Will solar raise your property taxes? Property and sales tax exemptions by state

Why published state counts disagree

Search for how many states exempt solar from property tax and you will see numbers that do not match. One trade association page indexed in search results says 36 states offer a property tax exemption for solar. Other pages put the figure in the twenties or low thirties. We could not fetch the trade association page directly this month, so we cite its figure only as what the search index shows, and we do not rely on it. The disagreement itself is easy to explain, and it matters more than any single count.

Four things move the total. First, the definition of exemption. A statute that excludes the added value from assessment, a statute that exempts the equipment itself, and a statute that only caps how the value can be calculated are three different mechanisms, and counters often lump them together. Second, local options. Several states let a county, city or school district choose whether to honor the exemption, so a state can be counted as yes while your town is a no. Third, scope. Many state rules are written for commercial and utility-scale systems, or for solar water heating, and a count that includes them overstates what a homeowner with a rooftop array can claim. Fourth, time. Rules are amended, sunset dates arrive, and an aggregator that copied a table in 2019 is describing a different law.

The practical lesson is to treat any state count as a rough map and read your own statute. The table below separates the mechanisms, and every row carries the source and the date we read it.

Three things people mean by a solar tax exemption

Before the state-by-state table, it helps to separate the mechanisms, because they behave differently on a tax bill.

An exemption for the value the system adds

Under this design, the assessor still values the home, but the part of the value attributable to the solar system is exempt. New York's statute is a clear example: real property with a qualifying system is, in the statute's words, exempt "to the extent of any increase in the value thereof." Only the added value is shielded, not the home's whole assessed value. That is why the same exemption can be worth a few hundred dollars a year on one home and very little on another.

A rule telling assessors to ignore the system

Florida's statute does not use the word exempt at all. It says the just value of a property attributable to a renewable energy source device may not be considered when the property appraiser sets value. The effect for a homeowner is the same, a system that does not raise the assessment, but the legal label matters when you read a notice or file an appeal.

A sales tax exemption

Sales tax is charged once, on the equipment at purchase, so the exemption is a one-time saving instead of an annual one. Several states exempt solar equipment from sales tax even when they tax the home's value in the ordinary way. Because sales tax usually applies only to the materials and not to installation labor, the dollar effect is smaller than most people expect, and the worked example further down puts a number on it.

Property tax rules we could verify, by state

Each row below was read at the statute or at a state tax agency page on October 22, 2026. The mechanism column says whether the rule exempts added value, tells assessors to disregard it, or exempts the equipment. Where a rule has a local option or a term limit, it is in the table, because those details decide whether the benefit reaches your bill.

Seven rows is a short list against fifty states, and that is the point of printing it with sources. A state that sounds familiar from an installer's brochure may be real, but until the statute or the revenue department confirms the mechanism and the term, we leave it out. The DSIRE database, run by the N.C. Clean Energy Technology Center, is the best single place to look for a state we did not cover, and its entries point to the statute so you can read the same text we did.

Sales tax rules we could verify

Sales tax exemptions are narrower than they sound. Most of them cover the equipment, not the labor, many require paperwork between the buyer and the seller, and some treat the installer's registration as the real gate. These are the four we could read at an official source.

Notice how different the mechanics are. Arizona's rule is a deduction taken by the retailer, so the buyer's job is to confirm that the contractor is registered and that the quote does not add tax the retailer can deduct. Florida's rule runs on a purchaser certification. New Jersey's runs on a form the buyer hands over. In every case the exemption is worth nothing if the paperwork is skipped, and the place to catch that is on the written quote, before signing. The guide to quote red flags lists the lines to question, and a tax line on an exempt system belongs on that list.

What each verified state does, in more detail

The tables compress the rules. These notes add what a homeowner needs when the rule meets a real assessor or a real contract.

Florida: a valuation rule with a long horizon

Florida's section 193.624 defines a renewable energy source device broadly, as equipment that collects, transmits, stores or uses solar, wind, geothermal or biogas energy, and the text names solar collectors and storage systems. For residential property it says the just value attributable to the device may not be considered. The residential rule applies to devices installed on or after January 1, 2013, so a system installed this year is inside it. The statute also carries a date, December 31, 2037, after which the amended subsections expire and the wording shifts toward an increase in just value attributable to the installation. We cannot say what the Legislature will do before then, and a system installed today will still be operating in 2037, so a conservative plan treats the long-run property tax effect as uncertain after that date.

On sales tax, the Department of Revenue's publication says Florida law exempts solar energy systems and all components of such systems. The Florida Solar Energy Center certifies the equipment list, and the list we read includes the photovoltaic modules and storage equipment such as batteries when part of the system. That list matters if your quote bundles a battery: the exemption language here reaches storage that is part of a solar system, which is a point to confirm in writing with the seller.

