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California Home Solar: How Much Does a System Cost?

Posted by GetSolar Staff In Thursday, September 29 2016 under: Solar Costs, California Solar, Solar Quotes, EnergySage
The prices for California home solar installation systems have continued to drop over recent years. Residential home solar prices dropped an average of at least 3.0% from late 2015 to early 2016, depending on various factors such as the type of system ownership (cash, loan, lease, power purchase agreement PPA), solar installer company, geographic market, and the research report methodology used.

California_Home_Solar_Power.jpg 

Recent reports released by EnergySage (a GetSolar partner) and the Lawrence Berkeley National Labs (LBNL) walk through some of what's going on across the state of California for the period H2 2015 to H1 2016. As mentioned in a previous post, of particular note is the price differential between the lower price quotes offered to EnergySage platform shoppers and the prices paid when shopping directly.

Solar Instant Estimates

For the first half of 2016 the average California residential home solar quote for EnergySage platform shoppers was $3.62 per watt, compared to $3.80 per watt for the second half 2015 period. The Lawrence Berkeley National Lab report (Lawrence Berkeley National Lab's "Tracking the Sun IX") shows a 2015 (full year)  range in California from a high of over $5 per watt to a low of around $3.70, and a median installed price of $4.40 per watt, with some outliers (20%) above and below these figures.

 EnergySage California Prices

                                       California State. EnergySage Platform Quotes: Source EnergySage Marketplace Intel Report Sep 2016                                           

Why are prices in California generally higher than the national average? There are a number of sometimes competing factors that contribute to the difference. California is a more mature solar market than any other state, which on the surface might contribute to greater competition and lower prices. The greater competition aspect is indeed true, however the costs of marketing and sales to go after the business are higher than some other states and show up in the pricing (or in reduced margins). The lower national price average is also skewed due to the lower cost of living (and doing business) in many other states that are now showing up on the residential solar market radar.

LBNL State Solar Pricing Graph

A possible factor according to the Lawrence Berkeley National Laboratory report is the concept of "value pricing" whereby the cost of electricity in California is more expensive, so the value of solar replacing that electricity is higher, and thus quoted or sold at a higher price. Solar PPA's sold by some of the larger national players would fit into this category.  This is indeed an interesting concept when you consider the higher California solar penetration levels on the state grid, and what that is doing to wholesale electricity prices (going down) during the day when the sun is shining, but we will save that for another post... Energysage California average cost per watt

                                             California State. EnergySage Platform Quotes: Source EnergySage Marketplace Intel Report Sep 2016

Another reason for the California's higher average solar pricing could be attributed to the higher number of residential home solar installations using higher-efficiency (>18 %) solar panels, which seem to be popular, and premium components including energy management capabilities at corresponding higher prices, than in other markets. Interestingly, the EnergySage report indicates that California solar systems quoted on their platform were 1 kW smaller in size (6.4 kW to 6.6 kW) than the national average of over 7.9 kW, yet they were meeting 94.8% of annual household electrical needs.

As previously discussed, some of the reasons for the better prices customers get on the EnergySage platform compared to the national average or state average are immediate bid-competition and price transparency. The online solar quote system empowers customers to view and compare systems side by side. Solar installers must submit highly competitive bids to win the business.  As mentioned, this does not necessarily mean that the lowest bid wins the business, it is a combination of price, quality hardware components, aesthetics, customer service, and overall system economics and performance that provides the "best value solution" for an individual shopper. Integral to shopping for multiple solar quotes is having an application to "standardize" the information or "normalize" the quotes and visually present to the consumer, so that a true comparison of solar system offering, component manufactures, and quality/efficiency of brands can be made. 

  Multiple Solar Quotes

 

 

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