California Homeowners Have Until Dec. 31 to Install Solar Without It Raising Their Property Taxes
California Homeowners Have Until Dec. 31 to Install Solar Without It Raising Their Property Taxes
California has offered a valuable but little-known benefit to solar homeowners since 1980: adding a qualifying solar system does not increase your property tax assessment. That benefit is scheduled to end for new installations, and the deadline is coming up fast.
What the solar property tax exclusion does
Normally in California, new construction on a property, such as an addition or major improvement, can be added to the home's assessed value and increase property taxes. The active solar energy system exclusion carves out an exception. When a qualifying solar system is installed, its value is excluded from the property's assessment, so going solar does not raise the homeowner's property tax bill.
According to a notice from Nevada County, a qualifying active solar energy system must be completed before January 1, 2027 to qualify for the current exclusion. That means installation must be finished by December 31, 2026. The timing matters. The notice warns that solar construction still in progress on January 1 will not qualify and will be assessed as new construction. After the exclusion expires, the market value of a newly installed solar system can be added to the property's existing assessment, increasing property taxes. Systems that qualify before the deadline keep their exclusion until there is a change in ownership of the property.
What homeowners should check now
If you are planning to buy a solar system, timing is critical. Design, permitting, installation, and inspection can take weeks or months, so a project started late in the year may not be finished before the deadline. Talk with your installer about realistic completion dates, and check details with your county assessor or the California State Board of Equalization. How the change affects you can also depend on who owns the system. Under third-party ownership, the provider owns the equipment rather than the homeowner, which may change how the system is treated for property tax purposes. Ask your provider how it applies to your home.
The benefits still add up
The property tax deadline is one more reason to act soon, but the core reasons to go solar remain. Rates on SCE, SDG&E, and PG&E have roughly doubled over the past decade, time-of-use pricing makes evening power expensive, and outages remain a concern. Solar paired with battery storage lowers what you buy from the utility, covers expensive evening hours, and keeps essential loads running when the grid goes down. Through third-party ownership programs, qualifying homeowners can get solar and battery storage installed without buying or financing equipment, while enjoying lower energy costs and backup power. The clock is ticking on one of California's longest-running solar benefits. Find out where your home stands.
To find out if your home qualifies for a TPO solar and battery program, visit myhomesolution.org/california_public_utility_commissions
