Sacramento, CA

California’s Active Solar Energy System Property Tax Exclusion protects homeowners from property tax increases when they install solar panels or other qualifying solar energy systems. This state incentive works as a “new construction exclusion,” meaning that when you add solar to your existing home, your property taxes won’t go up even though you’ve added valuable equipment to your property. Normally, home improvements increase your property’s assessed value and raise your taxes, but solar installations are specifically excluded from this rule.

The financial benefit varies by home and system size, but can save homeowners hundreds to thousands of dollars annually in avoided property tax increases. For example, if you install a $30,000 solar system and your local property tax rate is 1.2%, this exclusion saves you $360 per year in property taxes that you would otherwise pay. 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 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 extended through the 2025-26 fiscal year and is scheduled to sunset on January 1, 2027, so systems must be installed before this deadline 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 families.

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, Southern California Edison, or San Diego Gas & Electric, 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 confirm your eligibility.

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 cash rebates for battery storage systems to help families who have historically been left out of solar incentive programs.

The program offers rebates of $150, $850, or $1,000 per kilowatt-hour of battery capacity installed, depending on your specific situation. Higher rebate amounts are available for customers enrolled in California’s CARE or FERA utility assistance programs, residents of disadvantaged communities, tribal areas, or areas with high fire risk or 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. The program is administered through the Self-Generation Incentive Program (SGIP) and works alongside California’s net billing program to provide additional benefits for qualifying households. This incentive helps reduce the upfront cost of adding battery storage to your solar system, making clean energy more affordable 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. With 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-up periods. 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, which is more favorable to customers.

Important considerations include timing and grandfathering rules. If you submitted a complete interconnection application before April 14, 2023, you may qualify for the more generous NEM 2.0 program. However, any system size increases or decreases of more than 20% will move you to the less favorable NEM 3.0 program. Most utilities settle excess credits annually during your anniversary month, though some like Imperial Irrigation District settle monthly without rollover options.