Installing solar panels involves a significant upfront cost, but various financing options, including those offered by Sunnova, can make it more accessible.

Upfront Costs of Installing Solar Panels

The upfront cost of a solar panel system varies widely based on several factors, but here's a general breakdown:

• System Size (in kilowatts - kW): This is the primary driver of cost. A larger system designed to offset more of your electricity usage will naturally cost more.
  
• Cost Per Watt ($/W): This is a common metric for comparing solar quotes. In the U.S., the average cost per watt generally ranges from $2.50 to $4.70, depending on factors like location, installer, and system components.
  • For example, a typical 7.2 kW residential system might cost between $21,600 and $36,000 before incentives.
  • In Los Angeles, CA, as of June 2025, the average cost for a 5 kW system is around $11,016 before incentives.
• Equipment Type:
  • Solar Panels: Monocrystalline panels are generally more efficient and cost more than polycrystalline options.
    
  • Inverters: Microinverters or power optimizers (which optimize individual panel performance) are more expensive than string inverters.
    
  • Batteries: Adding a home battery storage system (like Tesla Powerwall or Generac) significantly increases the upfront cost, often by several thousand dollars per battery, but can provide energy independence and protection against outages.
• Installation Labor: This includes the cost of the crew preparing your roof, installing equipment, and connecting the system.
• Permitting and Inspections: Local building departments and utility companies require permits and inspections, which can add $500 to $2,000 to the cost.
• Soft Costs: These include overhead, customer acquisition (sales and marketing), design, engineering, and profit margins for the solar company. They can make up a significant portion of the total cost (sometimes over 50%).
  
• Additional Components: EV chargers, complex mounting systems (e.g., ground mounts), or specialized wiring can also add to the cost.

Important Note on Incentives: The prices mentioned above are generally before incentives. The most significant incentive is the federal solar tax credit (Investment Tax Credit - ITC), which allows qualifying homeowners to deduct 30% of the total installation costs from their federal income taxes. Many states and local utilities also offer additional rebates or performance-based incentives. These can significantly reduce your out-of-pocket expenses.

Sunnova Solar Financing Options

Sunnova, being a major solar provider, offers a variety of financing options to make solar accessible with varying upfront costs:

1. Cash Purchase (Least Upfront Cost for Sunnova, but Highest Overall Savings):
   • Upfront Cost: You pay the full system price upfront.
   • Benefits: You own the system outright, maximize your long-term savings, qualify for all available incentives (like the 30% federal tax credit), and increase your home's value. This option offers the highest net savings over the system's lifetime.
   • Sunnova's Role: Sunnova will handle the system design, installation, and ongoing monitoring and warranty support.
     
2. Solar Loan (Easy Own Plan™ Loan):
   • Upfront Cost: Typically low to no upfront cost, depending on the loan terms and your creditworthiness. You finance the system cost through a loan.
   • Benefits: You own the solar system from day one, making you eligible for the federal solar tax credit and any other state or local incentives. You'll have predictable monthly loan payments, and Sunnova often offers competitive APRs. Sunnova's Easy Own™ plan also includes up to 25-year system coverage (monitoring, repairs, replacements).
     
   • How it works: You take out a loan for the cost of the solar system, and you pay back the loan over a set period (e.g., 10, 15, or 25 years) with interest. Your monthly loan payment often replaces or is less than your previous electricity bill.
     
3. Solar Lease (Easy Plan™ Lease):
   • Upfront Cost: Often a very low or $0 upfront cost.
   • Benefits: You get immediate savings on your electricity bill without owning the system. Sunnova owns, monitors, maintains, and insures the system. You pay a predictable monthly payment to Sunnova for the right to use the solar panels and the electricity they produce.
     
   • Drawbacks: You don't own the system, so you are not eligible for the federal solar tax credit or other ownership-based incentives. If you sell your home, the lease typically needs to be transferred to the new homeowner or bought out.
     
4. Power Purchase Agreement (PPA) (Easy Plan™ PPA):
   • Upfront Cost: Typically low or $0 upfront cost.
   • Benefits: Similar to a lease, Sunnova owns, operates, and maintains the solar system on your property. Instead of a fixed monthly lease payment, you agree to buy the electricity produced by the solar panels at a fixed rate per kilowatt-hour (kWh), which is usually lower than your utility's rate. This provides predictable electricity costs and protection against rising utility rates.
     
   • Options: Sunnova offers variable billing (based on actual production) or balanced billing (a flat, predictable bill based on estimated production). Some PPAs also have a buyout option after a certain number of years.
     
