should expect to see their power bills climb 5% to 7% each year, according to “Understanding California’s Electricity Prices,” by Bloomenergy.
Worse still, large portions of those bill increases go toward infrastructure upgrades and fuel costs that wouldn’t be necessary if more people installed solar panels.
The collective frustration with utilities and growing electric bills is driving more people to generate their own power at home. When you install solar panels, you break free of the cycle and will only see your bills drop -- not rise.
How much could I save?
Solar panels offer homeowners a wide range of financial benefits, largely based on the sizes of the rooftop solar systems, average electricity rates, and local incentives.
As an example, let’s assume that you live in Los Angeles and fit the average profile for an L.A. homeowner:
- You pay 20.3 cents per kWh (48.2% more than the national average)
- You purchase 7,200 kWh of electricity each year
- You pay an average of $92 per month for your power bill (but that’s climbing)
If you were to install a 2.4 kW solar power system on your home, you could see the following savings over the course of the system’s 25- to 30-year lifetime:
- Monthly Savings: $80-$145 (more over time depending on rate hikes)
- Lifetime Savings: $25,000-$43,000 (more over time depending on rate hikes)
Making it affordable
Those kinds of savings are tantalizing at face value, but the actual costs associated with solar power systems present a huge barrier to most people. A report from residential solar installer SunRun notes that 77% of homeowners would install solar if cost wasn’t a factor.
However, the same report shows 97% of homeowners overestimated the cost of installing solar panels.
Take that same 2.4 kW solar power system into account. Out of pocket, it’s estimated that you would pay a little over $15,500 for it. While that certainly seems like a high up-front cost, it also doesn’t take into account the many financial incentives that lower those costs.
Federal and state incentives slash system prices by nearly 50% most of the time. You can take advantage of a federal tax credit worth 30% if your installation costs, in addition to a local Los Angeles Department of Water and Power incentive.
That expensive $15,500 installation suddenly drops to a more affordable $8,800.
With your monthly electricity savings, that system will pay for itself within 10 years – everything beyond that is high yield return on investment.
Investing in your home
Saving on power bills isn’t the only financial benefit to going solar. A commonly overlooked personal benefit is how it affects your property value.
While some view solar panels in a negative light and expect rooftop solar to devalue a home, it actually increases your home’s value. Most homebuyers find out how much they could save on electric bills with a solar home and are willing to pay more for it.
The National Bureau of Economic Research found that solar panels add, on average, between 3% and 4% to a home’s value. In fact, it’s one of the smartest investments you can make on your home aside from adding a kitchen (which is a lot more expensive).
In the San Diego area, the price premium added from 3.1 kW of solar panels reached $22,554, which is roughly the cost of installing those panels. That means you could easily recoup your solar panel expenses if you needed to sell your house.
Contact local solar installers if you want to learn more about how you could personally benefit from adding solar panels to your home. It’s not just an environmentally responsible solution anymore, but an economically responsible one as well.
The solar industry boosts California’s economy
As many industries focus efforts on out-of-state or overseas growth, Californians are looking to support ones firmly centered on home.
More so than any other energy industry, the California solar industry reinvests its money in local communities, providing jobs, driving economic activity, and saving taxpayers money.
It presents a huge contrast to traditionally fossil fuel-focused utilities, which use millions of dollars annually for lobbying, executive pay, and expensive resource extraction efforts. Plus, while fossil fuels may often be imported from out of state or overseas, solar must be produced in California by Californians – keeping more money at home.
The solar industry creates jobs at home
Solar in California has experienced massive growth in a relatively short amount of time. Between 1995 and 2012, the number of solar businesses in California grew by 171%, with solar employment jumping by 166%.
Today, the industry employs over 43,700 Californians who contribute to their local communities and positively impact a variety of businesses. Solar careers range across a wide set of occupations, including:
- Sales and distribution
- Solar plant operations
- System design consulting
Solar creates more jobs than fossil fuel production because larger portions of expenditures go toward manufacturing equipment, installation, and maintenance. These priorities tend to be more labor-intensive overall than the extraction and transporting of fossil fuels, which utilities base their revenue streams on.
Since solar jobs stay in California, they also play a large role in driving economic activity across the business spectrum. By installing solar panels, you prop up an industry that’s creating well-paying jobs in California, allowing the state’s economy to flourish.
Solar fuels economic activity
There are currently over 547,000 solar rooftops in California. Gov. Jerry Brown wants to reach one million rooftop solar systems by 2020, believing that it will greatly boost California’s economy.
What could one million solar rooftops mean for California exactly?
Gov. Brown estimates that another 450,000 solar powered homes would add close to $30 billion in economic activity for the state, while also creating an additional 20,000 jobs.
Money spent on electricity generated from solar stays in the region – unlike fossil fuels. Renewable energy doesn’t need to be imported from other states, regions, or countries to provide electricity.
Unfortunately, because of high electricity demand, California imports more electricity than any other state in the country. Much of that comes from natural gas and coal plants in the Midwest and Rocky Mountains, sending money out of California.
Solar lets you generate electricity at home, preventing your dollars from going to out-of-state interests. Plus, under California’s Renewable Portfolio Standard, all electricity from renewable sources provided by utilities legally must be generated in state.
That means all renewable energy used in California is created at home – can you say that about natural gas, coal, or oil? The investments you make in renewably generated electricity go toward good causes that improve all areas of a local economy.
Saving taxpayer money
It’s not just consumers who are seeing the economic benefits of solar. Local governments have also caught on to how much they could conserve by going solar, saving more of your tax dollars. That means city and county governments can focus less on high electricity bills and more on improving the local community.
For instance, San Diego has installed a 1 MW solar power installation on the city’s Alvarado Water Treatment Plant. Rather than wasting more taxpayer money on electricity that doesn’t even come from California, they’re saving $40,000 annually.
The system also didn’t cost the taxpayers a dime. Instead, they installed it under a Power Purchase Agreement from SunEdison, giving them access to the benefits of solar generation, minus the high cost for such a large system.
By freeing up taxpayer dollars, local governments are able to do more with what little they have, letting them reinvest in their communities.
Supporting the industry
California provides for one-fourth of all solar jobs in the country, and that number is growing. If California hopes to continue to reap the benefits of a solar-powered economy, it needs more people to invest in the technology.
Contact local installers to learn more about how solar can benefit you, your neighbors, and California as a whole.