Considering the advantages of purchasing residential solar, but worried about the impact on your property taxes? Navigating changes to your home’s property taxes can feel akin to navigating a mine field, with any number of traps waiting just out of sight—but fortunately, residential solar isn’t as hazardous as some improvements. And generally, you won’t find yourself facing higher property taxes at all.
Property Taxes and Solar
In most areas, the value a home gains by adding solar installations are either ignored when calculating property taxes due to exclusion clauses, or counterbalanced by special tax credits. The US Department of Energy hopes to see normal energy consumption cut by 70% in the next five years, thanks to solar and other alternative energy sources, and the majority of regional and local governments are working with the federal government to make that a reality.
In 38 states there are tax exemptions for renewable energy, which exclude solar systems from local property taxes if used to generate on-site electricity, heating, cooling, etc. Some wholly exclude such systems from all local property taxes, while others offer large abatements for an extended period.
There are also 29 states which offer sales tax exemptions for the purchase of solar energy systems, further reducing the cost of this tax-friendly, energy-efficient home improvement.
In short, interactions with property taxes in the majority of localities are beneficial to homeowners; your energy bills will come down by a significant amount, the value of your home will go up, and if your property taxes do go up, the amount will be relatively low.
Familiarize yourself with the specifics of the laws that apply to you, since some tax exemptions come with strings attached, such as mandatory output capacity or efficiency ratings. The way you receive your credit or exemption may vary as well, making it doubly important to know in advance how and when to expect to spend or receive money.
Educating yourself will help you avoid pitfalls and make sure that your money is well spent, your taxes kept as low as possible, and the value of your home increased without any strings attached.
To learn more about residential solar incentives, including property tax exclusion, you can check out the Database of State Incentives for Renewables & Efficiency.
Few opportunities exist to improve your home in such a clear-cut, effective way without an according increase in tax burden. Taking advantage of current renewable energy incentives to improve your home is simple. It is common sense for any homeowner in a position to invest in their property. While not every state offers the same degree of benefit, the vast majority offer enough to make residential solar a winner in every sense.