California consistently ranks among the best states for solar panel installation and currently holds the number one spot, according to the Solar Energy Industries Association.
Even with a strong ranking, however, many Californians feel hesitant about installing solar panels in 2025.
The reluctance is due, in large part, to the loss of 1:1 net metering. When NEM 3.0 replaced 1:1 net metering in 2023, compensation rates dropped for solar energy sent to the grid.
But that doesn’t mean solar doesn’t make sense in California anymore.
In reality, installing residential solar panels is one of the smartest moves you can make this year to save money and prepare your home for an uncertain future.
Understanding NEM 3.0—What Actually Changed?
First, it’s helpful to understand NEM 3.0 and its impact on rooftop solar in California. The headlines make it sound like a death sentence for California solar, but that’s not necessarily the case.
NEM 3.0, which went into effect in April 2023, applies to new solar customers of California’s three major investor-owned utilities (PG&E, SCE, and SDG&E). Under this policy, the amount homeowners are paid for the solar electricity they send to the grid dropped by roughly 75% compared to NEM 2.0.
This doesn’t sound great, but it’s not all bad. Under NEM 3.0:
- You still save on every kilowatt-hour of electricity you use from your solar panels.
- You can still export energy and earn utility credits—just not as much as before.
- If you pair your solar system with a battery, you can avoid most of the downsides of NEM 3.0.
It’s impossible to deny that the loss of 1:1 net metering was a blow. At the Clean Energy Connection, we are strong proponents of better policy to support clean energy solutions like rooftop solar. But we don’t want Californians to miss out on the persisting benefits of solar panels.
Why Solar Still Makes Sense in 2025
Solar panels work best in sunny locations, and they have the highest financial benefits for homeowners who pay a lot for electricity. That makes California the ideal location for solar, with or without net metering.
1. Year-Round Sunshine
California is one of the sunniest states in the country—most areas see around 260 sunny days per year. With all that free energy available for the taking, you can easily generate enough electricity with solar panels to make the investment worth it.
2. Obscene Electricity Rates
We pay some of the highest electricity rates in the country in California and they keep on rising. Even if you only cover some of your electricity costs with solar power, you’ll break even on your investment quickly.
3. Solar Costs are Coming Down
Despite everything, solar panels are more affordable right now than they’ve ever been before. The technology is constantly improving. As a result, prices have fallen by 42% over the past decade.
Meanwhile, there are excellent incentives available. The 30% federal solar tax credit is still hanging on despite attempts to gut the Inflation Reduction Act, which supports it. With the tax credit, you’ll get 30% of your investment back on your taxes the year you go solar.
Benefits of Solar Panels in California
Installing solar panels for your home has so many benefits. You’ll save money, of course, but that’s not the only reason to go solar. You will also create more security for your family while significantly reducing your reliance on fossil fuels.
Lower Electric Bills
Every kilowatt-hour your solar panels produce is one less you have to buy from the utility. That’s hundreds of dollars back in your pocket every month. Once your system is paid off, your electricity is essentially free.
Freedom from Utility Rate Hikes
Solar panels don’t just save you money now. They also shield you from utility price hikes, which are happening more and more frequently.
Control Over Your Electricity
With solar panels and a battery backup system, you gain a rare and valuable thing: certainty. No matter what happens with the California electric grid or even the world at large, you can count on your home to have power.
Backup Power
With solar plus battery storage, you can use stored electricity during a power outage. That kind of security is priceless as we face more and more power outages due to a failing and overstressed grid, extreme weather, and raging wildfires.
Reduce Your Fossil Fuel Dependence
Installing home solar panels is one of the most impactful things you can do to reduce your environmental impact.
Interested in Solar? Start Here
In most cases, solar is worth it in California—but only if your system is designed for your home and electricity needs. The right installer will help you make a smart, informed decision, ensuring your system is properly sized to maximize output and long-term savings.
The Clean Energy Connection makes it easy to find reliable solar installers near you in California.
Our free directory connects you with top-rated, verified solar contractors in California. There’s no spam and no sales pressure. Just qualified professionals with a proven track record of delivering high-quality solar solutions that save homeowners money.