Does Solar Increase Property Taxes in California?

Adding solar to your home in California does not raise your property taxes. That has been true for decades. It stops being true for new systems on January 1, 2027. California exempts solar from property tax reassessment, and that exemption expires January 1, 2027. Systems finished before then keep it for as long as you own the home. Systems finished after get assessed on the value the panels add. The deadline runs on the completion date, not the contract date, and the bill that would have extended it died in committee in May. If you are weighing solar this year, that date is the most useful thing to know. Here is what changes, who is protected, and the part most people get wrong about the deadline. Why solar has been exempt Under Proposition 13, your home's assessed value stays mostly frozen until you sell or build something new. Add a bedroom, and the county assessor puts a value on that addition and adds it to your bill. Solar has been carved out of that. State law tells assessors not to count an active solar energy system as new construction, so panels have never added anything to a property tax bill. The carve-out has been renewed over and over for decades. The most recent renewal, SB 1340, pushed the expiration from 2025 out to 2027. This time there was no renewal behind it. It expires January 1, 2027. What changes after that date Nothing happens to the panels. What changes is how they are treated on the assessment roll. Starting January 1, 2027, a newly finished solar system counts as new construction like any other improvement. The assessor puts a value on what the system added to your property, and that value goes on your tax bill from then on. Your whole house does not get reassessed. That part tends to get exaggerated. Proposition 13 still protects the assessed value of everything else. Only the value assigned to the new system gets added. Finish before the deadline and you keep the exemption SB 710, signed in October 2025, settled this question. Systems that qualify before January 1, 2027 stay exempt after the sunset, for as long as you own the home. There is no retroactive bill coming. If your system is finished in 2026, the exemption is yours to keep. Does it cover batteries? Yes, when the battery is part of the solar system. The statute's definition of an active solar energy system takes in storage devices and power conditioning equipment, not just the panels on the roof. That matters more in California than it used to. Under current billing rules most quotes here come with storage attached, and a battery is a meaningful share of the system price. A battery added alongside solar before the deadline sits inside the same exemption the panels do. If you are still working out what size battery your house needs, the deadline is one more reason not to leave that decision until December. Storage installed on its own, with no solar, is a different question. Ask your assessor about that one. What about leased systems and PPAs? The exemption follows the equipment, not the ownership. A system you lease or take power from under a PPA has been eligible the same way a purchased system is. After the sunset, who gets assessed on a third-party-owned system depends on how the arrangement is written, and that is genuinely a question for a tax professional rather than a salesperson. If you are weighing a lease against buying and the property tax question matters to you, ask before you sign, not after. A second bill would have extended it, and it died in May AB 2389 would have kept the exemption open for systems installed after 2027, running to 2031. It passed its policy committee unanimously in April. Then it went to the appropriations committee and never came back out, held in May without a floor vote. The authors had already scaled it back trying to save it, cutting the eligible system size from two megawatts down to ten kilowatts. That was not enough. The legislature adjourns at the end of August and nothing has revived it. January 1, 2027 stands. The deadline is completion, not signature This is the part that catches people. The exemption attaches when the system is finished, not when you sign a contract. A system sold in December and installed in February lands on the wrong side of the date. Solar projects in California take longer than most people expect. Permitting, utility interconnection, inspection and crew scheduling all sit between a signed contract and a working system, and the timeline swings widely by city and by installer. So the question to ask is not whether someone can sell you a system in 2026. It is when the system will actually be finished, and what happens if it slips. What happens when you sell the house The exemption is yours while you own the home. It does not transfer to a buyer. In practice this matters less than it sounds. A sale triggers a full reassessment to market value anyway, which is how Proposition 13 has always worked. The solar simply becomes part of what the home is worth, the way a renovated kitchen does. What it would cost you is not knowable yet Be skeptical of anyone who quotes you a number. The assessment is based on the value an assessor decides the system added to your property, which is not the same as what you paid for it. Assessment practice for residential solar after the sunset has not been established, because the sunset has not happened. Rates vary by county too, since local voter-approved measures sit on top of the Proposition 13 base rate. The direction is the part you can rely on. For systems finished in 2027 and later, there is a recurring cost that does not exist today. Talk to a tax professional about your own situation before building a decision around any specific figure. What this means if you are shopping right now This is the second incentive to come off the table in about a year. The federal tax credit for purchased residential systems expired at the end of 2025. None of that makes solar a bad decision. It makes it a different calculation than the one your neighbor ran in 2023, and it makes install timing matter in a way it never used to. If you are collecting quotes this year, ask for a realistic completion date and get it in writing. That one question is worth more to you than shaving a few cents off the price per watt. Compare quotes from installers in your area and you can see each one's average days from contract to install before you decide.