Skip to main content
Simpliphi Website Banner Advertisement

 

25 states Offer sales tax exemptions for solar energy

Solar Tax Exemptions

Share

Solar tax exemptions include both property and sales tax exemptions provided by state and local governments to individuals and companies that install solar energy property.

Property Tax Exemptions

Property tax exemptions allow businesses and homeowners to exclude the added value of a solar system from the valuation of their property for taxation purposes. An exemption makes it more economically feasible for a taxpayer to install a solar system on a residential or commercial property. Because property taxes are collected locally, some states have granted local taxing authorities the option of allowing a property tax incentive for solar. There are 36 states that offer property tax exemptions for solar energy. For example, New Jersey enacted legislation exempting solar systems from local property taxes if the system is used to meet on-site electricity, heating, cooling, or general energy needs. In Nevada, one of their renewable energy property tax exemptions allows businesses to apply for a property tax abatement of up to 55 percent for up to 20 years for real and personal property used to generate solar. Generation facilities must have a capacity of at least 10 megawatts.

Sales Tax Exemptions

Sales tax incentives typically provide an exemption from the state sales tax (or sales and use tax) for the purchase of a solar energy system. This type of exemption helps to reduce the upfront costs of a solar installation. There are 25 states that offer sales tax exemptions for solar energy. Arizona, for example, provides a sales tax exemption for the retail sale of solar energy devices and for the installation of solar energy devices by contractors. Colorado exempts from the state's sales and use tax all sales, storage, and use of components used in the production of alternating current electricity from a renewable energy source. The exemption also includes all sales, storage, and use of components used in solar thermal systems.

Other Solar Tax Exemption Links

  • Solar Policy Guide, Database of State Incentives for Renewables and Efficiency (DSIRE) - this guide describes provides a list and descriptions of solar tax exemptions across the United States.

Related News

Monday, Sep 19, 2022

Solar Industry Secures Extension of California Property Tax Exclusion

SACRAMENTO, Calif. — California Governor Gavin Newsom signed SB 1340 into law yesterday, extending the state’s property tax exclusion for solar projects for two years and providing near-term certainty for America’s largest solar market. Following is statement from Rick Umoff, senior director and counsel, California, at the Solar Energy Industries Association:

Read More
Tuesday, Aug 23, 2022

Extended Property Tax Exclusion Will Keep Clean Energy Investments in California

SACRAMENTO, Calif. — Today, the California State Legislature approved a two-year extension of a property tax exclusion for solar projects, providing stability to solar companies facing significant uncertainty around project development as they work to help California meet its climate targets.

Read More
Friday, Aug 12, 2022

House Takes Important Step Forward on Clean Energy Progress by Passing Inflation Reduction Act

WASHINGTON, D.C. — Today, the House of Representatives approved the Inflation Reduction Act, which includes historic, long-term provisions to decarbonize the electric grid with significant clean energy deployment and domestic manufacturing.

Read More