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Is Solar Worth It in Davis, California?

We analyzed Pacific Gas & Electric (PG&E) rate books, NREL irradiance data, and California tax codes to calculate the real ROI for homeowners in 95616.

Market Snapshot

Elec. Rate
$0.27/kWh
Sun Hours
5.98
Utility Pacific Gas & Electric (PG&E)
Tax Exempt Yes
Battery Required

Analyst Note: The "4kW Benchmark"

The analysis below uses a standardized 4kW system to provide a fair baseline comparison across cities. However, the average electric bill in Davis is $216.0.

⚠️ Most homes here will need a larger system (8kW–12kW) to reach 100% offset. Use the calculator below for your exact numbers.

With PG&E electricity bills averaging over $216 in Davis and Time-of-Use rates spiking on hot summer afternoons, many homeowners are looking to solar for relief. But since the 2023 shift to Net Billing (NEM 3.0), the game has changed. Going solar is no longer just about panels; it's about pairing them with a battery to achieve true energy independence and protect your investment.

Benchmark Cost Analysis

How Much Does a Solar + Battery System Cost in Davis?

To truly offset PG&E's high rates, a solar and battery storage system is the new standard. While a solar-only installation might seem cheaper upfront (around $8,050 after credits), its savings are drastically cut by NEM 3.0's low export rates. That's why most Davis homeowners are now opting for a combined system.

  • Gross System Cost (Solar + Battery): Approximately $23,500
  • Federal Tax Credit (30%): -$7,050
  • Your Net Cost in Davis: $16,450

This investment secures your energy during peak-rate hours and provides reliable backup power, making it a smarter long-term financial decision than panels alone.

Incentives & Tax Credits

Davis Solar Incentives and Tax Credits (2026)

The primary financial incentive is the 30% Federal Residential Clean Energy Credit, which immediately reduces your system cost by thousands. In California, you also benefit from:

  • Property Tax Exemption: Your home's value will increase, but your property taxes won't, thanks to the Active Solar Energy System Exclusion.
  • Financing Options: Many installers offer financing that results in a monthly payment lower than your current average electric bill.

Net Metering: Pacific Gas & Electric (PG&E)

Policy Status

NEM 3.0 (2023)

Battery Priority

Critical 🔋

Understanding PG&E's Net Billing (NEM 3.0)

The biggest hurdle for solar in Davis is NEM 3.0. Under this policy, the excess energy you send back to the grid is credited at a very low "avoided cost" rate, often just 5-8 cents per kWh. This is a massive drop from the old retail rates. A battery solves this problem. Instead of exporting cheap power, you store it and use it yourself, maximizing the value of every kilowatt-hour your panels generate. Without a battery, your payback period stretches, and your monthly savings shrink significantly.

Projected Savings

Real Savings with a Battery Under NEM 3.0

A typical Davis household can expect to slash its annual PG&E bill by around $1,678 with a solar and battery system. This strategy works by storing the clean energy your panels produce during the day—when PG&E's export credits are low—and using it to power your home during the evening peak, when electricity is most expensive. The payback period for this kind of system is about 9-10 years, after which you enjoy decades of nearly free power. The Central Valley's ample sunshine, delivering 5.98 kWh/m² daily, ensures your system performs reliably year-round.

Local Questions Answered

Do solar panels still work during cloudy Davis winters?
Yes. While production is lower than on a bright sunny day, modern panels are efficient enough to generate power from diffuse sunlight. Your system is designed based on annual production, accounting for seasonal weather variations to meet your energy goals.
What happens if I sell my house with a solar system?
Homes with solar and battery storage systems typically sell faster and for a premium. Studies from Zillow show a significant increase in home value, and your system's ownership is fully transferable to the new owner.
Why is the solar-only payback so misleading?
The 6-7 year payback for a 'solar-only' system is based on ideal conditions that no longer exist under NEM 3.0. It assumes you can use 100% of the solar you generate instantly, which is impossible. A battery makes your savings real by allowing you to time-shift your energy use.

Calculate Your Solar Savings

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* Calculations based on Pacific Gas & Electric (PG&E) residential rates (0.27/kWh).

Data Transparency & Methodology

Estimates for Davis, California are produced by the SunCents Solar Engine (v1.2). We combine the following verified or standard industry sources:

Performance (PV production)

NREL PVWatts — modeled annual and hourly AC output (kWh), solar radiation, and system losses for a standardized array size so cities can be compared fairly.

nrel.gov

Electricity rates (tariffs)

U.S. Energy Information Administration (EIA) — state-level average retail electricity prices ($/kWh) and supporting series for economic context.

eia.gov

Incentives & programs

DSIRE — state and local rebates, net metering, and policy programs (summarized for readability; always confirm eligibility with a tax or solar professional).

dsireusa.org

Federal tax credit (ITC)

Investment Tax Credit — federal residential solar credit (e.g. 30% of qualified costs where applicable); rules change with statute—verify with a qualified advisor.

energy.gov

Utilities & interconnection

Where shown, local utilities (e.g. APS, PG&E, FPL, and other IOUs or munis) are mapped from public interconnection, tariff, or service-territory references so net metering and rider rules match your area—not generic national averages.