Solar energy systems used for heating or cooling: out-of-pocket expenditures by the owner for the components and labor
Wind, hydroelectric, geothermal, solar thermal, solar PV, and other solar energy systems: the assessed value of the system
For most eligible renewable energy systems, the assessed value of the system is exempt from property tax. One exception is solar energy heating or cooling systems which are exempt from property tax the amount equal to the out-of-pocket expenditures for the components and labor associated with the system.
The property tax exemption is allowed every year that a qualifying system functions. The property tax exemption applies to both real property and mobile homes equipped with renewable energy systems and may only be claimed by property owners. Public utilities and other electricity retailers (excluding net metered customers) may not claim a property tax exemption for wind or solar power devices.
Ineligibility If Property Ownership Changes
Under H.B. 1234, renewable energy systems installed after December 31, 2014, are no longer eligible for a property tax exemption if the ownership of the property changes.
Claiming the Property Tax Incentive
Property owners that wish to claim this deduction must fill out Form 18865 and file it with the local county auditor. Questions about this incentive should be directed to the local auditor or assessor. Click here to find contact information for local officials. The Department of Local Government Finance outlines the incentive.
* Solar energy heating or cooling systems include solar energy systems used for domestic hot water and space heating, including heating of swimming pools, as well as industrial pre-heating.