What the exclusion does
California gives a new solar system a break on property tax. Right now, a solar system that qualifies for the state’s new construction exclusion doesn’t get added to your home’s assessed value. Santa Clara County’s assessor puts it plainly: “the installation of a qualifying solar energy system will not result in either an increase or a decrease in the assessment of the existing property.” The system goes on your roof. Your tax bill doesn’t move.
The date that matters: January 1, 2027
That exclusion is changing. Revenue and Taxation Code section 73 says the exclusion “shall remain in effect only until January 1, 2027.” Senate Bill 710, passed in 2025, kept that date but changed how the exclusion ends: it becomes inoperative rather than repealed. The State Board of Equalization explained what that means for a system already excluded: “After the exclusion becomes inoperative, any solar energy system previously excluded as new construction will remain excluded from property tax until the property changes ownership.”
So a system that qualifies before January 1, 2027 keeps its exclusion for as long as the current owner holds the home. A system that finishes after that date doesn’t get the exclusion at all, and its value can be added to the assessment, raising the bill every year after. The county assessor decides whether a given system qualifies, not the homeowner and not the contractor.
What has to happen before then
Two things have to be true before the deadline, and they’re not the same thing.
First, the system has to be installed and pass the city’s final inspection. The Board of Equalization’s rule for new construction says a project counts as complete once “the property, or a portion thereof, has been inspected and approved for occupancy by the appropriate governmental official.” That inspection is what starts the clock on the exclusion.
Second, PG&E has its own step. Its guidance for new solar customers says: “For safety reasons, don’t turn on your system until PG&E gives you official written permission to operate it.” PG&E asks for a copy of the final building permit as part of that process. A system can pass its city inspection and still be waiting on PG&E’s permission to operate, so both steps need room on the calendar. Neither this article nor anyone else can say how long either step takes for a given project, and the only way to miss the date is to run out of time on one of them.
What it means for a Santa Clara County home
A solar project already involves permits, inspections and utility approval before it’s done. The property tax exclusion adds a deadline to that same sequence, not a separate one. Whether a given project can finish inspection and get PG&E’s permission to operate before January 1, 2027 depends on where the project stands today, and the county assessor makes the final call on whether it qualifies.
Book a free estimate
Air & Plumbing Systems installs solar and battery systems for homes across Santa Clara County and the surrounding Bay Area. Visit https://airandplumbing.com/ to book a free estimate on a new system, or to ask how the property tax exclusion applies to your home. CSLB #901246.