How Much Does it Cost to Go Solar in San Jose?

San Jose homeowners who installed rooftop solar in 2022 paid an average of $29,632. The cost per Watt was just $4.50 – nearly a dollar per Watt cheaper than in Oakland! For homeowners eligible for the 30% federal solar tax credit, the net cost of installing solar in San Jose comes in at just over $20,000.

On November 8, 2021, San Jose became the largest city to set a goal of becoming carbon-neutral by 2030. This includes a Climate Smart goal of achieving 100% renewable energy by 2045. Thousands of homeowners in San Jose are helping to reach that goal each year by installing rooftop solar, while other residents are signing up for community solar.

In 2022, the average gross cost of home solar in San Jose was just under $30,000, making for a net cost of just over $20,000 for homeowners eligible for the federal solar tax credit. The cost per Watt was fairly similar in San Jose to that of Fresno and Sacramento, but a little pricier than San Luis Obispo and a little cheaper than San Francisco.

Most of the systems installed in San Jose in 2022 didn’t include battery storage. Those that did cost about a dollar more per Watt. While this makes for a higher upfront cost, solar storage can help slash monthly utility bills, making for a shorter solar payback period.

There’s a lot to chew on in the data, so here’s a deep dive into the cost of home solar in San Jose in 2022, based on real-life data from actual installations interconnected to Pacific Gas and Electric (PGE).

The cost of home solar in San Jose

Online home solar estimates are typically based on optimistic quotes from solar installers. This can be a little deceptive as many home solar installations aren’t straightforward and end up costing more than initial standardized quotes.

This is why I favor estimates based on real-life data from home solar installations completed and interconnected to the grid. Thankfully, California offers a treasure trove of such data, in the form of California Distributed Generation Statistics.

I took a look at the data for San Jose and here’s the breakdown of the average cost and size of rooftop residential solar installations in San Jose City in 2022, with and without storage. I’ve also included figures for the federal solar investment tax credit and net cost with that credit applied.

The numbers above come from an analysis of 955 installations for residential rooftop solar installations in San Jose City up to October 31^st, 2022. I omitted systems that paired solar with wind power or another alternative fuel source, and also left out systems installed by homeowners themselves and systems with electric vehicle charging.

The initial takeaway is that the average cost to go solar in San Jose in 2022 was $29,084. The average size of solar energy systems was 5.31 kW (AC). This gives us a per Watt cost of $5.48, which is quite high compared to the cost of solar in Fresno, San Luis Obispo, and Sacramento, and higher than in San Francisco too.

Storage versus no storage

Of the 955 home solar energy systems included in the data, 235 included at least some storage. The amount of storage varied widely, with some systems including more than 20 kWh of storage capacity but many others including less than 10 kWh.

Systems that did include at least some storage cost an average of $42,308. The average system size was 6.37 kW (AC), working out to a cost of $6.64 per Watt on average. While the average system size was around the same as for other places in California, the cost was quite a bit higher in San Jose. For instance, in San Luis Obispo, the average system with storage was sized at 6.41 kW but cost just $5.32 per Watt. In Sacramento, the cost per Watt was just $5.35 for systems sized 6.86 kW on average. The cost was fairly similar in San Jose San Francisco, though, with the latter seeing systems sized at 5.27 kW and costing $6.79 per Watt.

For systems without storage, the average cost was $24,792, for an average system size of 4.97 kW AC. This works out to a cost of $4.99 per Watt.

Getting really granular

The cost of going solar in San Jose depends on a range of factors. These include:

• How big a system you install
• How complicated your roof and system design are
• Which solar installer you use
• Which solar panels you choose
• Whether you add solar storage (and how much)
• Your eligibility for rebates and tax credits.

Larger, more complicated systems with storage, installed by more experienced solar installers, and that include the highest efficiency solar panels are likely to cost the most. The impact of all of these choices can be seen in the data from CDGS.

For instance, here are some of the most popular installers in San Jose for systems including storage, with a side by side comparison of average costs and cost per Watt.

As you can see, the cost per Watt is quite different between a Tesla installation and a Sunrun or SunPower installation. In fact, SunPower installations with storage cost nearly 44% more than a Tesla installation in San Jose in 2022! Tesla was also less expensive per Watt than Sunrun in Fresno and San Luis Obispo.

SunPower does offer the highest efficiency solar panels, though, with the X-22 series currently topping out at 22.2% efficient. At the other end of the price scale are Hanwha Q Cells, which are also good quality but a little less efficient. Here’s a comparison of installations using Q Cells and X-22 Series SunPower panels.

