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 install solar panels, solar water heating systems, or other active solar energy systems on existing homes – no paperwork is required on your part. The assessor typically learns about your installation through the building permit process. However, solar pool heaters and hot tub heaters do not qualify for this exclusion. The program is currently set to expire on January 1, 2027, so systems must be installed before this date to receive the benefit.

If you’re buying a newly constructed home that already has solar panels, you may be eligible for the exclusion as the initial purchaser, but only if the home was completed on or after January 1, 2008, and you file the required claim form (BOE-64-SES) with your county assessor. The exclusion applies regardless of whether you own or lease your solar system, and there are no residency requirements – the benefit is available to all property owners in California.

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 solar panels, 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, be enrolled in or eligible for the CARE or FERA income-qualified utility programs, and live in a designated disadvantaged community area. The program is administered through GRID Alternatives, and interested homeowners should visit their website to check eligibility and apply. This incentive can be combined with federal tax credits and other available programs to further reduce the cost of going solar.

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 criticism 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 (DAC-SASH areas), California tribal areas, or regions with high fire risk or frequent power outages. To qualify, you must be enrolled in California’s CARE/FERA programs, 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 and utility company’s avoided cost calculations, rather than a simple 1:1 credit for energy produced.

The financial benefits vary significantly by utility company and time of export. For the three major investor-owned utilities (PG&E, SCE, and SDGE), the new ‘NEM 3’ system began April 15, 2023, and provides hourly export credits that change based on grid demand – typically ranging from 3-5 cents per kWh during annual true-up periods. Other utilities like SMUD offer a fixed export rate of 7.4 cents per kWh, while Imperial Irrigation District provides $0.0698 per kWh with monthly settlement.

Important timing considerations include the April 14, 2023 deadline – complete interconnection applications submitted by this date may qualify for the more favorable NEM 2.0 grandfathering. However, grandfathered systems cannot increase in size at all or decrease by more than 20% without losing these benefits and moving to NEM 3. Municipal utilities like LADWP are not subject to NEM 3 changes and continue offering more favorable 1:1 net metering with indefinite credit rollover.

Homeowners should understand that Net Billing generally provides lower compensation rates compared to previous net metering programs, making battery storage and energy efficiency improvements more valuable for maximizing solar savings. Each utility has specific Avoided Cost Calculators that determine hourly export values, and customers on NEM 3 can select their annual true-up month by contacting their utility company.