If you’re interested in investing in a solar system for your San Diego home you’re not alone, but you may be worried about affordability. If that’s what’s holding you back, there’s good news.
As of December 2024 the current average cost per watt in San Diego was $2.41. In 2025, there will be a federal tax credit available to cover 30% of the cost of a new clean energy system. It’s called the Residential Clean Energy Credit, and it can make a significant difference in the affordability of a solar system.
With its warm, sunny weather San Diego is a great place for solar panels. Here’s what to consider when determining the cost of a new system and its ongoing operating expenses.
How Are Solar Panel Prices Changing in 2025?
There are a number of factors influencing solar panel system pricing trends in 2025, including advancements in technology, changes to the supply chain, market demand, and government policies. New cell technologies can make a significant difference in how much solar panels cost in the future, and tax credits can add to the value of installing this type of system.
Perovskite cells, for example, offer higher rates for energy conversion, which could translate to a significantly lower cost for usage. When coupled with manufacturing improvements and efficiency gains, solar systems may become more mainstream rather quickly. That could be great news for anyone considering a solar system because it brings these systems into a lower price range that more homeowners can comfortably afford.
The Importance of the Supply Chain
Supply chain developments will also have an affect on pricing in 2025, since global sourcing is a big part of making solar panels and other system components.If there are increased global costs, trade tensions, or other disruptions, the cost of solar panels could climb. However, this may also encourage domestic production of components, which would bring prices down.
If you’re in San Diego and looking into solar panels it’s important to consider all the different ways that pricing for these panels could change in 2025. However, the tax credits are valuable and current prices are reasonable, so taking advantage of those benefits may be the right choice for your current needs. It’s possible that prices will come down in the future, of course, but that’s not a guarantee and you could start taking advantage of your sunny climate in 2025 instead of waiting.
How Much Does a Solar System Cost in San Diego?
The average cost of a solar power system in San Diego ranges from $10,000 to $20,000 for sizes between 3kW and 10kW. Of course, you’ll also want to account for the federal solar tax credit and the way it brings prices down. If you’re saving 30% that could bring your $10,000 solar system down to $7,000, which is a significant savings on such a large purchase.
While there are likely going to be price changes in 2025 it remains to be seen which direction those changes will take. If there are tariffs and trade restrictions that could drive up the prices of solar system components and overall solar panel pricing, at least until more US companies start manufacturing them. However, those restrictions aren’t guaranteed and it’s possible that increased demand and ongoing global manufacturing will mean lower prices for solar system customers.
The quality of the equipment for solar systems, along with the prices for labor and permits, all matter when choosing solar panels. These factors make a difference in the price of the final system. They need to be taken into account along with the tax credit, the $2.41/W market rate for energy, and other issues that can affect the cost of the overall system and its usage.
Factors Influencing Solar Panel Costs
One of the main factors influencing the overall cost of solar panels is the system size. Larger systems simply cost more, but you don’t want to choose a system that’s too small for how you intend to use it. With a solar system that’s not large enough for your home, for example, you won’t see the benefits you expect and may not experience the kind of return you were hoping for.
Equipment Quality
Another impact to the cost of your solar panels is the quality of the equipment. There are premium monocrystalline panels and standard panels, and they come with differences in price. Premium panels cost more upfront, but they generally come with better warranties, more durability, and improved efficiency. Over their lifespan they’ll produce more energy than a standard panel, which can mean increased value even though their original price is higher.
Installation Complexity
Installation is another factor that affects solar system cost. The roof type, its angle, and its height all matter, as some roofs are much easier to work with than others. If you have a flatter roof and a single-story house the installation costs will generally be lower than they would for a two-story home with a steeply pitched roof. Additionally, single roofs, tile roofs, and metal roofs all come with varying degrees of installation cost and complexity.
Additional Cost Considerations
Local permit costs, battery storage, and monitoring systems are all additional solar costs you’ll want to consider when you’re looking into a system. As of 2024, San Diego County was waiving the fees for all residential solar system permits. However, this may change in the future and it’s important to be aware of the potential for increased expenses. The size of the batteries and type of monitoring system you choose will also matter when looking into overall system costs.
What Solar Incentives Are Available in San Diego in 2025?
The biggest incentive for solar system installation in San Diego in 2025 is the federal tax credit, which is a savings of 30% of the installation cost. California also has a net metering program which can help San Diego residents save big, since your unused solar energy will be sent to the power company. You can receive credits for it that you’ll use during the nighttime hours, helping you save even more through the benefits of a solar system.
There are also local California solar incentives including the Single-family Affordable Solar Homes (SASH) program, the CSI solar rebate program for affordable, multifamily housing, a program that offers rebates for solar water heaters, and the New Solar Homes Partnership (NSHP) for home builders.
Your property tax also generally won’t increase when you add a solar system, even if it raises the value of your home, so you don’t have to worry about paying more in taxes due to energy upgrades.