Note that there’s not a huge difference in the cost per Watt or the overall average system cost, with SunPower costing slightly more. Arguably, given the efficiency differences between these two types of solar panel, a SunPower installation that costs a few thousand more initially would more than pay for itself by producing more energy over the 25-year warranty period of both products.

See also: The best solar roofs

The takeaway

The nice thing about having all this CDGS data available is that San Jose homeowners can get a really good sense of the potential cost of a specific kind of installation. That means you can gather quotes and negotiate pricing based on more than overly optimistic online estimates that don’t reflect real life.

Overall, the cost of solar in San Jose is a little less than in Fresno and San Francisco but higher than in San Luis Obispo and Sacramento.

Is it worth going solar in San Jose? The short answer is that it depends. If you’re eligible for the federal tax credit or other incentives, and you pay a high cost of electricity currently, chances are you’d quickly recoup the initial cost of a home solar installation. What if your monthly utility bill is lower, though, and you don’t qualify for the federal tax credit? Working out your solar payback period is a great way to see if a solar energy system makes sense for your household.

How much energy do San Jose households use and how much does it cost?

Data from the Census tells us that there were 646,847 households in Santa Clara County in 2021, of which around half (324,376) were in San Jose City. Data from the California Energy Board tells us that residential electricity use in Santa Clara County in 2021 was 4272.76 gigawatt hours overall. By my calculation, that gives us an estimate of around 6605.52 kWh per household each year.

The cost of electricity in San Jose varies according to utility, but most homeowners paid around $0.34523 per kWh in March 2022. This is based on rates from PG&E and SJCE, courtesy of the California Public Utilities Commission.

To work out potential savings from going solar in San Jose and the likely solar payback period in various scenarios, we’re going to assume that the average homeowner in San Jose still pays the same rate as in March 2022. On that basis, the average annual household energy bill in San Jose would be around $2,280.

Most solar panels come with a 25-year warranty period, during which efficiency isn’t expected to drop by more than 15% or so. This means the output should stay fairly steady year on year for more than two decades. As of December 2022, though, the rate of inflation in the U.S. is 7.1%. This means that you can’t simply multiply that $2,280 figure by 25 to figure out how much you’ll save over 25 years by going solar. If math isn’t your thing, don’t worry: we run the numbers for you below to help you work out how much you might save by going solar at home in San Jose.

How much can you save by going solar in San Jose?

Let’s assume a homeowner installs a solar array that meets all their electricity needs. Let’s also assume an annual rate of inflation of 1.2% for the next 25 years. This is pretty unlikely, given the volatility of inflation, but it is based on an average rate of inflation historically in the U.S.

Here’s how much a homeowner in San Jose may see in savings after going solar in 2022/23:

• Over 5 years – $11,679
• Over 10 years – $24,076
• Over 15 years – $37,235
• Over 25 years – $72,210.

As of December 13, 2022, the U.S inflation rate was 7.1%, though. If that level of inflation stuck around for a while, San Jose homeowners who went solar now could be looking at savings more in line with the following estimates:

• Over 5 years – $13,140
• Over 10 years – $31,657
• Over 15 years – $57,748
• Over 25 years – $172,560.

How much you save by going solar will depend on your typical pattern of energy usage, how much you pay for electricity now and in the future, and the size and efficiency of the array you install. Digging into the abundance of data provided by CDGS is a great way to fine tune your estimated savings. This kind of calculation can better inform a decision to go solar than the standardized, overly optimistic quotes often provided by online marketplaces.

Putting it all together – Your solar payback period in San Jose

If the potential savings of a solar array are your main motivation for having a system installed, you’ll want to know your solar payback period. This is the length of time it takes to recoup your upfront cost of installing a system, after which the electricity it generates really is free!

We’ve put together a few scenarios below to offer guidance on possible solar payback periods with and without the federal solar tax credit and at different rates of inflation. For all of the scenarios, we’ve used the overall average cost per Watt for 2022 installations from the data set. This is because it’s very hard to determine the effect of solar storage on potential savings, given that storage can reduce reliance on the grid overnight and on cloudy days but also increase upfront and maintenance costs.

We’ve also assumed an array sized at 6.5 kW, which is around the average size of array (6.58 kW) installed in San Jose in 2022.

