Do Solar Panels increase Property Taxes?

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.

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.

See also  Private Money Lenders for Residential Real Estate

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
See also  What to do if my lease is up and I have nowhere to go?
Edymar

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.

Scroll to Top