Does solar increase home value in California?

What California law actually settles — and what it does not

California Revenue and Taxation Code section 73 excludes an “active solar energy system” from the term “newly constructed.” Subdivision (a) states that “newly constructed,” as used in the state Constitution, “does not include the construction or addition of any active solar energy system, as defined in subdivision (b).” (Rev. & Tax. Code §73(a), leginfo.legislature.ca.gov, verified 2026-09-17.)

The State Board of Equalization is explicit about what that is and is not: “The property tax incentive for the installation of an active solar energy system is in the form of a new construction exclusion. It is not an exemption. Therefore, 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.” (BOE, Active Solar Energy System Exclusion, verified 2026-09-17.)

So the statute settles an assessment question. It does not settle a market value question. Nothing in section 73 states, implies or measures what a buyer will pay for a house with panels on it.

The assessment mechanics have their own page: do solar panels increase property taxes in California.

The exclusion ends when the home changes hands

This is the part most pages skip, and it is the part that matters to anyone thinking about resale.

Section 73(f): “Notwithstanding any other law, the exclusion from new construction provided by this section shall remain in effect only until there is a subsequent change in ownership.” (Rev. & Tax. Code §73(f), verified 2026-09-17.)

A change in ownership is its own reassessment event under Article XIII A. The exclusion protects the seller’s existing assessment from being increased by the addition of the system; it does not travel with the house to the buyer. Ask a county assessor or a qualified tax professional how a specific sale would be handled — a list of county assessors is published by the BOE.

The exclusion is scheduled to become inoperative on 1 January 2027

Section 73(i)(1): “Except as provided in paragraph (2), this section shall remain in effect only until January 1, 2027.” Section 73(i)(2) then preserves what has already been granted: “active energy solar systems that qualify for an exclusion under this section prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership.” (Rev. & Tax. Code §73(i), verified 2026-09-17.)

Section 73 was last amended by SB 710 (Stats. 2025, Ch. 328), approved 3 October 2025 and effective 1 January 2026. The Legislative Counsel’s Digest describes SB 710 as making “a technical change to the existing active solar energy system exclusion by instead making the repeal date of January 1, 2027, the date the exclusion becomes inoperative.” (SB 710, leginfo, verified 2026-09-17.)

The BOE has published how it reads the two dates in the statute. Letter to Assessors No. 2024/031, dated 26 August 2024, states that “the section 73 new construction exclusion applies to any active solar energy system new construction in progress or completed before January 1, 2027,” and that “[a]fter the exclusion sunsets, any solar energy system previously excluded as new construction will remain excluded from property tax until the property changes ownership.” The same letter warns that not all construction in progress qualifies: completed new construction is assessable on the lien date and on the day of completion. (BOE LTA 2024/031, verified 2026-09-17.)

Two things follow, and only two. First, the deadline is a completion deadline, not a signing deadline. Second, a sunset can be extended by the Legislature — it has been extended repeatedly since 1980 (BOE LTA 2024/031 recounts the history) — so check the current statute text rather than any page, including this one.

What the sale-price research found, and where it stops

Two named studies are worth reading in full. Neither produces a California promise.

Berkeley Lab, “Selling Into the Sun: Price Premium Analysis of a Multi-State Dataset of Solar Homes” (LBNL-6942E, Hoen, Adomatis, Jackson, Graff-Zivin, Thayer, Klise and Wiser, 2015). The dataset was 22,822 home sales, of which 3,951 had PV, across eight states — California, Connecticut, Florida, Massachusetts, Maryland, North Carolina, New York and Pennsylvania — over 2002–2013. The authors report that “average premiums equate to approximately $4/W or $15,000 for an average-sized 3.6-kW PV system.” (emp.lbl.gov, verified 2026-09-17.)

The report’s own limits are as important as its headline. The fact sheet states that “[a]ll PV systems in this dataset were homeowner owned rather than leased,” that the analysis “focuses only on homes with host-owned PV systems, not those with leased PV systems,” that the sample was limited to homes no more expensive than $900,000, and that “[t]he market appears to depreciate PV systems in their first 10 years at a rate exceeding the rate of PV efficiency losses” with the data not allowing analysis into the second decade. (LBNL-6942E fact sheet, verified 2026-09-17.)

