Solar Guide

California’s Active Solar Energy System Property Tax Exclusion prevents your property taxes from increasing when you install a qualifying solar energy system on your home. This state incentive works as a “new construction exclusion,” meaning that while your solar system adds value to your property, that added value won’t be assessed for property tax purposes. Your existing property tax assessment stays the same, saving you money every year for as long as you own your home.

The financial benefit varies based on your system’s value and local tax rates, but it can result in significant annual savings. For example, if you install a $30,000 solar system in an area with a 1.2% property tax rate, you could save approximately $360 per year in property taxes. The exclusion applies to active solar energy systems used for electricity production, water heating, space conditioning, or process heat, but excludes solar pool heaters and hot tub heaters.

Most homeowners don’t need to file any paperwork – the exclusion is automatically applied when your county assessor receives your building permit. However, if you’re the first buyer of a newly constructed home with solar installed by the builder (completed after January 1, 2008), you may need to file form BOE-64-SES to claim the exclusion. The program is currently set to expire on January 1, 2027, so systems must be installed before this sunset date to qualify.

The Disadvantaged Communities Single-Family Affordable Solar Homes (DAC-SASH) Program is a California state initiative designed to make solar energy more accessible to low-income homeowners in disadvantaged communities. This program provides upfront cash incentives to help offset the cost of installing a solar energy system, making clean energy more affordable for families who might otherwise struggle to afford it.

The program offers up to $3 per watt in fixed, capacity-based incentives. For example, if you install a 5-kilowatt solar system, you could receive up to $15,000 in upfront incentives to reduce your installation costs. To qualify, you must own and live in your home, receive electricity service from PG&E, SCE, or SDG&E, be enrolled in (or eligible for) the CARE or FERA income-qualified utility programs, and live in a designated disadvantaged community area.

If you think you might qualify for this program, you can visit the GRID Alternatives website to learn more about eligibility requirements and how to apply. This incentive works alongside other solar benefits like the federal tax credit to make solar energy even more affordable for qualifying homeowners.

The Equity Fund is a California state program that provides battery storage rebates specifically for low-income households and disadvantaged communities. Created in 2022 through Assembly Bill 209, this $630 million program addresses the concern that previous solar incentives mainly benefited higher-income families by focusing support on those who need it most.

Eligible homeowners can receive rebates of $150, $850, or $1,000 per kilowatt-hour of battery storage capacity installed. The higher rebate amounts ($850-$1,000 per kWh) are available for customers enrolled in CARE or FERA utility assistance programs, those living in disadvantaged communities (DAC-SASH areas), California tribal communities, fire-affected areas, high fire-risk zones, or areas with frequent power outages. To qualify, you must be enrolled in California’s CARE/FERA program, live in a designated disadvantaged community, or be part of a California tribal community. Additionally, participants in these programs receive enhanced net billing credits under California’s NEM 3.0 program and can save approximately 18-35% on their electric bills through CARE/FERA discounts.

Net Billing in California is the current compensation system for solar customers who export excess electricity to the grid. Under this program, homeowners receive credits for the solar energy they don’t use, which flows back to the utility grid. The credit amount varies by utility company and time of day, with rates typically ranging from around 3-7 cents per kilowatt-hour (kWh) for most major utilities.

The financial benefit depends on your utility provider. For example, Sacramento Municipal Utility District (SMUD) pays 7.4 cents per kWh for exported energy, while Imperial Irrigation District pays about 7 cents per kWh. The three major investor-owned utilities (PG&E, SCE, and SDG&E) use an hourly export credit system called ‘NEM 3’ that began April 15, 2023, where credit values change each hour based on grid demand. Los Angeles Department of Water & Power offers traditional 1:1 net metering, which is more favorable than net billing.

Most new solar installations in California automatically qualify for Net Billing, though customers who submitted complete applications before April 14, 2023 may be grandfathered under the more generous NEM 2.0 system. Important considerations include that excess credits are typically settled monthly or annually at lower rates (3-5 cents per kWh), and modifying your system size could affect your grandfathered status. The specific terms and credit settlement periods vary by utility, so it’s important to understand your local utility’s particular Net Billing structure.