1. Assuming a 1.2% inflation rate and average energy use and costs

Gross cost of a 6.5 kW solar array = $4.50/Watt x 6500 = $29,250

Federal tax credit of 30% = $8,775

Net cost of solar = $20,475

Cost of electricity in San Jose = $0.34523 /kWh

Average electricity use in San Jose = 6605.52 kWh per year

Estimated cost of electricity for first 10 years = $24,076

Ten-year savings (assuming 90% of energy bill offset by going solar) = $21,668

Solar payback period = just under 10 years

• Assuming a 7.1% increase in electricity costs each year and average electricity use

Gross cost of a 6.5 kW solar array = $4.50/Watt x 6500 = $29,250

Federal tax credit of 30% = $8,775

Net cost of solar = $20,475

Cost of electricity in San Jose = $0.34523/kWh

Average electricity use in San Jose = 6605.52 kWh per year

Estimated cost of electricity for first 8 years = $23,481

Eight-year savings (assuming 90% of energy bill offset by going solar) = $21,133

Solar payback period = less than 8 years!

What if you get the CARES discount on electricity, though? Is it worth going solar in San Jose? For many homeowners, the answer may still be yes!

• Assuming a 1.2% increase in electricity costs each year and a 35% discount on electricity costs

Gross cost of a 6.5 kW solar array = $4.50/Watt x 6500 = $29,250

Federal tax credit of 30% = $8,775

Net cost of solar = $20,475

Cost of electricity in San Jose = $0.34523/kWh

Cost of electricity with 35% discount = $0.2244/kWh

Average electricity use in San Jose = 6605.52 kWh per year

Estimated cost of electricity for first 13 years = $22,451

Thirteen-year savings (assuming 90% of energy bill offset by going solar) = $20,206

Solar payback period = just over 13 years

• Assuming a 7.1% increase in electricity costs each year and a 35% discount on electricity costs

Gross cost of a 6.5 kW solar array = $4.50/Watt x 6500 = $29,250

Federal tax credit of 30% = $8,775

Net cost of solar = $20,475

Cost of electricity in San Jose = $0.34523/kWh

Cost of electricity with 35% discount = $0.2244/kWh

Average electricity use in San Jose = 6605.52 kWh per year

Estimated cost of electricity for first 11 years = $23,520

Eleven-year savings (assuming 90% of energy bill offset by going solar) = $21,168

Solar payback period = under 11 years

• Assuming a 2.4% inflation rate and average energy use and costs but no federal tax credit

Gross cost of a 6.5 kW solar array = $4.50/Watt x 6500 = $29,250

Federal tax credit of 0% = $0

Net cost of solar = $29,250

Cost of electricity in San Jose = $0.34523/kWh

Average electricity use in San Jose = 6605.52 kWh per year

Estimated cost of electricity for first 13 years = $34,314

Thirteen-year savings (assuming 90% of energy bill offset by going solar) = $30,882

Solar payback period = just under 13 years

Even for homeowners who can’t make use of the full 30% federal solar investment tax credit, the solar payback period in San Jose may be just 13 years. That means nearly all homeowners can enjoy more than a decade of free electricity during the typical warranty period of their solar panels. And after that, those solar panels will still continue producing electricity for free!

Final thoughts on the cost of going solar in San Jose

Residents of San Jose pay a high price for electricity and use a little more than their Oakland neighbors on average. Meanwhile, the average cost of a home solar installation in the city is similar to the cost in San Francisco and Oakland, lower than in Fresno, and several thousand dollars higher than in Sacramento and San Luis Obispo.

What does this all mean? In short, San Jose homeowners stand to save quite a bit on their monthly utility bills by installing rooftop solar. Even without the federal tax credit, most homeowners will earn back the initial cost of home solar in less than half the lifespan of the solar panels, giving them free electricity for over a decade under warranty and likely well beyond that outside of the warranty period. Assuming high inflation and rising energy prices stick around for a few years, San Joseans could recoup the cost of home solar in eight years in some cases!

As with elsewhere in the U.S., San Jose homeowners who are thinking about installing rooftop solar may want to run the numbers themselves, based on real-life data from actual installations in the city. Online quote marketplaces suggest prices that are nearly two dollars less per Watt than the real data provides. On a 6.5 kW array, that could mean around $13,000 difference in actual costs.

Note, too, that in 2019, the city established San José Clean Energy (SJCE). This is California’s largest single-jurisdiction community choice energy program and is part of the city’s strategy for achieving carbon-neutral status by 2030. The community-wide initiative has already seen nearly $1 billion invested in renewable energy and battery storage resources, with many of these coming online by the end of 2022. If home solar isn’t an option for you, check out SJCE for details of a clean energy tariff that could save you money and help transform San Jose into a clean, green city.