My particular case seems especially odd to me.
I use a lot of electricity. I have a big house to cool, a large pool to filter, and an electric car. I know I'm an evil person for wanting the big house and pool, but I do, so there you go. My roof that faces South has on it a 5.4kW solar system and an equally large solar thermal system for heating my pool. Despite the reasonably large sized solar system, I still purchase a lot of electricity from PG&E, so I pay a marginal rate of $0.35/kWh. With subsidies, photovoltaics facing North can pay for themselves at an electric cost of $0.20/kWh. In the meantime, folks that have a modest house without a pool pay PG&E a marginal rate of $0.10/kWh and not even South facing panels are financially sensible.
So PG&E and various governments make it financially sound for me to install an 8kW solar system that faces North while others that have good South facing roofs would be financially worse off to install solar.
I agree that governments should financially discourage pollution (including CO2), but the way that they've done it in San Jose seems strange to me.