Lancaster, CA

California’s Property Tax Exemption for solar energy systems is a state tax benefit that prevents your property taxes from increasing when you install a qualifying solar system. This incentive works as a “new construction exclusion,” meaning that while your solar panels add value to your home, 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 solar system’s value and local property 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. Most active solar energy systems qualify, including those used for electricity production, water heating, and space conditioning, but solar pool heaters and hot tub heaters are specifically excluded.

The good news is that no application is required for existing homeowners – the exclusion is automatically applied when your county assessor receives your building permit. However, if you’re buying a newly constructed home with solar already installed, you may need to file form BOE-64-SES to claim the benefit. This incentive is currently scheduled 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 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 5-kilowatt solar system, you could receive up to $15,000 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 Pacific Gas & Electric (PG&E), Southern California Edison (SCE), or San Diego Gas & Electric (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 for this program, you can visit the GRID Alternatives website to learn more about the application process and confirm your eligibility. This incentive can be combined with other solar benefits like the federal tax credit to further reduce your out-of-pocket costs for going solar.

California’s Equity Fund is a state program designed to make solar energy storage more accessible to low-income households and disadvantaged communities. This $630 million initiative provides rebates for battery storage systems to help families who have historically been left out of solar incentive programs. The fund specifically targets households enrolled in California’s CARE/FERA utility assistance programs, residents of disadvantaged communities, and California tribal communities.

The program offers rebates of $150, $850, or $1,000 per kilowatt-hour of battery capacity installed, with higher rebate amounts available for qualifying low-income customers. Households in disadvantaged communities, tribal areas, high fire-risk zones, or areas prone to power outages can receive the maximum rebate amounts. Additionally, customers enrolled in CARE programs receive approximately 35% off their electric bills, while FERA participants get about 18% off. Under California’s current net billing program (NEM 3.0), eligible customers in these communities also receive enhanced bill credits for excess solar energy they send to the grid, making solar plus storage systems more financially beneficial for families who need it most.

Net Billing in California is the current compensation system for solar customers who send excess electricity back to the grid. Under this program, homeowners receive credits for the solar power they export, but the value of these credits varies significantly depending on your utility company and when the electricity is sent to the grid.

The financial benefits depend on your utility provider. Most major California utilities (PG&E, SCE, and SDG&E) operate under ‘NEM 3.0,’ which began April 15, 2023. Under NEM 3.0, export credits change every hour based on the grid’s avoided costs, typically ranging from 3-5 cents per kWh during annual true-ups. Some utilities offer different rates: Imperial Irrigation District pays $0.0698 per kWh monthly, while Sacramento Municipal Utility District provides 7.4 cents per kWh. Los Angeles Department of Water & Power still offers 1:1 net metering, crediting exports at full retail rates.

Important considerations include timing and grandfathering rules. Solar applications submitted before April 14, 2023, may qualify for the more favorable NEM 2.0 rates, but any system size increases or decreases over 20% will move you to NEM 3.0. Credit settlement varies by utility – some settle monthly while others use annual true-ups. The export credit rates can change over time, with some utilities allowed to adjust rates every four years within certain limits.