From the moment the solar panels are installed on the property, the property’s value will increase significantly. The fact leads many property owners to think about the increase in real estate tax and the variation it will have at that time.
Photovoltaic installations are the most recommended at present. The aim is that self-consumption becomes the best choice helping to improve the environment and having an effective reduction in the monthly electricity bill.
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Are there increases in property taxes when installing solar energy?
No, solar panels do not represent an increase in property taxes. Certainly, it is a modification that will increase the home’s value because it will become a self-consuming property.
In states such as California, an exemption is offered to residents with this installation type in their homes. To make the installation, you must previously request all the corresponding permits from the state government where you live.
According to the Solar Energy Industries Association, these installations add approximately $15,000 to the home’s value. Depending on the property tax rate maintained on the property, it could add a few dollars to the annual bill.
Filling out some forms and submitting documents are usually necessary to qualify for exemptions. Although it depends on each state and its regulations, in each one, installers usually provide all the details and requirements to homeowners.
Property tax exemptions for solar energy
As we have said, you can opt for different exemptions after installing solar energy in your home. In New York State, they have the mission to promote installing these systems.
Therefore, they have an exemption for 15 years from the date on which the solar panels are installed. All active solar home systems such as cooling, heating, and hot water are incorporated into the benefit.
The purpose of these exemptions is to have a reduction in the starting value of solar energy. As of this writing, 17 states exempt the purchase of panels from sales tax, while five others have no sales tax.
On the other hand, most taxes reduce the tax bills of homeowners with energy systems and will add to the tax base of their homes. In other words, even though the installation adds value to your home, you will not have to pay additional taxes.
What are the exemptions in the different states for the Solar Panels?
Each state that makes up the country has its regulations regarding taxes and exemptions offered to citizens. In this sense, for photovoltaic installations, you can find the following:
|
State |
Property tax exemption |
Sales tax exemption |
| Alabama | No exemption | No exemption |
| Alaska | Local option | No sales tax |
| Arizona | 100% exempt | 100% exempt |
| Arkansas | No exemption | No exemption |
| California | 100% exempt until 1/2/2025 | No exemption |
| Colorado | 100% exempt | 100% exempt |
| Connecticut | 100% exempt | 100% exempt |
| Delaware | No exemption | No state sales tax |
| Florida | 100% exempt | 100% exempt |
| Georgia | No exemption | No exemption |
| Hawái | 100% NHL only | No exemption |
| Idaho | No exemption | No exemption |
| Illinois | Special evaluation | No exemption |
| Indiana | 100% exempt | No exemption |
| Iowa | 100% exempt for five years | 100% exempt |
| Kansas | 100% exempt | No exemption |
| Kentucky | No exemption | No exemption |
| Louisiana | 100% exempt | No exemption |
| Maine | No exemption | No exemption |
| Maryland | 100% exempt | 100% exempt |
| Massachusetts | 100% exempt for 20 years | 100% exempt |
| Michigan | 100% exempt | No exemption |
| Minnesota | 100% exempt | 100% exempt |
| Mississippi | No exemption | No exemption |
| Missouri | 100% exempt | No exemption |
| Montana | 100% exempt for ten years | No state sales tax |
| Nebraska | Exemption for large systems only | No exemption |
| Nevada | No exemption | No exemption |
| NEW HAMPSHIRE | Local option | No state sales tax |
| New Jersey | 100% exempt | 100% exempt |
| New Mexico | 100% exempt | 100% exempt |
| New York | 100% exempt for five years | 100% exempt |
| North Carolina | 80% exempt | No exemption |
| North Dakota | 100% exempt for five years | No exemption |
| Ohio | Local options – Cincinnati and Cleveland | 100% exempt |
| Oklahoma | No exemption | No exemption |
| Oregón | 100% exempt | No state sales tax |
| Pennsylvania | No exemption | No exemption |
| Rhode Island | 100% exempt | 100% exempt |
| South Carolina | No exemption | No exemption |
| South Dakota | Exemption of $50,000 or 70% of the total value of the property | No exemption |
| Tennessee | Fiscal value not greater than 12.5% of the installed cost | 100% exempt |
| Texas | 100% exempt | No exemption |
| Utah | No exemption | Only for systems larger than 2MW |
| Vermont | 100% exempt | 100% exempt |
| Virginia | Local option | No exemption |
| Washington | No exemption | 100% exempt up to 10kW |
| Washington DC | 100% exempt | No exemption |
| West Virginia | No exemption | No exemption |
| Wisconsin | 100% exempt | 100% exempt |
| Wyoming | No exemption | No exemption |
Writer and content creator interested in Entrepreneurship, Marketing, Jobs and landlord issues. I have a bachelor’s degree in Communication from the Andrés Bello Catholic University, VE, and I also studied at Chatham University, USA. In this blog I write and collect information of interest around agreements, property and mortgage.