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 whether you own or lease your solar system, and there are no residency requirements – the benefit is available to all California property owners who install qualifying solar energy systems.

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 might qualify, you can visit the GRID Alternatives website to learn more about the application process and check if your area is eligible.

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.

Eligibility depends on your utility company and when you submitted your interconnection application. If you submitted a complete application before April 15, 2023, you may be grandfathered under the more favorable NEM 2.0 system, but any system size increases or decreases of more than 20% will move you to NEM 3. New applications after April 15, 2023, automatically fall under the Net Billing system.

Important considerations include understanding that export credits are generally much lower than your retail electricity rate, making battery storage more attractive for maximizing solar savings. Each utility has different settlement periods – some monthly, others annually – and excess credits are typically paid out at lower avoided cost rates rather than carried forward indefinitely.