California Solar Rebates and Incentives

California Property Tax Exclusion for Solar Energy Systems

Program Type Property tax exemption
Technologies Solar water heat, solar space heat, solar thermal electric, photovoltaics, solar mechanical energy
Amount 100 percent of the value of the equipment, 75 percent of the value of secondary equipment
Required Documentation Receipt of purchase
Official Web Site http://www.boe.ca.gov/proptaxes/assessors.htm

 

Under the California tax code, the state does not consider solar-energy-generating equipment to add value to a piece of property. What that means is that, if you install such equipment on your property, you won’t get taxed for the value it adds.

Only “active” solar systems can qualify, which the state defines as “solar devices, which are thermally isolated from living space or any other area where the energy is used, to provide for the collection, storage, or distribution of solar energy.” That definition will cover most solar systems, including photovoltaics, hot-water heaters, solar heating and cooling and others. Also covered under the exclusion are related storage devices, power conditioning equipment, transfer equipment, and parts. However, solar pool or hot-tub heaters do not qualify. Auxiliary equipment that makes the system work, like ducts or pipes (also called “dual-use” equipment), can be exempted from property tax at a rate of 75 percent of its value. The exemption applies to both existing properties and new properties, as long as the seller has not already claimed the exemption.

This exemption is valid, under current California tax law, until 2016. To apply, property owners should contact their county assessor. There’s no limit on this exemption—you can add as much solar-power-generating equipment to your property as you want, property tax-free.

 

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