Solar payback in California

5.8 peak sun hours/day average. Residential electricity rate: 35.25¢/kWh.

Estimated payback by system size

Installed cost at 2.75$/W, accounting for 20% system-loss derate (inverter, wiring, soiling, temperature).

SystemAnnual kWhAnnual SavingsInstalled CostPayback
4 kW6,779 kWh$2,389.61$11,0004.6 years
6 kW10,169 kWh$3,584.42$16,5004.6 years
8 kW13,558 kWh$4,779.22$22,0004.6 years

Important notes

No incentives assumed: The federal residential solar investment tax credit ended after 2025. Some states and utilities still offer rebates or performance-based incentives; check with your utility.

Full self-consumption or net metering: Savings assume you use all generation on-site or export at retail rates via net metering. Some utilities buy surplus power at wholesale rates, which would reduce savings.

Your site specifics matter: Roof shade, orientation, system degradation, and your actual utility tariff (demand charges, time-of-use rates, fixed fees) can significantly change payback.

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Electricity rates in California