Governor Newsom’s Solar Tax Exclusion Bill and Its Aim to Promote Green Energy Across California

On the 19th of September, 2022, reports emerged that California governor — Newsom — had signed the 1340 senate bill. For context, this bill extends tax exclusion to pristine solar installments for periods up to two years.

For more information on this solar program and more, visit our partners here.

The senate bill 1340 is undoubtedly, one of the greatest initiatives issued by the Californian government in recent times. This extension will see unfinished solar projects coming online in due time.

However, just before we dive into this bill’s specifics, it’s important to get an overview of why solar energy has become a top priority in California.

Thus, this article aims to give an insight into solar systems in California and why the 1340 senate bill being signed into law might just be what’s needed to keep sustainable (green) power alive for years to come.


Solar Energy in California

The solar industry in the United States has witnessed a massive boost in the past decade. While the nation had a combined 2.5 gigawatts of solar power in 2010, the numbers skyrocketed, and in 2020, the US had a joint solar strength of 81 gigawatts. This increase, mathematically, is valued at more than “3240%.” Mesmeric!

Nonetheless, just like our fingers, solar energy isn’t evenly distributed amongst US states. For context, California offers over 30% of the United States’ total solar generation. Before other states caught up to the solar energy market, California was already operating at 50% of its overall capacity.

So, why did solar generation become so pronounced in California more than in other US states? Did they receive a prophecy from Nostradamus, or did this journey start from a politician’s gut feeling? To get an answer into California’s solar power reverence, considering their laws and bills relating to solar energy is vital.


Solar Policies and Incentives in California

Abundant sunshine hasn’t been the only reason for California’s success in the solar energy sphere. Rather, it boils down to the incentives and laws passed down by the state’s legislation. Notable mentions include:


#1 Renewable Portfolio Standard (California)

One of the most ambitious plans adopted by US states is the RPS — Renewable Portfolio Standard. The RPS is a thing in 37 states, including the District of Columbia. So, what’s the goal of the RPS? Well, it’s to ensure that all participating regions are 100% carbon-free by 2045.

Electric companies in participating states are bound to this law. Fines are applied to firms that don’t meet monthly or yearly targets. The RPS is quite strong in California, and that’s why the solar energy levels here are incomparable to those in other states. Additionally, California has a metering system that grants you credit for excess power gained from your solar panel.


#2 Single Family Affordable Solar Homes (SASH)

The n was developed for families on low income. Families in this program will get $3 for every watt of solar energy provided. The following are the laid down goals featured in California’s SASH program:


  • Reduce electricity usage through solar installation and lessen monthly energy bills to avoid increased expenses.


  • Guarantee full or partial incentives on the solar systems of families in the program.


  • Offer efficient solar energy to house owners.


  • Curate energy solutions that are financially and environmentally viable.


  • Provide employment and job training to those interested in understanding the inner workings of solar energy.

To qualify for the SASH program, homeowners must have salaries 80% below the average income rate. Also, the properties they reside in must have the “affordable housing” tag. SASH is only available to those who patronize one of these revered electrical companies in California — Pacific Gas & Electric (PG&E), San Diego Gas & Electric (SDG&E), or Southern California Edison (SCE).


Want to Board the Solar Energy Train in California? Consider These Financing Alternatives

California didn’t win the solar energy contest in the United States by adopting conservative measures. The state’s legislation went all out. One area you can see this hunger is through its financing alternatives for individuals interested in solar energy.

Alongside Florida, California has a distinct solar financing program known as Property Assessed Clean Energy (PACE). PACE issues long-term loans to individuals. The timeline for repayment can stretch to 25 years in some cases. It’s vital to note that repayments combine property taxes. The interest rates on PACE loans differ. Nonetheless, you should expect rates hovering around 2.5% to 10%.

Although PACE loans are great, note that they have a major drawback. For context, getting PACE loans places a property lien on a landholding. While liens expire after repayment, it’ll be difficult for the homeowner to sell their home with a lien still active. Thus, PACE loans are only advisable for those who don’t have plans to relocate anytime soon.

