Solar cost and payback

In this example Average Daily Usage was 14.58. 14.58 divided by 1.5 = 9.72, so 10 solar panels are needed

Typical cost of solar system

The cost is primarily driven by how much power your household needs. You can easily estimate this by looking for the box showing “Electric Usage This Period” on your PG&E bill (usually on page 3)*. Divide your Average Daily Usage by 1.5 — the result is a rough estimate of the number of solar panels you will need.**

A typical system at Rossmoor costs between $1400 and $1500 per solar panel***, completely installed. After you apply the 2020 tax credit, the cost is about $1000 to $1100 per panel.

Typical systems require anywhere from 6 to 12 panels, i.e. the total cost ranges from $6,000 to $13,200 after tax credit.

Payback

Typically your installer will size your system so that, over the course of an entire year, about 90% of your electricity will come from your solar system and 10% from PG&E. In the example shown above, the total billed by PG&E in that month was just under $150. The solar system would cut that to about $15, saving you about $135 each month on average. The example requires 10 panels, so the savings is about $13.50 per panel per month.  At $1000 – $1100 per panel, you will have recaptured your initial investment in 74 – 82 months (6-7 years) even if PGE’s rates don’t increase.

In reality, the PG&E’s rates are going to increase at 4.3% year or more.  This means that once you have recaptured your initial investment you go on saving an increasing amount each year for the entire 25 year life of the solar system.

Years 10 15 20 25
Net Return on Original Investment 98% 233% 406% 620%
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* Best if you look at the month with the highest usage, probably either December or July
Your installer will look at an entire year’s usage to calculate the precise size of system appropriate for your household
** This rule of thumb assumes state-of-the-art solar panels rated at 370W or above.
Lower power panels (300-310W) are cheaper per panel, but more of them are required, so the overall cost is about the same
*** System cost estimates based on 5 actual proposals received in early 2020