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Independent U.S. Solar Guidance

Section: Incentives & Policy

Solar Property Tax Exemptions by State: Which States Protect You From a Higher Bill

By ClearWatt Editorial Team · Published June 23, 2026

The restored 1910 Harris County Courthouse in Houston, Texas, an example of a county government building that administers local property tax records
Photo: i_am_jim / Wikimedia Commons (CC BY-SA 3.0)

Short answer: Solar panels typically raise your home’s assessed value, which would normally mean a higher property tax bill — but many states exempt that added value from taxation. New York, New Jersey, Texas, Arizona, Florida, and South Carolina each offer this protection under different statutes, with different scope, different expiration dates, and different filing requirements, so the exemption is never automatic everywhere.

Why this exemption exists in the first place

Property tax is normally calculated as a percentage of your home’s assessed value, and a rooftop solar installation is a real, physical improvement that appraisers can and do add to that value. Without a specific carve-out, installing solar would function like adding a new addition to your home: it raises resale value, and it raises the annual tax bill along with it, partially offsetting the electricity savings the system was installed to capture.

To prevent that outcome from discouraging adoption, a number of states passed laws specifically excluding the value attributable to a solar energy system from the property tax assessment. The result, where it applies, is that you keep the resale-value benefit of having solar without an accompanying tax increase — but the exact mechanics (full exemption vs. partial, automatic vs. filed, permanent vs. time-limited) differ enough between states that “does my state have this” is only the first of several questions worth answering.

New York: 15-year exemption, must file Form RP-487

Under New York Real Property Tax Law § 487, the added value from a qualifying solar energy system is exempt from property tax assessment for 15 years following installation. This exemption is not automatic and not universal within the state: individual municipalities and school districts are permitted to opt out of offering it, and homeowners must file Form RP-487 with their local assessor by the local taxable-status date, which is typically March 1, to claim it. Because opt-outs are decided locally, confirm with your specific municipality’s assessor’s office that the exemption is in effect in your jurisdiction before assuming it applies.

New Jersey: permanent, uncapped, requires Form CRES

New Jersey’s exemption, under N.J.S.A. § 54:4-3.113a (P.L. 2008, c.90), excludes the entire increase in assessed value attributable to a solar installation from property tax, with no cap on the amount exempted and no sunset date written into the statute. Like New York, this is not automatic — homeowners must file Form CRES with their local municipal assessor to claim it. New Jersey’s exemption pairs with the state’s full 1:1 retail-rate net metering policy under N.J.S.A. § 48:3-87(e), making it one of the more consistently solar-favorable state policy environments discussed on this site.

Texas: 100% exemption, covers leased and third-party-owned systems

Under Texas Tax Code § 11.27, Texas exempts 100% of the appraised value attributable to a solar or wind energy device used primarily for on-site production from property tax. A notable detail: under subsection 11.27(a-1), the exemption applies even when the owner of the solar equipment is not the owner of the property — relevant for homeowners with a leased system or a third-party-owned (TPO) arrangement, where a leasing company technically owns the panels. Claiming the exemption requires filing Form 50-123 with the county appraisal district; once filed, it does not require annual refiling or have a built-in expiration date.

Arizona: no added value for tax purposes, permanent

Arizona’s approach, under A.R.S. § 42-11054(C)(2) and (C)(4), is structured differently from a percentage exemption: the statute simply deems a solar energy device to add no value to the property for tax assessment purposes at all. This is a 100%, permanent exemption with no expiration date, and it covers residential, commercial, and industrial solar installations alike. Arizona pairs this favorable property tax treatment with one of the less favorable net metering environments discussed in our net metering guide, a reminder that a state’s solar policy landscape is rarely uniformly good or bad across every category.

Florida: 100% for residential, 80% for non-residential, authorized through 2037

Florida’s exemption, under Florida Statutes § 193.624, excludes 100% of the assessed-value increase from a renewable energy device on residential property installed on or after January 1, 2013. For non-residential property, installed on or after January 1, 2018, only 80% of the added value is excluded. Unlike New Jersey’s and Arizona’s open-ended exemptions, Florida’s is currently authorized only through December 31, 2037, meaning it has a defined end date under current law rather than permanence. It’s worth noting that an earlier Florida statute on this topic, § 196.175, was repealed in 2013 and replaced by the current § 193.624 — if you encounter the older citation elsewhere, it’s outdated.

