The Bay Area likes to tout its clean, green reputation, but when it comes to installing solar, Southern California shines brightest. San Diego and Los Angeles lead the state in rooftop solar installations, according to a report released today by Environment California’s Research & Policy Center.

San Jose comes in third with more than 2,700 rooftop installations, while San Francisco comes in fourth with more than 2,400 (though it’s fifth in terms of overall capacity). San Diego leads with 4,500-plus installations producing almost 37 megawatts of electricity.

“I think the story with San Diego is that the city was an early and very consistent adopter of solar power,” says Michelle Kinman, clean energy advocate with Environment California Research & Policy Center. “San Diego also has a really well coordinated working relationship between the local elected officials, the utility, the solar industry and the advocacy community.”

Several of the top cities on the list have doubled their solar capacity in just the last two years. In 2000, California had fewer than 1,000 rooftop installations. That’s grown to 100,000 installations in 2011, which makes up more than one gigawatt of distributed energy. “Solar is really taking hold,” says Kinman. “The costs are coming down. We’ve had solar policies at the state and local level for several years and they’re proving themselves.”

[module align=”right” width=”half” type=”aside”]
Top Rooftop Solar Cities in CA
through August 2011

1. San Diego – 36,775 kW
2. Los Angeles – 36,174 kW
3. San Jose – 30,617 kW
4. Fresno – 22,444 kW
5. San Francisco – 16,731 kW
6. Bakersfield – 16,223 kW
7. Sacramento – 15,911 kW
8. Santa Rosa – 14,015 kW
9. Oakland – 9,860 kW
10. Chico – 9,490 kW [/module]

Kinman says they’re seeing solar spread throughout the state to the “agricultural and industrial hubs of the Central Valley. Solar power is really taking hold in both rural and urban areas across the state.”

The solar industry has certainly had a boost from rapidly falling prices on solar photovoltaic panels, which dropped a whopping 50% in 2011 alone. Industry analysts say prices could keep falling. According to GTM Research, an oversupply of high purity silicon (a source material for solar panels) could drive down silicon prices this year, which means manufacturers could sell panels for even less.

Rooftop solar has also grown thanks to solar-leasing programs, where consumers realize cost-savings immediately, instead of buying the solar system themselves. Solar leasing has surged in Southern California, according to a recent report from the National Renewable Energy Laboratory. It grew from 9% of residential solar installations during the first quarter of 2009 to 36% during the first quarter of 2011 (among projects tracked by the California Solar Initiative database).

Solar leasing is also more popular with low-income households and in neighborhoods with younger families, according to the report. NREL study author Easan Drury says leasing options have attracted new solar customers in different demographics and has shown to be an even bigger draw than cheaper solar panels.

To maintain the growth in distributed solar, Kinman wants to see a lift on the net-metering cap for California utilities. Right now, utilities are only required to sign contracts with residential solar customers for up to 5% of their overall power load. She also supports a robust feed-in-tariff program. “Feed-in-tariffs have been used the world over and a really one of the most trusted policies for driving a solar market. “