Insights

California's Solar Property Tax Exclusion is Going Away – Make Sure You’re Prepared!

Toni Lewis 13 Dec 2024

An overview by Leo Berwick, Taxand Global Member, USA

California’s Solar Property Tax Exclusion will end for new active solar projects completed after 1 January 2027. To qualify, systems must not only be constructed but also operational and connected to the grid via California Independent System Operator (CAISO) by the end of 2026. Developers should act quickly to secure tax savings, which have historically reduced project tax assessments by up to 95%.

Toni Lewis, Brian Heard and Kourtney Schott from Leo Berwick, Taxand Global Member, USA have highlighted a number of key points to consider, including:

• Only solar systems completed and operational by the deadline will qualify.
• Construction progress after 1 January 2026 does not count unless fully completed before 2027.
• Energy storage systems and ancillary property may qualify, but rules vary by county.
• Changes in ownership of the project entity could trigger loss of the exemption.

For more detailed guidance read the full article here.

Article tags

Energy Tax | Real Estate Tax | USA