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 means that while your solar panels add value to your property, the county assessor cannot raise your property tax assessment to account for that added value. Your property taxes will remain the same as they were before the solar installation.

The exclusion applies automatically when you add solar panels to an existing home – you don’t need to file any paperwork or applications. The assessor typically learns about your solar installation through the building permit process. The exclusion covers active solar energy systems used for electricity production, water heating, or space conditioning, but does not include solar pool heaters or hot tub heaters. This tax benefit is currently available through the 2025-26 fiscal year, with the program scheduled to end on January 1, 2027.

If you’re buying a newly constructed home that already has solar panels installed, you may be eligible for additional savings through the ‘Initial Purchaser Claim’ if the builder didn’t receive the exclusion and the home was completed after January 1, 2008. In this case, you would need to file form BOE-64-SES with your county assessor to potentially reduce your property’s base year value by the solar system’s worth.

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 may qualify, you can visit the GRID Alternatives website to learn more about the application process and verify your eligibility.

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 fund addresses the concern that previous solar incentives primarily 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, residents of disadvantaged communities, California tribal areas, fire-prone regions, 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, 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 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 generate, rather than a simple one-to-one credit. The credit rates change hourly and are calculated using each utility’s Avoided Cost Calculator, which reflects the actual value your solar energy provides to the grid at different times.

The financial benefits vary significantly by utility company and time of export. For the three major investor-owned utilities (PG&E, SCE, and SDGE), Net Billing (called ‘NEM 3’) began on April 15, 2023, and export credits typically range from 3-5 cents per kWh during the annual true-up process. Other utilities offer different rates: Imperial Irrigation District provides $0.0698 per kWh with monthly settlement, while Sacramento Municipal Utility District offers 7.4 cents per kWh. Los Angeles Department of Water & Power still operates under traditional 1:1 net metering as a municipal utility.

Important timing considerations include that applications submitted before April 14, 2023, to PG&E, SCE, or SDGE may qualify for the more favorable NEM 2.0 program, but any system size increases or decreases of more than 20% will move you to Net Billing. Excess credits are typically settled annually during your anniversary month, though some utilities offer monthly settlement. The export credit rates can change over time, with SMUD’s rate potentially adjusting every four years by up to 30%.