Yes, effective September 28, 2008, the sunset date for the active solar energy system new construction exclusion was extended through the 2015-16 fiscal year. The statute is now scheduled to sunset on January 1, 2017.
Generally, when something of value is physically added to real property, the addition is assessed at current market value and this value is added to the existing base year value of the real property. When an active solar energy system is installed, it is not assessed, meaning that the existing assessment will not increase.
No. The system is excluded from the definition of new construction and is, therefore, not assessable. However, a taxable possessory interest in the roof area may have been created when the lease was executed.39
39 Rule 20, Taxable Possessory Interests [www.boe.ca.gov/lawguides/property/current/ptlg/ rule/20.html].
No. The system is excluded whether it is leased or owned. The real property appraiser in the assessor’s office should coordinate information with the business property auditor-appraiser when a permit for construction is issued.
The active solar energy system would be classified as a fixture (real property) if it meets the tests of Rule 122.5, and would be excluded from the definition of new construction if it meets the definitions of section 73. Therefore, it would not be considered assessable business property. Ownership of the system is not a condition of exclusion. Further, there are no specific use requirements for the energy produced by the system.
No. There are no residency provisions for the owner of a solar energy system.
No. The exclusion is not restricted to residential buildings.
No. The provisions of the new construction exclusion to the initial purchaser for a solar energy system are prospective, and only qualifying improvements completed on or after January 1, 2008 are eligible for the exclusion.
No. Since the builder was assessed on the lien date following the date of completion of the new construction, the subsequent purchaser is not eligible for the solar energy system new construction exclusion.
Example: A home with an active solar energy system is completed on November 15, 2009, and the new construction of the home is 100 percent complete on the lien date for purposes of determining the assessed value of the property for the 2010-2011 regular roll. If the home sold on or before December 31, 2009, the initial November 2012 24
purchaser would be eligible for the new construction exclusion for the solar energy system. If the home did not sell until after the lien date, for example January 2, 2010, the initial purchaser would not be eligible for the new construction exclusion for the solar energy system because the builder would receive the exclusion as of the lien date.
A property owner who adds an active solar energy system to an existing structure does not have to file for the exclusion. The exclusion should be automatically granted when the assessor receives a copy of the building permit.
However, if a developer installs an active solar energy system while constructing a new building, the initial purchaser of that building may receive the exclusion if (1) the building was completed on or after January 1, 2008, (2) the developer/builder did not receive the exclusion, and (3) the purchaser files a form with the assessor. The form is called the Initial Purchaser Claim for Solar Energy System New Construction Exclusion and is available from the assessor of the county where the property is located. After the assessor receives this form, the new base year value of the building may be reduced by the value of the active solar energy system, less any rebates or tax credits received. The builder will be able to provide the value of the system and any rebates or tax credits that they received.
