San Jose, CA

California’s Property Tax Exemption for solar energy systems protects homeowners from property tax increases when they install solar panels or other qualifying solar equipment. This state incentive works as a “new construction exclusion,” meaning your property taxes won’t go up even though you’ve added valuable solar equipment to your home. The exclusion applies to active solar energy systems used for electricity production, water heating, space conditioning, or other qualifying purposes.

The financial benefit varies by home but can save thousands of dollars annually in property taxes. Since California property taxes are typically 1-2% of assessed value, and solar systems often add $15,000-$40,000+ in property value, homeowners could save $150-$800+ per year in avoided tax increases. The exclusion applies automatically when you install solar on an existing home – no paperwork required. However, if you buy a newly constructed home with solar already installed, you may need to file form BOE-64-SES to claim the benefit.

Important to know: The current program runs through the 2025-26 fiscal year and is scheduled to end January 1, 2027. Swimming pool solar heaters and hot tub heaters don’t qualify for this exclusion. The benefit applies whether you own or lease your solar system, and there are no residency requirements for out-of-state property owners.

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 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 check 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, established under Assembly Bill 209 in 2022, provides cash rebates for battery storage systems to help offset the upfront costs of clean energy installations.

The program offers rebates ranging from $150 to $1,000 per kilowatt-hour of battery capacity, depending on your eligibility level. Higher rebate amounts of $850-$1,000 per kWh are available for customers enrolled in California’s CARE or FERA utility assistance programs, residents of disadvantaged communities (DAC-SASH areas), California tribal communities, and areas with high fire risk or frequent power outages. Standard rebates start at $150 per kWh for other qualifying participants.

To be eligible, you must be enrolled in California’s CARE/FERA programs, 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 current net billing system (NEM 3.0) to provide additional financial benefits for qualifying households. This incentive specifically targets communities that have historically had less access to clean energy benefits, helping to make solar and battery storage more affordable for those 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. This system provides hourly export credits that change based on the time of day and the grid’s avoided costs – typically much lower than retail electricity rates. At year-end, any remaining credits are paid out at roughly 3-5 cents per kWh. Some utilities like SMUD offer a fixed export rate of 7.4 cents per kWh, while Imperial Irrigation District pays $0.0698 per kWh with monthly settlement.

Important considerations include timing and grandfathering rules. If you submitted a complete solar application before April 14, 2023, you may qualify for the more favorable NEM 2.0 program – but you cannot increase your system size or decrease it by more than 20% without losing this benefit. The export credit values are generally much lower than what you pay for electricity, making battery storage and energy efficiency improvements more valuable than ever for maximizing your solar investment.