At a glance

In California, solar isn't added to your property's assessed value. The Board of Equalization calls it a new construction exclusion, not an exemption: your assessment doesn't go up because of the system, and it doesn't go down either. It applies to systems you own and systems you lease, and for a system added to a home you already own there's nothing to file.

What the exclusion keeps off your bill1% base rate, if a system added value equal to its price
Median solar-only system, $18,989$190/yr
Median solar and battery, $37,559$376/yr
Your assessment from solar$0

Prices: California DG Stats, host-owned systems approved January to August 2026. Local voter-approved rates add to the 1%. Rates: BOE Publication 29.

The deadline is the part to watch. Section 73 stays in effect only until January 1, 2027. If your installation is starting now, it has to be finished before then.

How the exclusion works

Under Proposition 13, your home is reassessed at market value only when it changes ownership or when new construction is finished; otherwise its value can rise by no more than 2% a year. When you add something of value, like a room or a pool, the assessor adds its market value to your base. Solar is the exception: Revenue and Taxation Code section 73 says building or adding a solar system isn't "newly constructed," so it isn't assessed and your existing assessment stays where it was.

Voters gave the Legislature the power to do this with Proposition 7 in 1980. The exclusion has been in effect since the 1981 fiscal year, except from 1995 to 1999, and the Legislature has extended its end date many times. The current law sets it at January 1, 2027.

The deadline: finished by December 31, 2026

Because new construction is assessed when it's finished, and work in progress only on January 1 each year, the Board of Equalization reads the end date this way: work in place on January 1, 2026 is excluded, and anything added during 2026 is excluded only if the system is finished before January 1, 2027.

So a system that's done on December 30, 2026 is excluded for as long as you own the home, and the same system finished a week later isn't, unless the Legislature extends the law. If you're signing now, get the finish date in writing and leave room for the permit.

What the exclusion covers

Section 73 covers an "active solar energy system": one that collects, stores or distributes solar energy to make electricity, heat water, heat or cool the home, or for process heat. For a system that makes electricity, the law counts storage devices, power conditioning equipment and transfer equipment as part of it, up to the point where the electricity is used.

Covered

  • Solar panels that make electricity, on an existing home or built into a new one
  • A battery and the inverters and wiring that are part of the solar system
  • Solar water heating for the home
  • A leased system as well as one you own

Not covered

  • Solar pool heaters and hot tub heaters
  • Passive solar design and wind turbines
  • Backup equipment that runs on another energy source, such as a furnace or water heater
  • Systems finished after December 31, 2026, unless the law is extended

The BOE says a leased system is excluded too: ownership isn't a condition, and a leasing company shouldn't report your system as its business property.

Do you need to file anything?

Not if you're adding solar to a home you already own. The BOE says there's no form or filing; the assessor usually learns about the system from the building permit and should leave it out automatically. If you think you've been assessed for it, contact your county assessor.

Buying a new home that came with solar

When a builder puts solar on a new home it doesn't plan to live in, the exclusion can pass to the first buyer. That buyer files form BOE-64-SES, the Initial Purchaser Claim for Solar Energy System New Construction Exclusion, which comes from the county assessor. The assessor then lowers the home's new base value by the value of the solar system, minus any rebates or tax credits, and the builder is the one who can tell you those numbers.

It only works if the builder hadn't already been assessed for the finished home on a January 1 lien date. In the BOE's example, a home finished on November 15 and sold by December 31 qualifies; sold on January 2, it doesn't. From January 1, 2027, the law treats a claim as on time if it's filed within three years of the purchase.

Pale brick homes with black solar panels on their steep roofs, behind a tall evergreen tree and garden shrubs on a sunny afternoon

When the home is sold

The exclusion lasts until the property changes ownership. At a sale, the home is reassessed at its market value, so the buyer's assessment includes whatever the solar system adds. If you're buying a home with solar, that's part of the price you'll be taxed on.

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Common questions

Does solar raise property taxes in California?

No, for systems that qualify. Revenue and Taxation Code section 73 excludes a solar system from new construction, so adding one doesn't raise your assessed value. The exclusion lasts until the home changes ownership.

When does California's solar property tax exclusion end?

Section 73 stays in effect only until January 1, 2027. The Board of Equalization says work added during 2026 is excluded only if the system is finished before January 1, 2027. Systems that qualify by then stay excluded until a change in ownership.

Do I need to file a form for the solar property tax exclusion?

Not for a system added to a home you already own. The BOE says no form or filing is required; the assessor usually learns of the system from the building permit. The first buyer of a new home with builder-installed solar files form BOE-64-SES with the county assessor.

Does the solar property tax exclusion cover batteries?

Yes, as part of a solar electric system. Section 73 says a system that makes electricity includes storage devices, power conditioning equipment and transfer equipment.

Are leased solar panels excluded from property tax in California?

Yes. The Board of Equalization says the system is excluded whether it's leased or owned.

Property tax rules are set by state law and applied by your county assessor; this is a plain-English summary, not tax advice. Sources: Revenue and Taxation Code 73 · BOE Letter to Assessors 2024/031 · BOE: Active Solar Energy System Exclusion · BOE: exclusion FAQs · BOE: forms · BOE Publication 29 · California DG Stats. Reviewed October 2026.

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