New York: fifteen years, and a local switch

New York's exemption lasts fifteen years and shields the increase in value attributable to the system. The part that surprises homeowners is subdivision 8, which lets a county, city, town or village, and many school districts, pass a local law or resolution declaring that no exemption under the section applies in their jurisdiction. If your jurisdiction opted out, the added value is taxed. The statute describes the opt-out start dates in terms of when construction began, so the date of your own installation relative to the local law matters. Call the assessor's office, ask whether an opt-out is on the books, and ask how the exemption is claimed. We did not read the application mechanics this month and will not guess at them.

Maryland: a clean statute with a cross-reference

Section 7-242 defines solar energy property as equipment installed to use solar energy or solar thermal electric energy to generate electricity used in a structure or supplied to the grid, or to provide hot water for use in a structure. Subsection (b) says that, except as provided in section 8-240 of the same article, such property is not subject to real property tax. We did not read section 8-240, so we cannot tell you what it carves out. Treat it as a reason to confirm with the State Department of Assessments and Taxation or your county, not as a reason to assume you are covered.

Texas: on-site use is the test

The Texas exemption applies to the appraised value added by a solar or wind-powered device, but only if the device is primarily for production and distribution of energy for on-site use. For a typical home that is satisfied by a rooftop array that offsets the household's load. A system sized far above the household's use, or built mainly to sell power, raises the question of what primarily means, and the Comptroller's guidelines for local officials, which we did not read, are where that gets answered. The Comptroller lists an application form, Form 50-123, so assume you must apply rather than receive the exemption automatically. A second provision in the text we read extends the exemption to the owner of a device who does not own the land, which matters for leased arrangements discussed below.

Massachusetts: three tests and twenty years

Clause Forty-fifth exempts an owned or leased system if it meets any one of three tests: it can produce no more than 125 percent of the property's annual electricity needs, it is 25 kilowatts or less in capacity, or it has a payment-in-lieu-of-taxes agreement with the municipality. The term is twenty years, with a longer period possible by written agreement. The statute excludes solar systems developed under a particular section of chapter 164 and systems owned by distribution or electric companies. A typical residential array of 8 kW is well under the 25 kW test, so size is unlikely to be the obstacle in this state. The obstacle is more likely to be procedure, and the assessor's office is where to ask how the exemption is claimed, since we did not read the filing rules.

Massachusetts also has a sales tax exemption for equipment tied to a solar, wind or heat pump system serving a main home, found in paragraph (dd) of section 6 of chapter 64H. We read the opening of that paragraph at the Legislature's site and could not retrieve the Department of Revenue's directive on how it applies to specific purchases, so the page treats the details as something to confirm.

New Jersey: certification first

New Jersey is the clearest example of an exemption that does not happen automatically. The Division of Taxation says that if a property has a renewable energy system certified by the local enforcing agency, the owner may receive a limited exemption, and the owner applies on Form CRES filed with the tax assessor. The exemption equals the difference between the total assessed value before and after the system, which is the same added-value design as New York's. The practical sequence is to get the certification, file the form, and keep the paperwork with the permit file.

On sales tax, the Division's bulletin on exemption administration says solar energy devices or systems that provide heating, cooling, or electrical or mechanical power, including devices for storing solar-generated energy, are exempt, and that a buyer can issue a completed Form ST-4 to the supplier. Its example draws a line between a collector, which is exempt, and insulation, which is not.

Arizona: a retailer deduction

Arizona's subsection M says the amount received from sales of solar energy devices is deducted from the tax base and that the retailer registers with the department as a solar energy retailer. The text we read does not define a solar energy device and does not mention batteries, so we make no claim about battery equipment. Local city taxes are a separate layer, so ask your contractor to show how city tax was handled on the invoice.

Minnesota: personal property and the production tax

Minnesota treats solar generating equipment as personal property that is exempt under section 272.02, subdivision 24, with the definitions in section 272.0295. Under that section, a system of one megawatt AC or less is exempt from the solar production tax, and larger systems pay $1.20 per megawatt-hour. A home system is far under the threshold. The details that remain, such as how the land and building are classified when a system is added, should be confirmed with your county assessor.

What an exemption shields: a worked example

The dollar value of an added-value exemption depends on two numbers you can estimate and one you cannot. You can estimate the system's price and your local property tax rate. You cannot know in advance how much value your assessor would add. The estimates below are illustrations with every input printed. They are not tax assessments and not predictions for any address.

The inputs: an 8 kW system priced at $23,600, which is 8,000 watts at the site's $2.95 per watt DC comparison line, the U.S. Department of Energy's Q1 2025 residential benchmark (modeled market price for an 8 kW system, 2024 dollars), checked October 30, 2026. Annual savings of $2,400, from 12,000 kWh at $0.20 per kWh. The rate of 20 mills, meaning $20 of tax per $1,000 of assessed value, which is 2.0 percent. An assessment ratio of 100 percent, which is a simplification, since many places assess at a fraction of market value. And the unknown: the added value. We test three cases, in which the assessor adds 50, 70 or 100 percent of the system price. Those percentages are assumptions to show the range, not data about how assessors behave.

