It’s no secret that California has one of the highest costs of living. There’s not much you can do to reduce your food or gas bills. But there is something you can do to reduce (or possibly eliminate) your utility bills; go solar.
Over the decades, we’ve witnessed solar panel costs drop further and further every year. We’ve also seen some attractive incentives thrown in to attract us to the lifestyle. But what does it take to install solar panels in Santa Cruz?
Let’s find out.
Solar System Installation Costs in Santa Cruz
If you’re living in Santa Cruz, California, as of May 2023, the average cost for installing a set of solar panels runs around $2.88 a watt. For context, a 5 kW solar setup would run you back $14,400. But wait, there’s more good news: you can grab some discounts by snagging solar tax credits.
Compared to other parts of this great nation, solar installation costs in Santa Cruz aren’t quite bad. The $2.88 per watt price tag is still cheaper than the national average ($3.00 per watt). I guess living in California can be cheap.
Breaking Down Solar Panel Installation Costs
The price of solar panel installation isn’t just about hardware and installation. There are permit fees, inspection costs, and the installer’s margin (the installer has to make a living too). All these costs add up.
Enough yapping from me; here are some visuals:
| Factor | Cost per kW |
| Tier 1 Solar Panels | 83¢ |
| Inverters | 32¢ |
| Racking and Balancing System | 32¢ |
| Sales and Marketing | 48¢ |
| Installation | 76¢ |
| Permits and Inspection | 16¢ |
| Installer’s Margin | 32¢ |
| Grand Total | $2.88 |
Factors Affecting Solar Panel Installation Costs in Santa Cruz
$2.88 per watt is what you can expect to pay for solar panel installation in Santa Cruz, California. The key phrase is “what you can expect.”
The final costs could be higher depending on different factors. Below are the various factors that influence the cost of installing solar panels in Santa Cruz.
Your Energy Needs
How big is your home’s appetite for electricity? If you’re going to fit a solar panel system in your home, you best install one that fits your energy needs. You need a solar panel system that generates enough energy to feed your power-hungry electronics.
How do you determine your energy needs? It’s a simple calculation. All you need is a list of all your electronic appliances, their individual watt rating, and their hours of usage. Check out this article for the specifics on calculating your energy needs.
If your home has an enormous appetite for power, you’ll have to get a bigger solar panel system. And bigger means more expensive.
Size of Your Solar Panel Installation
Where was I? Yes, bigger means more expensive. The larger the size of your solar panel installation, the deeper you’ll have to dig your pockets.
However, there’s something interesting; bigger installations cost less per watt. But the total cost increases with size. It’s like buying toilet paper in bulk at your local Costco. You’ll pay more because you’re buying many rolls. But the cost per roll is cheaper than buying a single roll of toilet paper.
Maybe this table will help you understand (pay attention to the cost per watt column).
| System Size in kW | Average Cost Per Watt | Average System Cost
(Before Tax Credits) |
| 4 kW | $3.13 | $12,520 |
| 5 kW | $3.02 | $15,100 |
| 6 kW | $2.88 | $17,280 |
| 7 kW | $2.86 | $20,020 |
| 8 kW | $2.89 | $23,120 |
| 9 kW | $2.80 | $25,200 |
| 10 kW | $2.78 | $27,800 |
Again, these prices are subject to discounts in the form of various solar incentives.
Solar Incentives in Santa Cruz
Besides giving us clean energy for low prices, installing solar panels in Santa Cruz comes with a bag of goodies. Let’s explore the perks you will enjoy after adopting that solar life.
The Investment Tax Credit (ITC)
The federal level is a nice place to start. The federal government offers every American a tax discount equivalent to 22% of the price of your solar installation. However, there’s a catch. The only way you can enjoy this discount is as a reduction of your tax liability.
Let me explain. You spent $15,000 on a solar panel system for your Scotts Valley home. Let’s say you owe the government $5,000 in taxes. The ITC grants you a tax credit worth 22% off your solar installation cost ($1,100). You can reduce your $5,000 tax bill by $1,100. Meaning you’ll only pay $3,900.
Complex stuff? Below is a video that will help you understand the ITC:
The federal ITC solar incentive used to be as high as 26%. But it reduced to 22% at the start of 2021, and it will go away at the beginning of 2024. Take advantage of this tax incentive before it disappears.
California Property Tax Exclusion for Solar Panel Systems
Anytime you spruce up your home with new construction or renovation, the local government orders a property reassessment. The structure could be a swimming pool, a guest house, or installing a solar panel system.
If you just installed a brand-spanking new solar panel system, the local government will not include the value that your solar installation adds to your property. So you can continue paying the same rates, despite your property value inflating by a few points.
