Renewable Energy Systems Exemption

July 06, 2010

Summary

Note: This incentive will be replaced by a new property tax incentive for renewable energy on July 1, 2010. This statute exempts from local property taxes renewable energy systems on residential and commercial property. For residential systems, the exemption applies to the entire assessed value of the system and may be transferred when the property is sold, provided the new owner is the first occupant of the structure (e.g., builder installs a renewable energy system on a newly constructed home). For residential systems, the minimum value of the credit is the actual installed cost of the system. For commercial systems, the credit is 50% of the installed cost of the system; it may not be transferred when the property is sold. The exemption may be applied for three continuous years. After three years, the property owner may claim a portion of the exemption for three subsequent years according to the following schedule:

• Year 1: 75% of the exemption
• Year 2: 50% of the exemption
• Year 3: 25% of the exemption

The property tax exemption is adjusted to include any federal renewable energy income tax credit available at the time the owner applies for the exemption. This exemption is not allowed for systems that produce energy for resale. (Separate property tax laws cover commercial wind facilities.) For additional information or to apply for the exemption, contact the Director of Equalization for your county.