Assumes 3%/yr rate increases, 0.5%/yr panel degradation and no federal tax credit (the 30% §25D credit ended for systems installed after Dec 31, 2025). How we calculate
Data approachEIA rates · NREL sun hours · 2026 federal policy · methodology
In 2026 a modeled 7 kW solar system on a Los Angeles home served by LADWP costs about $21,000 installed (at $3.00 per watt), saves roughly $2,540 in year one, and has a simple payback of about 8.3 years. LADWP is a city-owned utility, so California’s NEM 3.0 export cuts do not apply. The 30% federal credit is gone for systems installed after December 31, 2025.
That combination makes LADWP territory one of the stronger places left in California to buy solar without a battery. Customers of Southern California Edison, PG&E and SDG&E who connected after April 15, 2023 receive far less for exported power under the Net Billing Tariff, while LADWP credits exports at the retail rate.
How we calculated this: 7 kW × 5.8 peak sun hours (see our state data) × 365 × 0.82 system efficiency ≈ 12,150 kWh/yr. At an assumed ~24¢/kWh blended LADWP rate and a 0.87 bill offset, year-one savings ≈ $2,537. Savings grow 3% a year with rates and shrink 0.5% a year with panel degradation. These are modeled estimates, not a quote. Full details are on our methodology page.
⚖️ Policy & Net Metering
Does NEM 3.0 Apply to LADWP Customers in 2026?
No. NEM 3.0, officially the Net Billing Tariff, covers only the three investor-owned utilities regulated by the California Public Utilities Commission: PG&E, SCE and SDG&E. LADWP is a municipal utility and sets its own metering policy.
Under LADWP’s net metering program (listed in DSIRE), excess kilowatt-hours are credited to your next bill at the retail rate. Credits cannot offset taxes, minimum charges or other non-energy charges, and a balance remaining when you terminate service is granted to the utility. DSIRE lists a 1 MW system cap and does not allow meter aggregation.
A homeowner just outside the city on SCE receives export credits well below retail under the Net Billing Tariff, which is why most new IOU solar systems are now paired with batteries. LADWP customers can still use the grid as a “virtual battery.”
LADWP’s board can revise its rider at any time, so confirm current rules with LADWP before signing a contract.
Is your home on LADWP? LADWP serves the City of Los Angeles. Nearby cities such as Culver City and West Hollywood are served by SCE, and Burbank, Glendale and Pasadena run their own municipal utilities. Check the utility name on your electric bill.
💰 System Cost
How Much Does Solar Cost in Los Angeles in 2026?
At our $3.00/W model price, a 7 kW system costs about $21,000 and a 10 kW system about $30,000, with no federal credit to subtract. For reference, EnergySage reports a marketplace average of about $2.60/W before incentives, and Lawrence Berkeley National Laboratory reported a 2024 median of $3.50/W for cash purchases. Your quotes may fall on either side of our model.
Installed cost by system size (model: $3.00/W, no federal credit, 2026)
System size
Panels (400 W)
Installed cost
Est. annual output in LA (5.8 psh)
5 kW
13
$15,000
~8,700 kWh
7 kW
18
$21,000
~12,150 kWh
8 kW
20
$24,000
~13,900 kWh
10 kW
25
$30,000
~17,400 kWh
A household using about 900 kWh a month (10,800 kWh a year) needs roughly 6-7 kW to cover its annual use in this model.
Data visualization
Installed cost by system size. A 7 kW system is about $21,000 at the $3.00/W model price, before any incentives. Source: GreenEnergyCalc model ($3.00/W x kW); EnergySage marketplace average about $2.60/W, LBNL 2024 cash median $3.50/W.
Chart summary: Cost scales linearly with size at the model price: $15,000 for 5 kW, $21,000 for 7 kW, $24,000 for 8 kW and $30,000 for 10 kW. Because EnergySage reports about $2.60/W and LBNL reports $3.50/W, a real 7 kW quote could range from roughly $18,200 to $24,500. No federal credit is subtracted.