Good things never last, and this incentive is set to expire on January 1st, 2025.
Property-Assessed Clean Energy (PACE)
Imagine if you had help in financing your solar dreams. Thanks to PACE, your dream can be a reality. The financial help comes in the form of a loan. It works like this; the local and state governments fund the initial costs of your solar project. And you pay back the local government through increased property taxes (usually for 20 years).
The PACE program is currently active in over 20 states, including the Golden State, California.
Top Solar Panel Installers in Santa Cruz
Do you find these solar incentives tantalizing? I’m sure you do. But before you can say bye to your utility company, you need a reliable solar panel installer. Below are the best solar panel installers in Santa Cruz.
Alpha Omega Electric
Alpha Omega (the beginning and the end); is a bold name for a bold company. They serve Santa Cruz, San Jose, Scott’s Valley, Watsonville, and Los Gatos. Among the services they offer are solar panel installation and repair for residential homes.
- Location: 2630 Orchard Street Space #22, Soquel, CA 95073
- Phone: +1 888-320-0933
Alterra Solar
Alterra Solar is a company on a mission. From its founders to its staff, everyone is passionate about saving the planet. Alterra Solar claims that they are a referral-based business, and it shows. They have completed thousands of successful solar installations.
- Location: 125-B McPherson Street, Santa Cruz, CA 95060
- Phone: +1 831-425-2608
Nomadic Solar
You may be wondering why the name “Nomadic Solar.” This solar panel installer serves many vans and RVs (#VanLife). So if you’re into that nomadic lifestyle, Nomadic Solar is the best installer for you. They also serve businesses, homes, and accessory dwelling units (ADUs).
- Location: 1146 Soquel Avenue #4203, Santa Cruz, CA 95062
- Phone: +1 831-222-0119
Poco Solar Energy Inc
Poco Solar Energy has been in operation since 1984. Their service catalog is quite diversified. Apart from installing pv panels for electricity generation, they also install solar-powered water tank and pool heaters. So if you don’t like cold showers or cold pools, call Poco Solar Energy Inc.
- Location: 3345 Keller Street, Santa Clara. CA 95054
- Phone: +1 408-970-0680
Sandbar Solar & Electric
Sandbar Solar & Electric (or simply Sandbar) has been in business since 2004. They take pride in their experienced crew and their contribution to the local community. Sandbar powers local events like concerts and sporting events.
- Location: 2656 Mission St, Santa Cruz, CA 95060
- Phone: +1 831-469-8888
Solar Electric Supply Inc
Solar panel installation may be their bread and butter, but Solar Electric Supply doubles in many other things. They specialize in power storage for remote living. They can set you up with a sweet off-grid system. And if you want a grid-tied system, they can do that too.
- Location: 108 Whispering Pines Drive #235, Scotts Valley, CA 95066
- Phone: +1 831-462-8243
Day One Solar
Besides solar panel installation, Day One offers system checks and energy storage solutions. They also install standby generators. So if you don’t want to deal with the inconvenience of power blackouts, Day One Solar should be on your speed dial. And they also install charging stations for EVs.
- Location: 387 Coral Street, Santa Cruz, CA 95060
- Phone: +1 831-687-8097
Installing Solar Panels in Santa Cruz: Things to Keep in Mind
Before you call your solar installer, there are still other things you need to consider. Below is the low down:
Peak Sunlight Hours
Solar panels use sunlight to generate electricity. The sun’s intensity is not uniform throughout the day. Therefore, we have peak sunlight hours when the sun is at its strongest.
In Santa Cruz, peak sunlight hours average 5.6 hours a day. But you can extend it by installing a solar panel system with a single or dual-axis tracking system. These are solar panels that alter their tilt angles depending on the position of the sun. It’s like a satellite dish that rotates around to find a strong signal.
Do you find this concept a little confusing, this video will help you out:
Now let’s see how many peak sunlight hours you get from different tilt angles.
| Solar Panel Tilt | Average Peak Sunlight Hours |
| Fixed tilt | 5.6 hours daily |
| Single Axis Tilt | 7 hours daily |
| Dual-Axis Tilt | 7.8 hours daily |
Solar Panel Tilt Angles
Santa Cruz sits along latitude 36.9788. For maximum sunlight exposure, it’s best to install your solar panels with a 37° tilt.
Final Thoughts
And that’s it; everything you need to know about installing solar panels in Santa Cruz. Let’s review the factors that are working for you:
- Installation costs are fairly cheap ($2.88 per watt, compared to the $3.00 national average)
- Santa Cruz is sunny all year round
- Many attractive solar incentives
Are you ready to fight the good fight and join the effort to save the planet?