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 save homeowners hundreds to thousands of dollars annually. 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 solar systems used for electricity production, water heating, space conditioning, and other qualifying purposes, 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 (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. There are no residency requirements, and the exclusion applies whether you own or lease your solar system.

The Disadvantaged Communities Single-Family Affordable Solar Homes (DAC-SASH) Program is a California state initiative designed to make solar energy more accessible to homeowners in underserved communities. This program provides upfront cash incentives to help offset the cost of installing a solar energy system, making clean energy more affordable for qualifying households.

Eligible homeowners can receive up to $3 per watt in fixed, capacity-based incentives. For example, if you install a 6-kilowatt solar system, you could receive up to $18,000 in upfront incentives to reduce your installation costs.

To qualify for DAC-SASH, you must own and live in your home, receive electricity service from PG&E, SCE, or SDG&E, and be enrolled in or eligible for the CARE or FERA income-qualified utility programs. Additionally, your property must be located in a designated disadvantaged community area. If you think you might qualify, you can visit the GRID Alternatives website to learn more about the application process and check if your area is eligible.

The Equity Fund is a California state program that provides battery storage rebates specifically for low-income households and disadvantaged communities. Created in 2022 with $630 million in funding under Assembly Bill 209, this program addresses the fact 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 they install. 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, California tribal 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 reside in a California tribal area. Additionally, customers in these qualifying groups 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 enrollment.

Net Billing in California is the current system that determines how much credit you receive for excess solar energy your system sends back to the electric grid. Unlike the previous net metering system, Net Billing provides export credits based on the time-of-day value of the electricity you produce, rather than a simple 1:1 credit. This means the credit you receive varies throughout the day based on when the grid needs power most.

The financial benefits depend on your utility company and when your solar system exports energy. For the three major investor-owned utilities (PG&E, SCE, and SDGE), Net Billing ‘NEM 3’ began April 15, 2023, and uses hourly export rates that change based on grid demand. Municipal utilities like LADWP still offer 1:1 net metering, while SMUD provides a fixed export rate of 7.4 cents per kWh. At the end of each year, any remaining credits are paid out at roughly 3-5 cents per kWh for most utilities.

If you submitted a complete solar interconnection application before April 15, 2023, you may be grandfathered under the more favorable NEM 2.0 rules. However, you cannot increase your system size or decrease it by more than 20% without losing this grandfathering status. New solar customers will automatically be placed on the current Net Billing system, which emphasizes the importance of pairing solar with battery storage to maximize savings by using your solar energy when it’s most valuable.