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 isn’t a tax credit or rebate – instead, it’s a “new construction exclusion” that keeps your property assessment from going up due to the added value of your solar installation. Normally, when you add something valuable to your property, your assessment increases and you pay higher property taxes. With this exclusion, the solar system’s value is simply not counted toward your property assessment.

The exclusion applies automatically when you install an active solar energy system for electricity production, water heating, space conditioning, or other qualifying uses on existing property. You don’t need to file any paperwork – the exclusion is granted automatically when your county assessor receives your building permit. The program is currently extended through the 2025-26 fiscal year and is scheduled to sunset on January 1, 2027. Note that solar pool heaters, hot tub heaters, and passive solar systems don’t qualify for this exclusion. If you purchase a newly built home with solar already installed, you may need to file form BOE-64-SES to claim the exclusion as the initial purchaser.

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 fact 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, California tribal areas, fire-prone regions, or areas with 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 value of the electricity you produce, rather than a simple 1:1 credit. The credit rates change hourly and are calculated using each utility’s Avoided Cost Calculator, which reflects the actual value your solar energy provides to the grid at different times.

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 typically range 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 6.98 cents per kWh with monthly settlement. LADWP maintains traditional 1:1 net metering as a municipal utility.

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. For new Net Billing customers, excess credits are typically settled annually during your anniversary month, though you can request to change this timing by contacting your utility directly.