When a solar energy system may lower property taxes

On Behalf of | Aug 24, 2020 | tax law | 0 comments

If real estate owners’ property taxes seem high, they may want to search for issues with the assessment made by the County Assessor’s office. One factor that may bring down the amount of property tax is the incentive for solar energy systems. 

According to the Illinois General Assembly, property taxes may be lower if owners use a solar system on their property, but only if the system meets specific requirements. 

Solar energy definitions

State law defines solar energy as the wavelengths of the sun’s radiant energy that can transfer heat or have photosynthetic or photovoltaic use. The system in question must be a solar collector or storage mechanism that uses the sun’s energy to generate electricity or heat or cool gas, liquids or other materials that the owner consumes primarily on his or her property. 

The system must conform to the regulations and standards that the Department of Commerce and Economic Opportunity sets. The system does not meet requirements if it is distribution equipment that the property owner could use just as well in a conventional system unless the components meet the efficient solar energy use requirements. 

Special assessment

According to DSIRE, a supporter of renewable energy in the U.S., to take advantage of this property tax incentive, the owner must file a claim for alternate valuation with the county assessor’s office. The county assessor then has to do a special assessment and come up with the value of the property if the owner had a conventional system as well as the value with the solar energy improvements. The valuation is the lower amount of the two values.