How Much Can You Save with Solar in San Diego?
Everyone’s savings is different, but you can slash your energy bills when you switch to solar panels. Over 25 years, for example, you can expect a 5kW solar system to save you more than $84,000 in energy cost savings. It’s important to note that electricity rates rarely go down, and tend to rise over time. You may be able to save even more than projected, depending on how much energy you use and whether rates increase more rapidly than expected.
Because you have upfront costs when you choose solar it’s important to understand your ROI and payback period. Generally, a payback period for a solar system is around five to seven years, after which the system will have paid for itself and you’ll see a stronger return on the solar investment you made. While maintenance costs will still be involved, these costs are typically minor and won’t cut into your ROI too strongly.
Is Solar Worth It in San Diego in 2025?
San Diego is known for its high electricity rates, and solar can help offset these costs. Additionally, the abundant sunshine in the area means your solar panels will have plenty to work with as they create energy for your home. Despite the initial investment in a solar system the long-term financial benefits can be significant. If you’re not sure about making the move to solar, don’t let the upfront costs stop you. Over time you’ll recoup those costs and much more.
Environmental impacts are another important consideration for solar energy. When you reduce your carbon footprint it’s easier on the planet, and that can be a rewarding and valuable reason to switch to solar. The sun provides plenty of energy for the planet and you can take advantage of that without any increased pollution or stress on the earth. Choosing solar is a great way to do your part to help the planet continue while using a nearly infinite natural resource and saving money on your power bill, all at the same time.
How to Choose the Right Solar System Size
Choosing the right solar system size for your household is critical. You don’t want to have a system that’s too small or it won’t be able to do what you want. However, there’s no reason to invest in a system that’s too large for your home, because your batteries can only provide a certain amount of energy storage. The rest will be sent to the power company, but there are limits to that, as well. You don’t want to waste the potential energy your solar panels are collecting when the right size system will offer the balance you’re looking for.
When you look at systems of different sizes, though, it’s not just about the kWh usage on your electric bill. It’s also about the roof space you have available, whether there’s any shade, and the way your roof is oriented when compared with the sun’s path through the sky. You also need to consider future needs, especially if you plan to remain in your home for a long time.
Adding onto your home or purchasing electric vehicles may mean you need a larger system. The best way to ensure that you’re getting what you need from your solar system is to work with a professional. That helps you feel more confident and also reduces the chances that the system won’t fit your requirements.
Tips for Maximizing Solar Savings in 2025
To maximize your solar savings in 2025, select high-efficiency panels and inverters. Also, consider a battery storage system that gives you increased energy dependence. With good battery storage you’ll be able to keep more of the energy your panels produce, so you don’t have to rely on the electricity grid as much. That can help you make the most of your solar panels, for maximum value.
Understanding the available incentives can also help you maximize your savings, because you can time the installation to capitalize on these incentives as much as possible. Once your system is installed you also need to maintain it, because that will give you optimal performance for as long as possible. Most homeowners contract out their solar panel maintenance in order to make sure it’s done right and reduce any danger to themselves in the process. You don’t want to take the chance of falling off the roof while rinsing your panels.
Frequently Asked Questions
Are solar panels cheaper in 2025 compared to previous years?
Yes, due to advancements in technology and manufacturing, solar panels in California have become more affordable in 2025.
How does the 30% federal tax credit work in 2025?
The federal tax credit allows you to deduct 30% of your solar installation cost from your federal taxes.
How long does it take to recoup the cost of a solar panel system in San Diego?
The typical payback period for a solar panel system in San Diego is around 5 to 7 years, after which you’ll start seeing significant energy savings on your bills.
What size solar panel system do I need for my home in San Diego?
The size of your solar panel system depends on factors like your energy usage, roof space, and whether you plan to expand in the future. A professional installer can help you determine the right size based on your specific needs.
Are there any local incentives for installing solar panels in San Diego in 2025?
Yes, in addition to the federal tax credit, San Diego residents can benefit from local programs like the California solar initiative, Net Energy Metering (NEM) program, and rebates for solar water heaters, which help offset the costs of installation.
Learn More About the Cost of Solar in San Diego
Ready to find out more about how solar panels can help you save money? Get in touch with us at SolarTech today for a free consultation. We can provide you with a quote for a solar system that fits your home and your needs, so you can start seeing reduced energy bills and enjoying the benefits of solar energy.
We’ve been designing and building solar systems since 2001, and we focus on a targeted approach to homeowners and business owners who are looking for targeted solutions to save money and reduce their carbon footprint. By reducing energy costs we can help increase opportunities for families and individuals throughout the San Diego area.
We have financing options and flexible payment plans, so you don’t have to wait to get started. We’ll work with you and your budget to find the right system for your requirements and the lifestyle you enjoy. Contact us at SolarTech and start saving today!
SolarTech