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One assumption is that the panels have a good south-facing orientation, which won't be the case when they are mandatory. The second consideration is that everyone gets 15 cents for the solar power because of net metering, even if the power is not needed by the grid. That can't continue if everyone produces power because backup power will become too expensive.

The devil is always in the details.

In California, on average, a 1 kW panel will produce 4.5 kWh of energy per day. Assuming an installed cost of $1 per Watt, and being paid 15 cents per kWh, solar panels will pay for themselves in 1000/(4.5*0.15) = 1481 days or a little over 4 years.

This is the type of calculation that my “off the grid” friends have found is not accurate... at least up here in the great northwest... typically by a factor of 3 or more. And “off the grid” folks are not able to get $.15 per kwh. They can only keep their storage batteries topped off. Any additional power generated is just dumped (wasted).

I had a life lesson in this when I was young. I worked for 8 years lumber remanufacturing mill owned by my family. A machine would be procured that would make $.o3 per lineal foot and run at 100 feet per minute. So the calculation would be made $.03 x 100fpm x 8hrs x 60min = $1440 per day. Unfortunately, even if enough work was found to keep the machine running all the time... with labor costs, all the support machinery required, the lease payment, and the fact that it was lucky if during an 8 hour day you were lucky to get even a third of the projected output things never worked any where near what was initially calculated.

The NW is different. As you pointed out, solar doesn't work well west of the Cascades. The other problem in the NW is the cheap hydro makes solar uneconomical. The additional power may well be dumped as you say. Usually the power company pays for extra wholesale power to take care of spikes, but dumps some of that (maybe 4 cents per kWh). But they may be required to purchase people's solar at 15 cents and then dump it.

Your machine example is pretty good. The machine can be turned off without any consequences. Solar is like that, it can be open circuit and won't burn up or anything like that. But it may be (and I don't know the facts) that the power companies are required to buy the solar power and then dump any extra that they have if they cannot throttle their wholesale suppliers. So then you have the case where you have a captive market for your lumber machine but they can't use the lumber so they put in a pile and burn it. That's not sustainable even if it works out for you in the short run.