Go Solar in Montebello

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Solar In Calif

Solar in California Information

Of all the States in the USA, California is the most Pro Solar and the leader in Going Green with alternative Green Energy, and in particular with photo voltaic solar power. For the home owner things have never been better to Go Solar. The technology and the cost of solar power is one quarter of retail costs of electric power from utility companies, As Long as You Buy, Do Not Lease! (unless you do not pay taxes or are a non-profit). Plus with the 30% Federal Tax Credit, coupled with the tax deductible, self assessed, energy efficiency California property tax program (AB 811) implemented through the Hero Program, financing is available at effective APR’s of 2% to 3% or better, depending on your tax bracket. There has never been a better time in California to Go Solar!

California Solar Initiative (CSI)
In 2007 the California Public Utilities Commission (CPUC) established a solar energy rebate program under the California Solar Initiative (CSI) program. http://docs.cpuc.ca.gov/PUBLISHED/NEWS_RELEASE/76877.htm
In 2006 Gov. Arnold Schwarzenegger signed California Senate Bill 1 (SB 1) into law. http://www.leginfo.ca.gov/pub/05-06/bill/sen/sb_0001-0050/sb_1_bill_20060821_chaptered.pdf
These combined acts allowed for a solar rebate program under the CSI and under SB 1, required electric utility’s to allow Net Metering whereby a homeowner gets refunded back later at equal rates for any excess energy generated during the day, among other Pro Solar acts.
The rebate program is over for most utilities but there are still some rebates available for LA DWP and Pasadena Water &Power customers, who are not controlled under the CPUC, since they are municipally owned utilities.
At the CSI website there is much information on the trends and prices of solar in California.

Solar Rights Act – Home Owners Association (HOA) Homeowners’ Right to Solar
California is a Pro Solar State and everyone has a Right to go solar! An HOA can only limit a solar installation by requiring a maximum of $1,000 in any additional costs. They can not disallow it, and if they do they will automatically lose in court and are required to repay the homeowner all court costs.

The section below is from the GoSolarCalifornia web page: http://www.gosolarcalifornia.ca.gov/solar_basics/rights.php
The Solar Rights Act was created in 1978 (AB 3250, 1978), and it created a legal framework for solar access. The law includes protections to allow consumers access to sunlight (and prevent shading of systems) and to limits the ability of homeowner associations (HOA) and local governments from preventing installation of solar energy systems.

The Solar Rights Act sought to promote and encourage the widespread use of solar energy and to “protect and facilitate adequate access to the sunlight which is necessary to operate solar energy systems.” Even though the law is more than 30 years old, the Solar Rights Act contributes significantly to California’s strong policy commitment to solar energy, and the policy rationale for the Act is relevant today and continues to support California’s solar energy policy initiatives.
• The Solar Rights Act balances the needs of individual solar energy system owners with other property owners by developing solar access rights.
• The Act limits the ability of covenants, conditions, and restrictions, typically enforced by homeowner associations (HOA), and local governments to restrict solar installations. These are perhaps the most well known and important provisions.
• But the Act also creates the legal right to a solar easement and requires local governments to preserve passive cooling and heating opportunities to the extent feasible in new development projects.


Hero Program – Tax Deductible
On July 21, 2008 Gov. Arnold Schwarzenegger signed Assembly Bill 811 into law which allowed for contractual assessments on property owners for energy efficiency improvements. AB 811 authorized all California cities and counties to designate areas within which willing property owners could enter into contractual assessments to finance the installation of distributed renewable energy generation , as well as energy efficiency improvements. https://en.wikipedia.org/wiki/California_Assembly_Bill_811_%282008%29
From this law, the Hero Program, and others, were created. Where the Hero Program has been allowed, property owners can self assess themselves the financing for solar panels and other energy efficiency improvements. Because these assessments are not Ad Valorem, or based on a percentage of the value of the property, whether the principal portion of the assessment was tax deductible was in question. Since this assessment is of a Melo-Roos type of assessment the tax deductibility of the non-interest portion of the assessment was in question, but was resolved to be tax deductible, please continue reading below.

California Prop 13, The People’s Initiative to Limit Property Taxes was passed in 1978 limiting any Ad Valorem property taxes based on a percentage value of the property, to 1% of the value of the property.

Melo-Roos, non Ad Valorem tax assessments – After Prop 13, in 1982, the Community Facilities Act (more commonly known as Mello-Roos) become law which allowed for other, non-Ad Valorem tax assessments to be made on property owners. These Melo-Roos taxes were used to build roads and other municipal needs. Initially these Melo-Roos tax assessments were not considered to be tax deductible, since they were not Ad Valorem, and were considered to increase the equity of a home. Since then, though, the IRS has stated “Assessments on real property owners, based other than on the assessed value of the property, may be deductible if they are levied for the general public welfare by a proper taxing authority at a like rate on owners of all properties in the taxing authority’s jurisdiction, and if the assessments are not for local benefits (unless for maintenance or interest charges).” https://www.irs.gov/pub/irs-wd/12-0018.pdf
Since the Hero Program, as created under AB 811 is based on a statewide need for energy efficiency and is not a local benefit, among other things, it qualifies as being a tax deductible property tax for the IRS. Like always, each individual case is different and you should always consult your tax expert.
On November of 2011 the California Franchise Tax Board conformed to the IRS stance on Real Estate Tax Deductions and allowed the entire property tax bill, not just the Ad Valorem, but all of the Melo-Roos type assessments as well, to be tax deductible.
And so, for tax preparers the common practice now is to deduct the entire property tax bill, with no itemization’s, which includes the Hero Program tax assessment.  Just ask your tax preparer.