It’s no secret. Solar panels can significantly increase the value of your home. According to studies by both Zillow and a Department of Energy-sponsored study by the Lawrence Berkeley National Laboratory, homes with solar panels sell on average 4% more than those without solar panels, with the average solar households selling for $15,000 more.
But along with this fact comes an important question: “Do solar panels increase my property taxes?”
The good news is that in many states, the answer is no. Solar panels do not increase your property taxes.
Let’s take a closer look at solar property tax exemptions and see which states offer this opportunity.
WHAT ARE SOLAR PROPERTY TAX EXEMPTIONS?
Solar property tax exemptions are an opportunity for solar homeowners to exclude the added value of solar panels on their home for tax assessment purposes. Essentially, the solar property tax exemption acts as if the solar panels never existed on your home, even though they have added value to your property.
For instance, if your state’s property tax rate is 1.5% and your solar panels add $15,000 to your property value, the solar property tax exemption would save you $225 a year in taxes.
Over the lifetime of your solar panel system, that $225 a year would add up quickly. With the solar property tax exemption, your solar payback period will be significantly reduced, and your return on investment will get a good boost.
WHICH STATE HAVE SOLAR POPERTY TAX EXEMPTIONS?
A majority of states offer a solar property tax exemption in one form or another. A total of 33 states offer up to a 100% property tax exemption for your solar panel installation.
Check out the list of states that offer solar property tax exemptions:
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Dakota
- Washington D.C.