Read the dates: 2002–2013. That is before California’s current Solar Billing Plan tariff and before the 2026 federal credit position. A 2015 average across eight states is not a 2026 valuation for one house in one county. For the current federal position, see what the ended homeowner credit leaves available in 2026.

Zillow research, “Homes With Solar Panels Sell for 4.1% More,” published 16 April 2019. Zillow reported that “[n]ationally, homes with solar-energy systems sold for 4.1% more on average than comparable homes without solar power,” about $9,274 on a median-valued home, analysing sales from 1 March 2018 to 28 February 2019 and controlling for observable attributes including bedrooms, bathrooms, square footage, age and location. Zillow’s metro figures differ from each other: Riverside, CA at 2.7%; Los Angeles and San Francisco at roughly 4%; the New York City metro at 5.4%. Zillow notes that unmeasured features may contribute to the premium. (zillow.com/research, verified 2026-09-17.)

Three metro figures inside one state that differ by more than a percentage point are the finding. A national average is not a number for your ZIP code.

Leased and third-party-owned systems are a separate question

Berkeley Lab looked at this specifically, in California, and the answer was not the same. “Leasing Into the Sun: A Mixed-Method Analysis of Transactions of Homes With Third Party Owned Solar” (LBNL-1007003, Hoen, Rand and Adomatis, January 2017) analysed 20,106 California home sales — 113 with third-party-owned PV, 2,914 with non-TPO PV and 17,079 without PV — and “fails to uncover statistically significant premiums for TPO PV homes nor for those with pre-paid leases as compared to non-PV homes,” against roughly $4.39 per watt for host-owned systems. (osti.gov, verified 2026-09-17.)

The authors are careful, and so should anyone citing them be: 113 TPO sales is a small sample, the TPO transactions were from 2011–2013, and the report frames its result as an “absence of evidence” rather than a finding that TPO systems reduce value, recommending larger and more recent datasets.

What that means practically: if the system on the roof is leased or on a power purchase agreement, the host-owned premium research does not describe it, and the contract’s assignment and buyout terms become the live issue at sale rather than a valuation percentage. Business and Professions Code section 7169(c)(11) lists, among the supporting information a solar disclosure may carry, “[t]he impacts that the financing options, lease agreement terms, or contract terms will have on the sale of the consumer’s home, including any balloon payments or solar energy system relocation that may be required if the contract is not assigned to the new owner of the home.” (Bus. & Prof. Code §7169(c)(11), verified 2026-09-17.)

The two structures are compared on their own page — what actually differs between a solar PPA and a lease — and the sale itself is covered in selling a California home with a solar lease or PPA.

How to get an answer for your actual address

None of the above is a valuation. These are the steps that produce one.

1. Get the system’s ownership status in writing: owned outright, financed with a loan, leased, or on a power purchase agreement. The four are not interchangeable in any of the research above.
2. If it is leased or on a PPA, read the assignment clause, the buyout clause and any relocation or balloon term before treating the system as an asset at sale.
3. Ask a licensed California appraiser to value the specific property. An appraiser, not a sales estimate, is the profession that answers this question.
4. Ask a real estate professional what has actually closed in the immediate market — not a national average.
5. For the assessment question, contact the county assessor. BOE states there is “no form or filing required to receive the exclusion” for a homeowner adding a system, and that “[i]f you think you have been assessed for the installation of an active solar energy system, you should contact your County Assessor.” (BOE FAQ, verified 2026-09-17.)

Before any of that, settle whether the roof is a candidate at all: property-specific solar suitability. If a lien was recorded against the property in connection with the system, read how a UCC-1 filing shows up at title before listing.

A referral request is optional and separate

California Rate Relief is a private referral service. A referral request does not value a property, does not establish program eligibility, does not approve financing and does not promise a price, a savings figure or a resale outcome. If you request a review, compare the resulting provider documents on your own before you decide.

Frequently asked questions