Does installing solar increase my property taxes in California?
No — a qualifying system is excluded from reassessment. But the exclusion has a sunset date tied to completion, and for commercial owners it is often the largest number in the analysis.
Short answer
No. California Revenue & Taxation Code §73 excludes a qualifying active solar energy system from the property-tax reassessment that new construction would normally trigger. As the statute currently reads, the exclusion applies to systems completed before January 1, 2027 — the test is completion, not contract date. The exclusion applies to residential, commercial and multifamily property, and the absolute value is largest on commercial arrays. The legislature has extended this sunset before and may again, but that is not something to plan a project around. Confirm treatment with your tax advisor and county assessor.
On this page
How property tax normally works — and why solar is different
In California, most significant new construction added to a property triggers a reassessment, and the added value becomes newly taxable. Left alone, that would mean installing solar increased your annual property-tax bill for as long as you owned the building — a direct penalty for improving the property’s energy performance.
Revenue & Taxation Code §73 prevents that. A qualifying active solar energy system is excluded from the new-construction reassessment that would otherwise apply.
The deadline
As the statute currently reads, the exclusion applies to active solar energy systems completed before January 1, 2027.
Two things follow. First, this is tied to completion, so a project contracted in time but finished late misses it. Second, for a commercial or multifamily owner the sums involved are usually much larger than the federal conversation people are actually having — a large array adds substantial assessable value, and excluding it protects an annual cost for the life of ownership.
Whether the legislature extends the sunset again is unknown. Planning as though it will is not a strategy.
Why this changes project sequencing
Work backwards from January 1, 2027 for a commercial project and the picture is uncomfortable: design and engineering, structural review, AHJ plan check with corrections, utility interconnection, procurement lead times, construction and commissioning all have to fit inside the window.
For anything of scale, that means the decision has to be made well before the deadline rather than near it. This is the single most common thing we raise with commercial owners who thought they had until 2027.
Not tax or legal advice
Current Energy is a licensed contractor. This page summarises publicly available rules as they stood on August 21, 2026 and is not tax, legal or financial advice. Programs change. Confirm anything that affects a real decision with your CPA or tax counsel.
Sources and further reading
- DMA — California BOE clarifies sunset dates for the solar energy tax exclusion
- California State Board of Equalization
Questions we get asked
Does the exclusion apply to commercial property?
The §73 active solar energy system exclusion applies to qualifying active solar energy systems generally, not only to homes. For commercial and multifamily owners the absolute dollar value is far larger, simply because the systems and the assessments are larger.
What happens if I sell the property?
A sale is a change in ownership and triggers its own reassessment of the property under California rules. The interaction between that reassessment and a previously excluded solar system is a question for your county assessor and your tax counsel — it is not something to take from a contractor’s website.
Is the deadline the contract date or the completion date?
The statute is written around completion of the active solar energy system, not the date you signed. That is the reason we raise it early: a project contracted late in 2026 but completed in 2027 sits on the wrong side of the line even though everything else went correctly.
Could the sunset be extended again?
It has been extended by the California legislature more than once historically, so a further extension is possible. It is not something to plan a project around. We confirm the current position before any client relies on it.
Does this apply to battery storage too?
Treatment of storage under the exclusion depends on how the storage is configured relative to the solar system and on the assessor’s determination. This one genuinely varies — raise it with your tax advisor and your county assessor rather than assuming either way.
Reviewed and updated August 21, 2026
A 2026 completion date is decided in 2026, not in December.
If the property-tax exclusion matters to your project, let us map the schedule backwards from the deadline with you. It takes one conversation to know whether it is still realistic.