Property Tax Exclusion for Solar Energy Systems (California)

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Summary

Last modified on February 12, 2015.

Financial Incentive Program

Place California

Name Property Tax Exclusion for Solar Energy Systems
Incentive Type Property Tax Incentive
Applicable Sector Commercial, Industrial, Residential
Eligible Technologies Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics
Active Incentive Yes

Implementing Sector State/Territory
Energy Category Renewable Energy Incentive Programs
Amount 100% of system value; 75% of system value exemption for dual-use equipment








Expiration Date 2024-12-31






Maximum Incentive Not specified.










Program Administrator California State Board of Equalization
Website http://www.boe.ca.gov/proptaxes/gase.htm
Date added to DSIRE 2001-04-19
Last DSIRE Review 2014-11-06



References DSIREDatabase of State Incentives for Renewables and Efficiency[1]


Summary

Note: The California State Board of Equalization (BOE) approved new guidelines for the Active Solar Energy Systems New Construction Exclusion. The guidelines clarify that the exclusion applies to qualified locally assessed commercial, industrial, and utility-scale systems.


Section 73 of the California Revenue and Taxation Code allows a property tax exclusion for certain types of solar energy systems installed between January 1, 1999, and December 31, 2016. This section was amended by AB 1451 in September 2008 to include the construction of an active solar energy system incorporated by an owner-builder in the initial construction of a new building that the owner-builder does not intend to occupy or use. This only applies if the owner-builder did not already receive an exclusion for the same active solar energy system and only if the initial purchaser purchased the new building prior to that building becoming subject to reassessment to the owner-builder. ABX1-15 of 2011 clarified that systems installed through sale-leaseback arrangements or partnership flip structures can benefit from this exclusion. Click here and here for Letters to Assessors from the State Board of Equalization that further explain the impact of ABX1-15.

Qualifying active solar energy systems are defined as those that "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." These include solar space conditioning systems, solar water heating systems, active solar energy systems, solar process heating systems, photovoltaic (PV) systems, and solar thermal electric systems, and solar mechanical energy. Solar pool heating systems and solar hot-tub-heating systems are not eligible.

Components included under the exclusion include storage devices, power conditioning equipment, transfer equipment, and parts. Pipes and ducts that are used to carry both solar energy and energy derived from other sources qualify for the exemption only to the extent of 75% of their full cash value. Likewise, dual-use equipment for solar-electric systems qualifies for the exclusion only to the extent of 75% of its value.

System owners should contact the applicable county assessor's office for further information. Click here for a listing of County Assessor offices in California, and here for a December 2008 letter to the assessor that further clarifies the terms of the exclusion.


Incentive Contact

Contact Name Tax Specialist / BOE
Department California State Board of Equalization

Address P.O. Box 942879

Place Sacramento, California
Zip/Postal Code 94279-0090
Phone (800) 400-7115



Website http://www.boe.ca.gov
     
     

Authorities (Please contact the if there are any file problems.)

Authority 1: Cal Rev & Tax Code § 73


Expiration Date 2024-12-31

Authority 2: Guidelines for Active Solar Energy Systems New Construction Exclusion

Date Enacted 2012-11-15


















  • Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.[1]

References

  1. 1.0 1.1  "Database of State Incentives for Renewables and Efficiency"