Other financing alternatives available for California residents include the PowerSaver Second Mortgage, which comes directly from the US Federal Housing Administration (FHA), and the Home Equity Line of Credit (HELOC). Collecting either of these two loans is recommended by most economists since it gives borrowers more options than PACE loans.


  • These loans have long repayment time frames. While the timeline attached to the PowerSaver Second Mortgage can reach 20 years, HELOC loans could field a repayment period that hovers around 10 to 15 years.


  • The interest rates on these loans are decent. You get values up to 5% on HELOCs and between 4.99% to 5.99% on an FHA-issued PowerSaver Second Mortgage.

Another financing alternative to consider as a Californian looking to get a stake in solar energy is tax financing. You can get up to 26% of tax credit when you’re looking to buy a solar system that’s loan-financed, and funds will become available for debt servicing.

Additionally, electric savings kick-start upon solar installations. Funds saved can be employed to settle the loan. All in all, the solar system will pay for itself, and homeowners don’t have to worry about astronomical costs in the long run.


The Significance of Governor Newsom Signing a Bill That Extends Property Tax Exclusion on Solar Installations for Californians

This article has integrated some of the top-tier initiatives adopted by the California government to ensure that solar energy remains a theme in the state. However, just recently, another initiative — Senate Bill 1340 — signed by Governor Newsom, came to light. This bill is of seismic importance as it extends property tax exclusion on all solar installations made within California.

The Senator that authored the bill — Bob Hertzberg of Van Nuys — had this to say concerning its passage:

Solar power is absolutely essential in meeting increased energy demands statewide,” Hertzberg said. “In recognition of this growing need, California has put in place numerous incentives to promote solar power. Unfortunately, these incentives are set to expire, which would put us at a disadvantage compared to other states. SB 1340 will help avoid sharp solar costs to ratepayers and help ensure more new green energy systems in California.”

Governor Newsom, while giving his signing message, reiterated Senator Bob Hertzberg stance with this statement:

California has established aggressive clean energy goals in its broader plan to combat the impacts of climate change,” Newsom said. “Increasing the number and pace of solar projects brought online is a critical component of this plan.”

The Senate Bill (SB) 1340 is the 3rd Hertzberg bill that centers on climate change. For context, the first two were the following:


  • SB 529 (Permit to Construct Transmissions): It’ll fast-track the approval and review process required for transmission updates and development, meeting short-term and long-term energy needs across California.


  • SB 1174 (Clean Power Infrastructure): This bill is aimed at directing energy companies within California to curate plans for transmissions and hasten approvals in a bid to achieve clean energy across the state. SB 1174 was put forward to tally the Renewable Portfolio Standard (RPS) goal of 100% clean energy by 2045.


About the Bill’s Author — Senator Bob Hertzberg

Bob Hertzberg is a Californian lawmaker born on the 19th of September 1954. He’s a Democrat, and he represents the people of the 18th Senate District, a segment that includes parts of San Fernando Valley.

Elected into the California state senate in 2014, he represented the 40th Assembly District. He was Majority Leader in the legislature from January 2019 to January 2022. After his tenure expired, he decided not to seek re-election as he’d already set his sights on being a candidate of the prestigious Los Angeles County Board of Supervisors.

Over the years, Senator Bob Hertzberg has authored several climate bills, including SB 529 and SB 1174. He’s also responsible for the recently passed SB 1340.


What to Know About Governor Newsom

Gavin Christopher Newsom was born on the 10th of October, 1967. He’s a politician in the United States and ascended to the role of California Governor in 2019. He’s the 40th Governor of the state.

During the COVID-19 pandemic, Governor Newsom came under scrutiny for his personal behavior while in office. The allegations leveled against him led to an attempted recall while he was still in office. Nonetheless, he came out top in the recall election hosted in 2021, and according to him, it was a “Republican effort” to remove him from the helm of affairs.


Chris has been in the marketing industry for well over a decade. Chris loves writing about anything related to saving money. A passion for teaching people through writing has given him a unique opportunity to use his skills in the marketing industry. In his spare time he likes spending time with his family. training his new puppy, and taking long road trips to places like Banff & Lake Louise, Alberta.
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