California Revenue and Taxation Code § 73 permanently excludes the added assessed value of a solar energy system from your property tax calculation. This is a permanent exclusion — not time-limited like some other states' exemptions.
How Rev. & Tax. § 73 works:
- When a solar system is installed, the assessor does not increase your home's assessed value to account for the solar installation's contribution
- In CA's high-value markets (Bay Area, LA, San Diego), a $35,000 solar system might add $25,000 in appraised value — at CA's average effective property tax rate of ~0.75%, this would otherwise add ~$188/year to your tax bill, indefinitely
- In Marin County ($1.1% effective rate) or San Mateo County, the annual savings are proportionally higher
- The exclusion is permanent — it continues for the life of the system with no 15-year or 20-year cutoff
- No separate application is required in most CA counties — the exclusion is applied automatically when the permit is issued for the solar installation
In California's Proposition 13 environment, where assessed values are typically well below market value, the property tax exclusion is meaningful but secondary to the federal 30% ITC as an incentive. Combined with the ITC and SGIP, the CA incentive package is strong despite the absence of a state income tax credit.