California

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, that added value won’t be assessed for property tax purposes, keeping your annual property tax bill the same as before installation.

The financial benefit varies based on your system’s value and local tax rates, but it can save homeowners hundreds to thousands of dollars annually. For example, if you install a $30,000 solar system in an area with a 1.2% property tax rate, you could save approximately $360 per year in property taxes. 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 set to expire on January 1, 2027, so systems must be installed before this sunset date 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 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 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, those living in disadvantaged communities (DAC-SASH areas), California tribal communities, or areas 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. The rebates are paid based on your battery’s storage capacity and work alongside the Self-Generation Incentive Program (SGIP) to make clean energy storage more affordable for qualifying households.

Net Billing in California is the current compensation system for solar customers who export excess electricity to the grid. Under this program, when your solar panels produce more energy than your home uses, that extra power flows to the utility grid and you receive credits on your electric bill. The value of these credits depends on when you export the energy and varies by utility company.

The financial benefits vary significantly by utility. Most major California utilities (PG&E, SCE, and SDG&E) use ‘NEM 3.0’ which provides hourly export credits that change throughout the day based on grid needs – typically ranging from 3-5 cents per kWh during annual true-up periods. SMUD offers a fixed 7.4 cents per kWh for all exports, while Imperial Irrigation District provides 6.98 cents per kWh with monthly settlement. LADWP still offers traditional 1:1 net metering where exports are valued at the same rate you pay for electricity.

For new solar installations, NEM 3.0 began on April 15, 2023 for the three major investor-owned utilities. However, customers who submitted complete interconnection applications by April 14, 2023 may qualify for the more favorable NEM 2.0 program, but cannot increase their system size or decrease it by more than 20% without losing this grandfathered status. Municipal utilities like LADWP and SMUD operate under different rules and timelines.

Important considerations include understanding that export credit values are generally lower than retail electricity rates under NEM 3.0, making battery storage and energy efficiency more valuable. Credits typically reset annually during your ‘true-up’ month, though some utilities allow monthly settlement. The specific credit values and settlement terms depend entirely on which utility serves your area, so it’s essential to understand your local utility’s specific net billing structure.