Active Solar Energy System Exclusion
Description
The property tax incentive for the installation of an active solar energy system is in the form of a new construction exclusion. It is not an exemption. Therefore, the installation of a qualifying solar energy system will not result in either an increase or a decrease in the assessment of the existing property.
Generally, when something of value is physically added to real property, the addition is assessed at current market value and this value is added to the existing base year value of the real property. When an active solar energy system is installed, it is not assessed, meaning that the existing assessment will not increase.
Some active solar energy properties may be eligible for exclusion from reassessment.
Effective September 18, 2022, the sunset date for the active solar energy system new construction exclusion was extended through 2025-26 fiscal year. The statute is now scheduled to sunset on January 1, 2027.
Active Solar Energy Systems
An active solar energy system is a system that uses solar devices, which 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.
An active solar energy system may be used for any of the following:
- Domestic, recreational, therapeutic, or service water heating
- Space conditioning
- Production of electricity
- Process heat
- Solar mechanical energy
An active solar energy system does not include:
- solar swimming pool heaters
- hot tub heaters
- passive energy systems
- wind energy systems