Background and Benefits


About a third of Palo Alto's electricity demand is met by utility-scale solar and 100 percent of Palo Alto's annual electricity demand is met by carbon neutral supply, meaning supply that is sourced from renewable or hydroelectric sources. Residential and commercial customers may still want to consider going solar.

How a grid-tied rooftop solar system works

Electricity generated by rooftop solar powers your home the same way that electricity coming from the grid does.


solar diagram


rooftop solar




A rooftop solar system converts sunlight into direct current (DC) electricity.






An inverter converts DC electricity from your solar panels into alternating current (AC) electricity, the type of electricity used by appliances, lights and other devices in your home.


main electric panel




Your main panel connects power supplies — such as rooftop solar and the utility grid — to circuits in your home. Those circuits include outlets that you can plug appliances and devices into, as well as switches that    you can use to direct electricity to where you need it.


utility meter




Your utility meter measures electricity that flows between your electric panel and the grid. The type of meter you have depends on which Net Energy Metering (NEM) program you are served by.






The grid is an interconnected network that delivers electricity from producers to consumers. The City of Palo Alto owns and operates a distribution network within the City. Distribution networks like Palo Alto's, along with transmission lines that bring electricity from large-scale producers to distribution networks, make up the grid. Your utility, City of Palo Alto Utilities (CPAU), provides electricity from the grid when your solar panels do not produce enough to meet your needs and compensates you for excess electricity that you export to the grid when your system generates more than you are using.





financial predictability

 1. Financial predictability

Investing in rooftop solar enable you to know how much your electricity will cost for many years to come.

grid benefits

 2. Grid benefits

Electricity generated on site does not have to travel miles to your home through transmission wires and other grid components. On-site electricity generation therefore minimizes transmission losses and reduces the need to replace grid components, such as transformers.


 3. Resilience

Consider tying your rooftop solar system to energy storage to reduce the impact of power outages on your home.

 History of solar in Palo Alto


 1980s ""

 Solar water heating program

CPAU becomes a leader in local solar development, starting with its solar water heater program, which provides incentives to encourage installations. In 2007, CPAU launches another solar water heater program.


Net energy metering is introduced in Palo Alto

NEM is a billing arrangement that compensates solar customers for the electricity they export to the
grid. For more information on NEM in Palo Alto, visit our Net Energy Metering Historical Context

 1999 PV Partners solar rebate program launches in Palo Alto

California passes legislation to allocate a portion of public benefits charges to renewables. CPAU utilizes these funds to provide rebates for rooftop solar installations.

 2007 PV Partners solar rebate program expands

With the passage of Senate Bill 1, the Million Solar Roofs initiative, the budget for CPAU's PV Partners program increases to provide incentives in the form of rebates for residential, commercial and nonprofit/public sector customers to encourage rooftop solar installations.

 2016 PV Partners solar rebate funds are completely reserved

Palo Alto's PV Partners solar rebate program is highly successful and is recognized as a top ten program nationally by the Solar Electric Power Association (now the Smart Electric Power Alliance, or SEPA) for multiple years in a row.

 2017 34 percent of electricity demand in Palo Alto is met by solar

CPAU ranks first in SEPA’s top ten municipal utilities for cumulative installed capacity in 2017 (watts
per utility customer). 33 percent is utility-scale solar and about 1 percent is local solar.

 2018 NEM 2 program

At the end of 2017, Palo Alto reaches its NEM 1 cap and transitions in 2018 to the NEM 2 program.
By the end of 2018, local solar is expected to meet 2.2 percent of Palo Alto's electricity demand.


 Growth of local solar in Palo Alto


 installed solar capacity


 number of installed systems

To see results of a Solar Potential Study done for Palo Alto in 2015, visit our Solar Potential in Palo Alto page.