South Carolina: exemption up to 20kW

South Carolina, already covered elsewhere on this site in the context of its state tax credit, also offers a property tax exemption. Under S.C. Code § 12-37-220(B)(53), residential solar systems up to 20 kW are fully exempt from added property tax assessment. South Carolina separately offers a 25% state income tax credit capped at $3,500 per year under S.C. Code § 12-6-3587, making the property tax exemption one piece of a broader state incentive package rather than a standalone benefit.

Six states compared

State Statute Coverage Filing required?
New York RPTL § 487 100% of added value, 15 years, local opt-out possible Yes — Form RP-487, by local taxable-status date (usually March 1)
New Jersey N.J.S.A. § 54:4-3.113a 100% of added value, permanent, no cap Yes — Form CRES with municipal assessor
Texas Tax Code § 11.27 100% of appraised value; applies to leased/TPO systems Yes — Form 50-123 with county appraisal district; no refiling needed
Arizona A.R.S. § 42-11054(C)(2), (C)(4) Deemed zero added value, permanent No specific form cited in statute; confirm with county assessor
Florida (residential) Fla. Stat. § 193.624 100% of added value, authorized through Dec. 31, 2037 Confirm with county property appraiser
South Carolina S.C. Code § 12-37-220(B)(53) 100% exemption up to 20kW Confirm with county assessor

What this means if your state isn’t listed here

These six states are documented, well-sourced examples, not an exhaustive national list — this article covers the states with clear, verifiable statute language rather than claiming coverage of all 50. If your state isn’t among them, that doesn’t necessarily mean no exemption exists; it means you need to check directly. Start with DSIRE, the Database of State Incentives for Renewables & Efficiency, and confirm with your county tax assessor’s office, since property tax administration happens at the county or municipal level even when the underlying exemption is created by state law.

Also worth internalizing from the states above: even where an exemption exists, it is frequently not automatic. New York, New Jersey, and Texas each require a specific form filed with a specific office, sometimes by a specific deadline. Installing solar and simply assuming your tax bill won’t change is a real way to end up with an unwanted assessment increase in a state where the protection existed but had to be claimed.

This article is for general information and is not tax or legal advice; property tax rules can change and are administered locally, so confirm current requirements with your county assessor or a tax professional before relying on any figure above.

Sources

Frequently asked questions

Does installing solar panels increase my property taxes?

It can, because solar panels typically raise your home's assessed value, and property tax is normally based on that assessed value. Many states specifically prevent this by law, exempting some or all of the added value attributable to solar equipment from the property tax assessment, so the value increase doesn't translate into a higher tax bill. Whether that protection exists, and whether it's automatic, depends entirely on your state.

Is a solar property tax exemption automatic, or do I have to apply?

It depends on the state. Arizona and Texas exemptions apply once the equipment is on the property, though Texas still requires filing Form 50-123 with the county appraisal district. New York requires filing Form RP-487 with your local assessor by the local taxable-status date, usually March 1. New Jersey requires filing Form CRES with the municipal assessor. None of these happen automatically just because you installed solar — check your specific state's filing requirement.

Do these exemptions expire?

It varies significantly by state. New Jersey's exemption under N.J.S.A. 54:4-3.113a has no sunset date. Arizona's exemption under A.R.S. 42-11054 is also permanent. New York's exemption under Real Property Tax Law 487 runs for 15 years from installation. Florida's residential exemption under Florida Statutes 193.624 is currently authorized only through December 31, 2037. Confirm your state's current expiration terms before assuming permanence.

Does a solar property tax exemption apply if I lease my system instead of owning it?

This varies by state and by the specific statute's wording. Texas is a notable example where the exemption under Tax Code 11.27(a-1) explicitly applies even when the equipment owner isn't the property owner, which is relevant for leased or third-party-owned (TPO) systems. Other states' statutes may be silent on this point or structured differently, so confirm with your county assessor or a tax professional if your system is leased rather than owned outright.

Written by

ClearWatt Editorial Team

The ClearWatt Editorial Team researches and writes every guide on this site. We work from primary sources — federal and state agencies (EIA, NREL, DSIRE, IRS), legislative text, utility rate schedules, and manufacturer documentation — rather than summarizing other websites' coverage of the same topic. We are not licensed solar installers, financial advisors, or tax preparers, and nothing published here is a substitute for advice from one. When a figure can't be traced to a specific, current source, we say so and give a range instead of a false-precision number. Articles are dated, and we correct confirmed errors promptly. See our Editorial Policy for the full standard every guide is held to, and About & Methodology for the sources we draw from.