Are Solar Panels Worth it in Oakland?
Written by Andrew Sendy
Updated March 12, 2020
7 minutes read
Image source: Unsplash
Why yes, yes, they are. In beautiful, sunny Oakland there is no better time to start harnessing the power of the sun. No matter what your household income is, solar panels make sense and will undoubtedly save you money in the long run. And hey, don't forget the added bonus of saving the Earth by switching to renewable energy.
But really, how affordable are solar panels in Northern California?
On average over the last two years, a complete 4.2-kilowatt solar photovoltaic system has cost about $16,128 for the system and installation before any incentives.
This translates to about $4 per watt. Cost per watt is a form of pricing you may see when considering different solar options. This seems like a lot to pay upfront, but our federal government offers a tax credit to help you out. The Investment Tax Credit (ITC) offers a 30 percent tax credit for residential and commercial properties investing in solar energy systems.
It should also be remembered that the savings from solar are considered so reliable by banks that there is now a whole host of zero down solar loan and lease products that you can take advantage of to get solar on your roof without an upfront investment. These zero down offers allow you to make a profit without making any investment.
How much do solar panels cost in 2018 in the Bay Area?
It should also be remembered that in 2018, $4 per watt is a premium price to pay for solar and there are some great solutions being offered in the Bay area using good quality solar panels and inverters now for around $3.20 per watt
Time is ticking, because the ITC will reduce to 26 percent in 2020, and 22 percent in 2021. After that, residential tax credits will disappear and credits for commercial properties will stay fixed at a permanent 10 percent. In order to maximize your solar profits, it would behoove you to go solar as soon as possible or at least start a project before December 31st, 2021. Projects that are in progress before December 31st of the cut-off year will still qualify for the tax credit level of the year the project was started. Even still, timing is a big factor when it comes to solar.
Payback time is the time it takes for your initial investment to come back to you in the form of smaller or nonexistent utility bills each month. Rest assured that this will happen with solar. On average, a solar panel's lifespan is 25 years. The average payback time for systems in Oakland is about 7 years. After that, you will enjoy 18 years with an eliminated or significantly lessened utility bill. For our 4.2-kilowatt system, you can expect to save around $60,000 in avoided utility costs in the solar panels' 25 year lifetime.
The payback time is on average 7 years out of the 25-year lifespan, so that leaves 18 years of avoided utility bills and potentially even earning money. For an average-sized solar panel system (5kW), this equates to $60,000 over its lifespan. In addition, studies done by the Energy Department show homebuyers across the country have been willing to pay a premium of $15,000 for homes that have their own solar panel systems. Imagine the long-term savings and gains!
If you are concerned about the quality of your solar panels, don't be. There are reputable companies to take care of the installation for you. The highest-rated companies in Oakland are SunWork, Solar Spectrum, Save a Lot Solar, Sol R US Electrical Engineering, and High Definition Solar. Even with paying for solar panels and labor costs, the payback time will be less than a third of the solar panel's total lifespan. If you like saving money and saving the Earth, take action now and switch to solar. Get accurate pricing for your home's specific needs on Solar-estimate.org.
I heard you can make money by selling electricity back to the utility company...How does this work?
Net metering is the process through which your electricity company may buy back electricity from you. When the electricity generated by your solar energy system is more than you use in your home, the energy gets exported back to the grid and your utility buys the excess electricity from you at a couple of cents per kilowatt-hour. Solar panels don't just save you money, but may even earn you some as well!
Net metering is not available in certain zip codes in Oakland because of the type of electrical distribution system, called secondary networks. These will break the circuit if they detect back-feeding (energy flowing back to the grid that distributed it). Zip codes that may be ineligible are 94607 and 94612. Contact Rule21Gen@pge.com for projects in these areas.
I'm on board with solar, but what if I can't pay the costs out of pocket?
Not to worry! There are many solar financing options including solar loans, solar leases, and power purchase agreements (PPA).
Solar loans are a financing option that allows you to put no money down and still own a solar energy system. On a monthly basis, you will pay off your solar loan and if you size the system right, your loan payment will simply replace your utility bill, until you pay off the loan completely. This will still be less than your previous monthly electricity bill, by about 40 percent.
Companies also offer solar leases and PPAs, which are agreements through which you rent solar panels or buy the electricity generated by solar panels from an installer. This allows you to still use solar-generated energy, but not have to pay for or own the solar panels. Some people find this appealing because they are worried about the maintenance of owning their own solar panels.
It is a quick way to enjoy the power of the sun without having to pay for the whole system. This will reduce your energy bill, as you will be paying monthly for the solar panels instead of your standard utility bill for otherwise generated electricity. The downside to solar leases is that you will not receive the ITC, the 30 percent federal tax credit since you are not the solar panel owner (the company who leases to you will get this instead). For some, this option makes the most sense.
Solar for Everyone
In the end, there are many options to use solar energy in your home. There is the federal tax credit of up to 30 percent for a system you own. There are also solar loans to help you own a system with no money down and solar leases and PPAs, which give you access to solar energy for your home with no ownership. Regardless of how you get solar-generated electricity, you will certainly be paying less than your current monthly electricity payments.
The sun shines no matter what, and capturing the sun's energy doesn't deplete the total amount of sunshine, unlike coal and other forms of fuel. It is truly renewable and resourceful.
With Solar-estimate.org's calculator, you are able to put in your home address, roof type, and a few more details and then receive a very specific and accurate estimate of your cost to go solar. After you fill out the form, the system recommends the top solar companies in your area and helps you take the next steps to the actual installation. Check it out below.