Countdown to Sunsetting CA Solar Property Tax Exclusion

For decades, California has allowed solar projects to be exempt from property tax increases, offering a real financial benefit to customers. Unfortunately, that’s about to change. California’s Active Solar Energy Systems Exclusion will officially sunset on January 1, 2027, and missing this window could result in paying thousands more each year.

The sunsetting of the property tax exclusion directly impacts commercial and ag property owners considering solar. The current exclusion allows added solar to be exempt from assessment of increased property value, saving you from skyrocketing taxes. Once this exclusion sunsets, any solar added to your property will be subject to value assessment, possibly leading to tens of thousands in added taxes for larger systems.

What does this mean for you? Here are the important details to know:

• The exclusion sunsets on January 1, 2027 (unless we can fight for an extension). This means your project must be completed on or before December 31, 2026, to qualify.

• After it sunsets, any newly installed solar systems will be value assessed and taxed as property improvements.

• If your project is started before December 31, 2025, but not completed by the end of 2026, only the portion that was completed by the end of 2025 will qualify for the exclusion. The 2026 additions will be subject to assessment.

• If your project is started and finished within 2026, it will be excluded from assessment.

How you act now is crucial to qualifying for the exemption. Locking in your project as soon as possible is key, as permitting, design, and interconnection can take months to complete. As the 2027 deadline approaches, our team is working diligently to complete projects in time, and also fighting for a deadline extension.

Is Extension Possible?

California Senate Bill 710 (SB 710) was proposed early in 2025 and aimed to eliminate the 2027 sunset date and extend the exclusion indefinitely. The bill was progressing through the legislature without opposition, until officials in Kern County raised concerns that stopped the original bill in its tracks. It was then significantly altered to only focus on preventing existing systems that qualified before the January 1, 2027, deadline from being taxed, and unfortunately removed the full extension of the property tax exclusion.

Both the author of the original bill, Senator Catherine Blakespear, and industry representatives plan to advocate again next year for the full extension of the property tax exclusion. We are closely monitoring policy and doing what we can to advocate for legislation that extends the exclusion indefinitely. We urge our customers and community to stay informed, and appeal to any County or State Officials to support an indefinite extension.

What's Next?

At JKB Energy, we will continue working hard to extend this important exclusion. However, until a bill is signed into law, we must assume the sunset will take effect.

If you’re considering solar or battery storage, now’s the time to set your project in motion so it can be completed by December 31, 2026, to qualify. Give us a call at (209) 668-5303 to talk project details, savings, and your brighter future with solar.