Avoids Higher Property Taxes: The main advantage of the policy is that it exempts homeowners from paying extra taxes for solar panels. Also, the solar panel installation increases the value of the property.

• Encourages Renewable Energy Use: The policy motivates homeowners to switch to solar energy and removes the fear of increased taxes due to it. It helps to lower carbon emissions and achieve environmental goals.

• Applies to Various Solar Installations: The policy covers many systems including basic solar panels, water heating systems, space heating or cooling, etc.

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What Systems Does This Policy Includes and Excludes:

Let’s learn about what types of systems this policy includes for tax exclusion:

What It Includes:

Active Solar Energy Systems: The policy includes tax exclusion on systems that collect, store, and distribute solar energy. For example: solar panels, solar water heaters, solar-powered heating and cooling systems.

What It Doesn’t Include:

Passive Solar Energy Systems: It doesn’t include energy systems that naturally use sunlight without any mechanical systems.

Non-Solar Renewable Energy Systems: It also doesn’t include other renewable energy systems like wind turbines, geothermal systems, etc.

Solar Pool Heaters: The policy includes other solar systems except the solar heating swimming pools. They are eligible for taxes. 

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How to Take Advantage of the California New Construction with Solar Panels Property Tax Policy?

If you are also planning to install solar panel systems at your home in California, you can follow these easy steps and take advantage of California’s Active Solar Energy System Exclusion Policy:

1. Check If You are Eligible for Exclusions: Although all types of solar panels qualify for the tax exclusion, make sure you check if you qualify or not. You can confirm it from your solar panel installer.

   Most importantly, just make sure to plan your installation in advance so as to complete it before January 1, 2027. Even if you are halfway there, if your system is not completely installed by this date, you won’t be eligible for the exclusion.

   According to the California Board of Equalization (BOE), only construction that is in progress before 12:01 a.m. on January 1, 2026, can qualify for the exclusion.

2. Obtain Necessary Permits: Firstly, secure all the permits needed for installing solar panels in California from the central and local authorities.

   
   

3. Choose a Good Panel Installer: After securing all permits, choose a good solar company and begin your installation process. You must choose an experienced and professional company. You can learn more about the best solar companies in California here.

   
   

4. Notify the County Assessor: Once your installation process is complete, inform your country assessor’s office about the new solar panel system. Usually, this happens automatically when you get a building permit, but we advise you to double-check.

   
   

5. Complete Required Forms (if applicable): If you’re building the home or purchasing a new property with a pre-installed system, you will need to fill out some forms, such as BOE-64-SES, to claim the exclusion. You can check at the tax office for any additional required documentation. Also, make sure to maintain records of all the contracts and permits.

👉Know about the cheapest ways to get home power off the grid. 

Final Thoughts: California New Construction with Solar Panels Property Tax Policy