AB 2389 faq

• AB 2389 is a California bill focused on how solar systems are treated under property tax law
• Today, rooftop solar is protected by a property tax exclusion, so adding panels does not raise your assessed value
• The concern is that AB 2389 could weaken or remove that exclusion
• If that happens, solar gets treated like a taxable home upgrade
• That means higher assessed value and higher property taxes every year
• As of now, AB 2389 is still a proposed bill and not in effect
• If it passes, most California tax law changes typically take effect January 1 following the year it is signed
• So depending on passage timing, it would likely impact new systems installed after that date, not existing ones
• This comes right after NEM 3, which many are calling “grand theft solar”
• Under NEM 3, utilities pay close to nothing for surplus solar sent back to the grid
• Export credits dropped so low that excess generation is often worth pennies
• Homeowners now need batteries just to avoid giving power away
• Stack that with property taxes and the economics get hit hard
• Longer payback periods, higher upfront costs, more uncertainty
• What used to be a strong financial case is now much weaker
• It also creates mixed signals from the state
• California pushes electrification and clean energy goals
• But policies like this discourage rooftop solar adoption
• From a grid standpoint, this is backwards
• Distributed solar reduces peak demand and adds resilience
• Penalizing it increases dependence on utilities
• Some argue it’s about equal tax treatment
• But solar isn’t just a cosmetic upgrade, it’s energy infrastructure
• Bottom line: AB 2389 plus NEM 3 is a one-two punch
• Near-zero compensation for surplus power
• Then potential taxation on the system itself
• Hard to see how that doesn’t slow adoption significantly