What happened to the federal credit? Until December 31, 2025, homeowners could claim 30% of system cost under §25D. The One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) ended the credit for expenditures made after that date (IRS FAQ). Leases and PPAs are structured differently, and whether an installer can pass through any business-credit value depends on its own eligibility under current law; no specific discount is guaranteed. This is not tax advice; confirm with a tax professional.
What incentives are left in Los Angeles? California has no state solar tax credit. California’s property-tax exclusion for active solar energy systems is currently scheduled to sunset on January 1, 2027, unless the legislature extends it; systems that qualify before then generally keep the exclusion until a change of ownership, per the State Board of Equalization. Sources disagree on whether LADWP currently offers a direct solar rebate, so this article’s model assumes none; ask LADWP and your installer. Use our solar tax credit calculator to check what still applies to your purchase date.
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📋 Key Insights
Why Do LADWP Rates Make Solar Pay Off?
Because net metering credits every exported kWh at roughly the retail rate, and tiered rates mean solar offsets your most expensive kWh first. We model a blended rate of about 24¢/kWh; published 2026 estimates for LADWP residential rates run roughly 24-28¢/kWh depending on tier, zone and season, so check your own bill.
Under the standard R-1A schedule, the price per kWh rises as monthly usage climbs through tiers, and summer high-use months cost the most. A household that regularly reaches the top tier pays well above the blended average for its marginal kWh, so each solar kWh is worth more to it.
LADWP also offers a time-of-use plan (R-1B). Solar homes that shift EV charging, dishwashing and laundry to midday may raise the value of each solar kWh. Model your usage before choosing a plan.
Our model assumes rates rise 3% a year; faster increases improve solar returns, slower ones reduce them. Use our solar savings calculator to test different escalation rates against your own bills.
📋 Key Insights
LADWP vs. SCE: How Much Is the Utility Difference Worth?
For the same 7 kW roof, our model gives about $2,540 in year-one savings on LADWP versus about $2,140 for a solar-only SCE home under NEM 3.0, even though SCE’s rates are higher. The difference comes from how exports are credited.
LADWP vs. SCE, same 7 kW system (model: $21,000 installed, 5.8 psh, no federal credit, 3%/yr rate growth, 0.5%/yr degradation)
LADWP
SCE (NEM 3.0, solar only)
Rate used
~24¢/kWh blended
29.4¢/kWh (model assumption)
Export credit
Retail
Far below retail
Bill offset used
0.87
0.60 (model assumption)
Year-1 savings
~$2,540
~$2,140
Simple payback
~8.3 years
~9.8 years
25-year net savings
~$65,500
~$52,100
The SCE offset and rate are our modeling assumptions, not published tariff figures; actual results vary with usage and rate plan. On NEM 3.0, homes that export a lot of midday power are hit hardest, which is why most new SCE and PG&E solar systems include a battery.
Data visualization
LADWP beats SCE by about $13,400 over 25 years. Modeled 25-year net savings for the same 7 kW, $21,000 system: about $65,500 on LADWP versus $52,100 on SCE solar-only. Source: GreenEnergyCalc model; SCE rate and offset are assumptions.
Chart summary: Under the same 3% rate growth and 0.5% degradation, the LADWP home nets about $65,500 against about $52,100 for the SCE home, a gap of roughly $13,400. The gap comes from export crediting and the 0.87 versus 0.60 bill-offset assumptions, not from the sticker price.
Solar vs utility company · 25-year comparison
25-year totals: 3%/yr rate increases, 0.5%/yr degradation, no federal credit. Methodology
What Is the Payback and 25-Year Return for an LADWP Home?
Simple payback is about 8.3 years ($21,000 ÷ $2,537 a year). With 3% annual rate growth, cumulative cash flow turns positive around year 7.6, and modeled net savings reach roughly $65,500 over 25 years. The 25-year figure already subtracts the full installed cost. To see how your state compares, our guide to Solar Panel Payback Period by State has the full data.
