California's Solar Property Tax Exclusion: Section 73, Word for Word
Adding solar to a California home is new construction, and new construction is normally assessed. Since 1999 Revenue and Taxation Code §73 has carved active solar energy systems out of that rule, so a rooftop array, its inverters and its batteries add nothing to the assessment of the home they sit on. The exclusion is often called the “solar property tax exemption”; the statute calls it an exclusion from “newly constructed”. This page quotes the operative text, sets out what is in and out, explains what happens at a sale and for builder-installed systems, and records where the January 1, 2027 sunset stands after the 2025 and 2026 sessions.
Quick answer
A solar system completed before January 1, 2027 is not assessed (§73(a)), batteries included (§73(d)(1)(B)), for as long as you own the home (§73(f)). Nothing to file for a system you add yourself; the buyer of a new home with builder solar files BOE-64-SES. The section applies to lien dates through 2025-26 (§73(g)) and becomes inoperative on January 1, 2027 (§73(i)(1)); systems qualifying before then stay excluded until a change in ownership (§73(i)(2)). No extension has been enacted.
The operative text
The exclusion itself, §73(a):
Pursuant to the authority granted to the Legislature pursuant to paragraph (1) of subdivision (c) of Section 2 of Article XIII A of the California Constitution, the term “newly constructed,” as used in subdivision (a) of Section 2 of Article XIII A of the California Constitution, does not include the construction or addition of any active solar energy system, as defined in subdivision (b).
What an active solar energy system is, §73(b)(1)–(2):
(1) “Active solar energy system” means a system that, upon completion of the construction of a system as part of a new property or the addition of a system to an existing property, 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.
(2) “Active solar energy system” does not include solar swimming pool heaters or hot tub heaters.
What a system that makes electricity includes, §73(d)(1)(B), first three sentences:
An active solar energy system that uses solar energy in the production of electricity includes storage devices, power conditioning equipment, transfer equipment, and parts related to the functioning of those items. In general, the use of solar energy in the production of electricity involves the transformation of sunlight into electricity through the use of devices such as solar cells or other solar collecting equipment. However, an active solar energy system used in the production of electricity includes only equipment used up to, but not including, the stage of conveyance or use of the electricity.
How long it lasts, §73(f), and the sunset, §73(g) and §73(i):
(f) Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.
(g) This section applies to property tax lien dates for the 1999–2000 fiscal year to the 2025–26 fiscal year, inclusive.
(i) (1) Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.
(2) Notwithstanding paragraph (1), active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.
Text as amended by SB 710 (Stats. 2025, Ch. 328), effective January 1, 2026, from the Legislature's bulk data (build of October 18, 2026). The permitted uses in §73(b)(3) are water heating, space conditioning, production of electricity, process heat and solar mechanical energy.
What is in and what is out
| Equipment or situation | Excluded from assessment? | Where it says so |
|---|---|---|
| Rooftop or ground-mount photovoltaic array | Yes | §73(a), (b)(1) |
| Batteries, inverters, transfer and power-conditioning equipment | Yes — "storage devices, power conditioning equipment, transfer equipment" | §73(d)(1)(B) |
| Solar water heating or space heating (thermally isolated collectors) | Yes | §73(b)(1), (b)(3) |
| Solar swimming pool or hot tub heater | No | §73(b)(2) |
| Pipes and ducts shared with gas or electric equipment | 75% of their value | §73(d)(2)–(3) |
| Furnaces and water heaters that run on other fuel | No | §73(d)(3) |
| The electrical wiring and panels past the point of conveyance | No | §73(d)(1)(B) |
| Spare parts owned by the owner or maintenance contractor, made for the system | Yes | §73(d)(1)(B) |
| A system on a home you then sell | Ends at the sale; the buyer's price sets the new base | §73(f) |
| Builder-installed system on a newly built home, bought from the builder | Yes, on the initial purchaser's BOE-64-SES claim | §73(e) |
At a sale, and for builder-installed systems
The exclusion attaches to the owner who built the system, not to the system. When the home changes ownership the whole property, solar included, takes a new base-year value at the purchase price (§73(f), §110.1); the buyer cannot claim §73 for a system that was already there. The one carve-out is §73(e): a builder who installs solar on a home it does not intend to occupy gets no exclusion, so the statute passes it to the initial purchaser. That buyer files BOE-64-SES with the assessor, identifying the system's share of the purchase price and any rebates, and the assessor reduces the new base-year value by the system's value less rebates (§73(e)(1)(A)–(B)). The claim covers only that first purchase (§73(e)(1)(C)); a three-year filing deadline becomes operative on January 1, 2027 (§73(e)(1)(A)(i)–(ii)). The forms page has the current revision of BOE-64-SES.