   • Drawbacks: Like a lease, you don't own the system, so you don't receive the federal tax credit or other ownership incentives.

Which option is best for you depends on your financial situation, tax liability, and desire for ownership. Sunnova emphasizes providing flexible options to accommodate various budgets and preferences.

The amount you can save on your electricity bill by going solar is a significant driver for many homeowners. In Los Angeles, with its abundant sunshine and relatively high electricity rates, the savings potential is substantial.

General Savings Expectations in Los Angeles:

• Average Monthly Bill Reduction: Many sources indicate that homeowners in Los Angeles can expect to significantly reduce or even eliminate their monthly electricity bills. The average monthly electricity bill in Los Angeles can range from $104.14 to $275, depending on the source and specific utility provider (LADWP vs. SCE). By going solar, you aim to offset a large portion, if not all, of this consumption.
  
• Annual Savings: Estimates suggest annual savings could be in the range of $1,250 to over $2,500 in the first year alone.
• Long-Term Savings (20-25 years): Over the typical 25-year lifespan of a solar system, the total savings can be quite impressive, often ranging from $14,000 to over $100,000. This is largely due to the rising cost of electricity from the grid.
• Payback Period: The time it takes for your solar savings to offset your initial investment (before incentives) is known as the payback period. In Los Angeles, this is often estimated to be 7 to 9 years, though some sources suggest as low as 4-5 years depending on the specific system and incentives.
  

Example Scenario (Los Angeles):

• Average Usage: An average electricity customer in Los Angeles uses around 837 kWh per month, or approximately 10,044 kWh per year.
• Average Rate: Electricity rates in Los Angeles can vary. LADWP rates are around 23.0¢/kWh (as of 2023-2024 data), while SCE can be higher at 32.3¢/kWh. The average is around 25-29¢/kWh.
  
• Typical System Size: To offset 100% of the average annual electricity consumption in Los Angeles, a 4 kW to 5.6 kW solar panel system is often recommended.
• Potential Savings: For a typical 5 kW system in Los Angeles, some estimates suggest $104.14 in monthly savings, leading to significant long-term savings. Another source indicates that offsetting 100% of an average bill with a 5.6 kW system could lead to $2,500 in savings in the first year, $32,600 over 10 years, and $90,500 over 20 years (assuming a 5.9% annual increase in electricity prices).

Key Factors That Influence Your Solar Savings:

1. Your Current Electricity Consumption: The more electricity you use, the more you stand to save. Solar panels reduce the amount you need to buy from the utility.
   
2. Your Electricity Rate (and its future increases): Los Angeles (and California in general) has some of the highest electricity rates in the U.S. This makes solar more financially attractive, as you're offsetting more expensive power. Historically, electricity rates tend to rise over time (around 2-3% annually), so your savings will actually increase year after year.
   
3. System Size: A larger system that generates more electricity will offset a greater portion of your bill, leading to higher savings. However, there's a point of diminishing returns, and your system should be sized to meet your actual energy needs.
   
4. Sunlight Exposure (Roof Orientation and Shading): Panels facing south typically receive the most sunlight in the Northern Hemisphere. Any shading from trees, chimneys, or neighboring buildings will reduce production and thus savings.
   
5. Solar Panel Efficiency and Degradation: More efficient panels produce more power in a smaller footprint. All panels degrade slightly over time (around 0.5% per year), which is factored into long-term savings estimates.
   
6. Net Metering Policies: California has net metering, which allows you to send excess electricity your panels produce back to the grid and receive credits on your bill. This is crucial for maximizing savings.
   
7. Incentives and Rebates:
   • Federal Solar Tax Credit (ITC): Currently, a 30% tax credit on the total system cost significantly reduces your net investment, boosting your return on investment and overall savings.
     
   • State and Local Incentives: California offers various programs, though the primary financial benefit for most homeowners is the federal ITC and net metering.
   • Property Tax Exemption: In California, the value added to your home by solar panels is often exempt from property tax increases.
     
8. Financing Method:
   • Cash Purchase: Generally leads to the highest overall savings because you avoid interest payments.
   • Solar Loan: You still own the system and get the tax credit, but some savings go towards loan interest.
   • Lease or PPA: You typically have no upfront cost and get immediate monthly savings, but you don't own the system and don't receive the federal tax credit. Your savings are usually a percentage of your original bill.
     

To get a precise estimate of your potential savings, it's essential to:

• Analyze your past electricity bills: This helps determine your average monthly and annual kWh usage.