Data visualization
Cumulative cash flow, 7 kW system, years 0 to 25. LADWP turns positive near year 7.6 and reaches about +$65,500; SCE solar-only reaches about +$52,100. Assumes 3%/yr rate growth, 0.5%/yr degradation, no incentives. Source: GreenEnergyCalc model.
Chart summary: In this model the LADWP system starts at -$21,000, is about -$7,670 at year 5, turns positive near year 7.6, and reaches about +$7,400 at year 10, +$24,400 at year 15, +$43,700 at year 20 and +$65,500 at year 25. The SCE solar-only line starts at the same cost but climbs more slowly, ending near +$52,100. Assumptions: 3%/yr rate growth, 0.5%/yr degradation, no incentives; these are estimates, not a quote.
Panels typically lose about 0.5% of output a year, so a system is at roughly 88% of original output by year 25; the model includes this. Without solar, the same household would spend about $106,300 on electricity over 25 years at a $243 average monthly bill growing 3% a year.
Size carefully. Because leftover LADWP credits are forfeited when you terminate service, size to about 100% of your last 12 months of use, plus any planned electrification. Use our solar ROI calculator with your actual LADWP bill, roof orientation and shading for a project-specific estimate.
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Yes. Per DSIRE, LADWP credits excess generation to your next bill at the retail rate. Credits roll forward but cannot offset taxes, minimum charges or other non-energy charges, and any balance left when you terminate service goes to the utility. Confirm the current terms with LADWP before signing a contract.
No. NEM 3.0 (the Net Billing Tariff) applies to the investor-owned utilities regulated by the CPUC: PG&E, SCE and SDG&E. LADWP is city-owned and sets its own net metering policy. Its board can change that policy, so verify the current rules before you install.
At this article's $3.00/W model price, a 7 kW system costs about $21,000 and a 10 kW system about $30,000. EnergySage reports a marketplace average near $2.60/W, while Lawrence Berkeley National Laboratory put the 2024 median cash price at $3.50/W, so your quotes may land on either side of our model. The 30% §25D credit ended for systems installed after December 31, 2025.
In our model, a 7 kW system makes about 12,150 kWh a year (7 kW × 5.8 peak sun hours × 365 × 0.82). At a ~24¢/kWh blended rate and a 0.87 bill offset, year-one savings are about $2,540. Simple payback is $21,000 ÷ $2,537 ≈ 8.3 years; allowing for 3% annual rate growth and 0.5% panel degradation, cumulative cash flow turns positive near year 7.6. Your result depends on your tier, rate plan and quote.
Not for the economics in this model. Because LADWP credits exports at retail rates, the grid works like a full-value battery, so solar-only systems can pencil out. A battery is mainly for outage backup. Rebates such as SGIP are tied to investor-owned utilities, so confirm eligibility with your installer before counting on one.
$243/month electric bill by state
System size and payback vary by electricity rate and sun hours — see your state.
33.25¢/kWh — California average residential price. Source: EIA Electric Power Monthly, Table 5.6.B (year-to-date through July 2026), residential average retail price (July 2026) (EIA)
Solar production
5.8 peak sun hours/day × 0.82 system derate. Approximate state-average daily solar resource (peak sun hours) based on NREL solar resource data (NSRDB); not location-specific — use NREL PVWatts for an address-level estimate. (NREL PVWatts)
Installed price
$3.00 per watt before incentives. Blended 2026 US residential installed price used by this site; EnergySage marketplace reported about $2.60/W (mid-2026); full-market medians are higher.
Federal tax credit
$0 for homeowner-owned systems installed in 2026 — the 30% §25D credit ended Dec 31, 2025 (IRS)
Net metering
Low export credit (battery usually needed) — solar assumed to offset 60% of the bill. California's Net Billing Tariff (NEM 3.0, since April 2023) credits exports at a fraction of retail, so solar-only systems save far less than before and batteries improve returns.
Estimates only — not tax, legal or financial advice. Get at least three installer quotes and confirm incentives with your utility and a tax professional.