Senate Passes Sen. Blakespear’s Legislation to Extend Solar Tax Exemption
SB 710 eliminates the 2027 expiration date for a rooftop solar panel property tax exclusion
SACRAMENTO – The Senate on Wednesday passed legislation by Sen. Catherine Blakespear, D-Encinitas, to extend one of California’s most valuable incentives to acquire solar energy and battery storage – an exclusion to them being assessed as part of property taxes.
SB 710 eliminates the 2027 sunset date for the program, helping to keep solar installation accessible to Californians, move the state toward alternative energy and maintain progress in meeting the state’s clean energy goals. If the exclusion were allowed to expire, it would trigger costly reassessments whenever a new system is installed or a property with an existing system is sold.
In most cases, when homeowners improve their properties through a remodel, their homes are reassessed and therefore property taxes increase to reflect the higher home value. For the past quarter century, the state of California has signaled through its tax policy that it wants to incentivize solar panel and battery installation by excluding them from triggering this reassessment.
“Now more than ever, as we move toward renewable energy, it is important for California to encourage solar and battery storage installation,” Sen. Blakespear said. “Maintaining a tax exclusion for solar panels and batteries is one essential component in helping California meet its clean energy goals.”
California has set goals to generate 60 percent of its electricity from renewable resources by 2030 and 100 percent by 2045. According to the most recent data, about 45 percent of the state’s electric currently comes from renewable sources.
At the end of 2023, solar provided about 28 percent of the state’s electricity generation. In the 25 years the exclusion has been in effect, solar panels have been added to more than 2 million roofs throughout California.
Installing solar panels can be expensive, running from about $10,000 to more than $20,000, depending on the size of the system. Tax incentives and rebates help lower the cost, but the high initial investment means it takes many years for consumers to realize enough savings from energy costs to cover the cost of installation. Excluding solar panels from increasing property taxes helps consumers more quickly cover the cost of solar installation.
SB 710 balances the need to continue encouraging solar adoption and batteries with the need of local governments for property tax revenue. Thus, the bill does not continue the current tax exclusion for utility-scale solar farms and requires the solar energy from non-residential systems to be consumed on-site in order to qualify.
The legislation, which passed on a bipartisan 39-0 vote, goes next to the Assembly for consideration.
SB 710 is sponsored by Environment California and supported by more than 20 different organizations, including Climate Action California, the California Center for Sustainable Energy and San Diego Community Power.
Sen. Blakespear represents Senate District 38. Her constituents live in northern San Diego County and southern Orange County. To learn more about the district and Sen. Blakespear, visit her Senate website.