Take the middle case. An added value of $16,520 at 20 mills is $330.40 a year, shown rounded to $330 in the table. Over New York's fifteen-year exemption term that is $4,956, and over Massachusetts's twenty-year term it is $6,608, ignoring changes in the rate. Those are the sums an exemption keeps in the household, and they are tied to the exemption lasting the whole term.

Now see what it does to payback, which the site always reports as simple payback with assumptions printed. Without any property tax, $23,600 divided by $2,400 of annual savings is 9.8 years. If the added value were taxed at $330.40 a year, the net annual saving is $2,069.60 and payback becomes $23,600 divided by $2,069.60, or 11.4 years. The exemption is therefore worth about one and a half years of payback in this illustration. That is a material difference, and it is also modest compared with the swing from the export rule or the price per watt, which is why the exemption belongs in a payback model as a line item and not as a reason to buy. The method page on how payback is calculated shows where such a line goes, and the break-even guide shows how a ten percent change in annual savings moves the answer.

A sales tax example, with the labor line separated

Sales tax moves a single payment instead of an annual one, so the arithmetic is simpler. Assume a state sales tax rate of 6 percent, which is an illustration and not any particular state's rate, and assume $12,000 of the $23,600 quote is taxable equipment while installation labor is not taxed. The tax would be $12,000 times 6 percent, or $720, which is $0.09 per watt on an 8,000-watt system. On the site's $2.95 per watt comparison line, that is about 3 percent of the price.

Two cautions follow. First, if the state exempts the equipment, you save the $720 only if the invoice shows the exemption, so check the line. Second, if your state taxes equipment and you add city or county tax, the figure rises, which is the reason to ask for the tax shown as its own line on the quote. A quote that rolls tax into the price per watt makes the comparison against the benchmark hard to read, and the quote comparison tool expects the price before and after tax to be entered separately.

Owned, leased or on a PPA: who pays the tax

When you own the system, the property tax rule above applies to your assessment. When a leasing company owns it, the system may be assessed to the owner or treated as part of your property, depending on the state, and a lease payment may or may not include the tax. Two statutes we read speak to this directly. Massachusetts's clause covers owned or leased systems. Texas's text extends the exemption to a device owner who does not own the land. Neither tells you how your particular lease handles a tax bill, so the lease itself is the document to read. Look for a clause that assigns responsibility for property taxes on the equipment and says whether the payment can rise when taxes do.

The question matters at sale as well. If the exemption runs for a fixed number of years and attaches to the property, a buyer inherits whatever years remain, and the remaining term is worth stating in the listing. The guide to payback if you move or sell covers how owned systems are treated at resale, and the guide on selling a house with leased solar covers the transfer steps for leased ones. The broader comparison of ownership structures is in lease, buy or PPA. This site does not assume any federal credit in these comparisons.

What an exemption does not do

An exemption can be narrower than the headline. Five limits come up most.

• It does not freeze your assessment. The home itself can still be reassessed, and a rise in the market value of the house is taxed normally. Only the solar-attributable piece is shielded.
• It may expire. New York's runs fifteen years and Massachusetts's twenty. Florida's amended wording has a stated expiry in 2037, after which the text reverts to its 2017 wording, which still disregards the value the device adds. A system lasts 25 to 30 years, and the DOE's guidance on panel longevity is the source for that range, so the exemption can end before the equipment does.
• It may need an application. New Jersey requires certification and Form CRES. Texas lists an application form. Assume you must ask unless the statute or the agency says otherwise.
• It may be switched off locally. New York lets local governments opt out. Several other states do the same, which is one of the reasons the published counts disagree.
• It does not touch income tax or the utility's rules. State income tax credits and export compensation sit in other guides. See state solar tax credits for the income side and net metering explained for the export side.

How to check your own address in twenty minutes

If your state is not in the tables, the steps below get you to a defensible answer. They follow the order of authority: statute first, then the agency that applies it, then your own assessor.

1. Search the DSIRE database for your state and filter for property tax and sales tax incentives for solar. Note the statute citation DSIRE lists, and do not stop at its summary.
2. Open the statute at the legislature's website and read the mechanism: exempt value, disregarded value or exempt equipment. Note the term, any sunset date, the list of covered technologies, and whether localities can opt out.
3. Find the state revenue or tax agency's page on the exemption. Agencies often publish a form, such as New Jersey's Form CRES or Florida's seller certification, that tells you what must be filed and by whom.
4. Call or email your county or town assessor with three questions: does this exemption apply here, how is it claimed, and when is the deadline relative to the installation date?
5. Ask the installer to show sales tax as its own line on the written quote and to state in writing whether the equipment was sold tax-exempt. If the answer is vague, treat it as a quote red flag.
6. Put the result in a payback model as a line item with its term, so the year the exemption ends is visible. The incentives checklist has a place to record each source and its check date.