Where the 2027 sunset stands
| Bill | What it did | Status |
|---|---|---|
| AB 1516 (2025, Stats. 2025, Ch. 72) | Added the three-year filing deadline for initial-purchaser claims, operative January 1, 2027 | Chaptered July 28, 2025; no extension |
| SB 710 (2025, Stats. 2025, Ch. 328) | Made January 1, 2027 the date §73 becomes inoperative rather than repealed; added §73(i)(2) so qualifying systems stay excluded until a change in ownership | Chaptered October 3, 2025; no extension |
| AB 2389 (2026) | Would have extended a narrower exclusion, for customer-sited systems of 10 kilowatts or less and public-entity systems, to lien dates before January 1, 2031 | Held under submission in Assembly Appropriations, May 14, 2026; not enacted |
The Board of Equalization's Letter to Assessors 2024/031 states the operative reading: the §73 exclusion “applies to any active solar energy system new construction in progress or completed before January 1, 2027.” LTA 2026/013 summarises SB 710 as a change that “makes a technical change to the solar exclusion, which will become inoperative, rather than repealed, on January 1, 2027.” As of this review no bill extending the exclusion beyond that date has been enacted; the 2025–26 session's deadline for passing bills was August 31, 2026.
For a system completed on or after January 1, 2027 the ordinary new-construction rule in §70–§71 would apply: the system's value would be added to the assessment on completion, and the house would keep its existing value, as with any other addition.
Frequently Asked Questions
Do solar panels increase property taxes in California?
Not while Revenue and Taxation Code §73 applies. It provides that "newly constructed" does not include "the construction or addition of any active solar energy system", so installing a system adds nothing to your assessment. The section applies to lien dates for the 1999-2000 through 2025-26 fiscal years (§73(g)) and becomes inoperative on January 1, 2027 (§73(i)(1)); a system that qualifies before then stays excluded until the property changes ownership (§73(i)(2)).
Is it an exemption or an exclusion?
An exclusion from new construction. An exemption (like the $7,000 Homeowners' Exemption) subtracts from an assessed value; §73 says the solar system never becomes part of the assessed value in the first place. There is nothing to claim for a system you add to a home you already own: the assessor simply does not assess it. The one claim form, BOE-64-SES, is for the buyer of a new home whose builder installed the system.
Does the exclusion cover batteries?
Yes. §73(d)(1)(B) says a system that produces electricity "includes storage devices, power conditioning equipment, transfer equipment, and parts related to the functioning of those items", up to but not including the stage of conveyance or use of the electricity. Pipes and ducts shared with non-solar equipment are excluded only to 75% of their value (§73(d)(2)–(3)). Solar swimming pool and hot tub heaters are not active solar energy systems (§73(b)(2)).
What happens to the exclusion when I sell the house?
It ends. §73(f) provides that the exclusion "shall remain in effect only until there is a subsequent change in ownership". The buyer's new base-year value is the purchase price, which includes whatever the market pays for the system; the buyer gets no separate solar exclusion for an existing system. The one exception is the initial purchaser of a newly built home with builder-installed solar, who may claim the exclusion under §73(e) using BOE-64-SES.
Is the solar exclusion ending in 2027?
As the law stands, yes. §73(g) applies the section to lien dates through 2025-26 and §73(i)(1) makes it inoperative on January 1, 2027; SB 710 (2025) changed the January 1, 2027 date from a repeal to an inoperative date without extending it. AB 2389 (2026), which would have extended a narrower exclusion for systems of 10 kilowatts or less through 2030, was held in Assembly Appropriations on May 14, 2026 and did not pass. The BOE's reading (LTA 2024/031) is that the exclusion "applies to any active solar energy system new construction in progress or completed before January 1, 2027." Systems qualifying before that date keep the exclusion until a change in ownership (§73(i)(2)).
I bought a new home with solar from the builder. How do I claim the exclusion?
File BOE-64-SES, Initial Purchaser Claim for Solar Energy System New Construction Exclusion, with the county assessor, with documents showing the value of the system in the purchase price and any rebates received (§73(e)(1)(A)). The assessor reduces your new base-year value by the system's value less rebates (§73(e)(1)(B)). The owner-builder must not have already taken the exclusion, and you must have bought before the building was reassessed to the builder. From January 1, 2027 a three-year filing deadline applies (§73(e)(1)(A)(i)).
Learn More
Sources: Revenue and Taxation Code §73 as amended by SB 710 (Stats. 2025, Ch. 328), Legislature's bulk data pubinfo_2025 (build of October 18, 2026), quoted verbatim; bill histories for AB 1516, SB 710 and AB 2389 from the same data; Board of Equalization Letters to Assessors 2024/031 (August 26, 2024) and 2026/013 (February 23, 2026) and form BOE-64-SES REV. 05 (07-25), retrieved October 23, 2026. The form's printed extract still says “repealed” because it predates SB 710; the dates agree. Verify the current text on the Legislature's site before relying on it. Educational information, not legal or tax advice.
Last reviewed: October 2026.