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Learn about tax savings for solar energy systems

Property tax incentive for the installation of an active solar energy system

New construction exclusion

The property tax incentive for the installation of an active energy system is in the form of a new construction exclusion. This means the installation will not result in an increase or a decrease in the assessment of the existing property. 

Generally, when something of value is physically added to real property, the addition is assessed at current market value. This value is then added to the existing base year value of the real property. When an active solar energy system is installed, it is not assessed. This means that the existing assessment will not increase.

Active solar energy systems

An active solar energy system is a system that uses solar devices, which are thermally isolated from living space or any other area where the energy is used. The system provides for the collection, storage, or distribution of solar energy.

A property owner who adds an active solar energy system to an existing structure does not have to file for the exclusion. The exclusion should be automatically granted when the assessor receives a copy of the building permit. 

The State Board of Equalization provides guidelines for property owners and assessors on the solar energy system exclusion. 

Please note: If a developer installs an active solar energy system while constructing a new building, the initial purchaser of that building may receive the exclusion if: the building was completed on or after January 1, 2008, the developer/builder did not receive the exclusion, and the purchaser files a "Initial Purchaser Claim for Solar Energy System New Construction."