Are Solar Batteries Worth The Price?

Why Utility Costs Matter in the Solar Battery Discussion

California’s electricity rates are among the highest in the country, with rates continuing to rise due to grid infrastructure costs, wildfire mitigation, and other factors. Here’s a breakdown of average rates from the most common utility providers:

• PG&E (Pacific Gas and Electric): The average residential electricity rate is approximately 48 cents per kilowatt-hour (kWh).
• Southern California Edison (SCE): Rates average around 30–40 cents per kWh, depending on time-of-use (TOU) pricing.
• IID (Imperial Irrigation District): IID offers lower rates, averaging 19 cents per kWh, but solar production is highly efficient in areas like Indio and La Quinta due to abundant sunshine.

The key question is whether the combined cost of solar panels and a battery can beat these rates. For most California homeowners, the answer is yes.

The Cost of Solar and Batteries Compared to Utility Rates

Solar + Battery Cost Per kWh

The average cost of solar power combined with a battery system in California is approximately 18–20 cents per kWh. This figure includes the cost of the solar panels, the battery, and installation.

When compared to utility rates like PG&E’s 48 cents per kWh, the savings are substantial. Even in IID’s territory, where rates are lower at 19 cents per kWh, solar and battery systems can still be cost-competitive due to higher energy production from the abundant desert sun.

The Role of Net Metering 3.0

Under California’s new Net Metering 3.0 (NEM 3.0) rules, homeowners receive lower compensation for excess solar energy sent back to the grid. This makes self-consumption—using solar energy stored in a battery during peak demand periods—more financially advantageous.

For example:

• Without a battery: Excess solar energy exported to the grid under NEM 3.0 is valued at only 8–10 cents per kWh.
• With a battery: Stored energy can be used during peak demand when rates are highest (e.g., 40–50 cents per kWh), maximizing savings.

How Solar Batteries Reduce Costs and Add Value

1. Avoiding Peak Utility Rates

California’s utility companies use time-of-use (TOU) pricing, where electricity is most expensive during the late afternoon and evening when solar panels aren’t generating power. A solar battery stores excess energy produced during the day, allowing homeowners to use it during peak hours instead of relying on expensive grid power.

2. Energy Independence

With a solar battery, homeowners are less dependent on the grid, providing peace of mind during outages. This is especially important in California, where Public Safety Power Shutoffs (PSPS) have become more common to mitigate wildfire risks.

3. Future-Proofing Against Rate Increases

Electricity rates in California have risen consistently over the years and are expected to continue climbing. By investing in solar and battery storage, homeowners lock in a lower cost of energy for the next 20–25 years, shielding themselves from future rate hikes.

Comparing Costs by Utility Provider

PG&E Customers

With rates averaging 48 cents per kWh, PG&E customers stand to benefit the most from solar and battery systems. Even at 18–20 cents per kWh, the cost of solar is less than half of PG&E’s rates. Over the lifespan of a solar and battery system (typically 20–25 years), these savings can amount to tens of thousands of dollars.

Southern California Edison (SCE) Customers

For SCE customers, rates typically range from 30–40 cents per kWh, depending on the time of day. A solar battery system allows homeowners to avoid the highest TOU rates, particularly during the evening peak period. The combination of savings and backup power during outages makes solar batteries a worthwhile investment.

IID Customers

IID offers lower rates at around 19 cents per kWh, but the higher solar production in the Coachella Valley offsets the cost of solar and batteries. Thanks to the region’s abundant sunshine, solar panels produce more energy per panel, reducing the overall cost per kWh of a solar system.

The Additional Benefits of Solar Batteries

Backup Power During Outages

California’s power grid faces frequent challenges, from wildfire risks to infrastructure failures. Solar batteries provide reliable backup power, keeping essential appliances and systems running during outages.

Environmental Impact

Using stored solar energy reduces reliance on fossil fuels, lowering greenhouse gas emissions and contributing to a more sustainable future.

Increased Home Value

Homes equipped with solar and battery systems are more attractive to buyers. Studies show that solar installations increase property values, particularly in energy-conscious markets like California.

Federal Tax Incentives

The 30% federal tax credit applies to the total cost of solar panels and battery storage, significantly reducing the upfront cost. For example, a $30,000 solar and battery system would qualify for a $9,000 tax credit, bringing the net cost down to $21,000.

Is a Solar Battery Worth the Price for You?

To determine whether a solar battery is worth the price, consider the following:

1. Your Utility Rates: If you’re paying high rates (e.g., PG&E’s 48 cents per kWh), the savings from solar and battery storage are substantial.
2. Your Energy Consumption: Households with high evening energy usage benefit the most from battery storage.
3. Your Location: In sunny areas like the Coachella Valley (IID territory), higher solar production drives down the cost of energy, making solar and batteries even more cost-effective.
4. Your Need for Backup Power: If you experience frequent outages or want energy independence, a solar battery is a valuable investment.

Conclusion: Solar Batteries Are Worth It in California

For California homeowners, the combination of rising utility rates, time-of-use pricing, and NEM 3.0 rules makes solar batteries an increasingly smart investment. By combining solar panels with battery storage, you can achieve energy independence, lower your electricity costs, and protect your home from power outages—all while contributing to a more sustainable future.

At Supreme Solar & Electric, we specialize in helping homeowners find the perfect solar and battery solutions for their needs.

Contact us today to schedule a free consultation and learn how solar and battery storage can transform your energy future.