Selling or buying a home with solar panels: property tax, paperwork and what transfers

Two questions at a sale

When a home with solar changes hands, two questions come up: what the system does to the property tax bill, and what paperwork moves with it. The answers differ by state, so the Michigan section and the California section below are separate. The federal date is the same in both: the IRS says the Residential Clean Energy Credit “is not available for any property placed in service after December 31, 2025.”

Michigan: property tax at a sale

Michigan’s State Tax Commission Bulletin 6 of 2020 explains the rule. Two laws, 2019 PA 116 and 117, amended MCL 211.34d and MCL 211.27 so that an alternative energy system, photovoltaic systems included, of not more than 150 kW whose annual output doesn’t exceed annual consumption is a normal-maintenance item. The assessor doesn’t count it as an increase in true cash value of residential real property until the property is sold. The statute text is in MCL 211.27(2)(p).

The last clause is the one a sale turns on: after a sale the assessor may add the system’s value. A seller can say the system hasn’t been counted so far, and a buyer should know the assessor may count it once the home changes hands.

Two limits on this rule. It covers systems up to 150 kW whose output doesn’t exceed annual use, and both limits have to be true of the system on your roof. And the 2023 PA 108 solar exemption is for utility-scale facilities, not homes, so don’t let anyone cite it for a house.

The utility side

DTE’s Rider 18 says excess generation goes to an Excess Generation Bank carried forward, and “Credits do not expire and cannot be withdrawn or transferred.” Under that wording a seller can’t withdraw banked credits or transfer them, so ask DTE in writing what happens to the account and the interconnection agreement at a sale. DTE’s overview says the customer signs the Parallel Operating Agreement.

Consumers Energy’s steps end with signing a Generator Interconnection Operating Agreement. Ask Consumers what a change of owner requires, and give the buyer the agreement and the commissioning record.

Paperwork a buyer can ask for

On a DTE system there’s a sticker to look for: after approval, DTE says, the installer has 180 days to install and upload an approved electrical inspection sticker signed by the local governing authority. A buyer can ask the seller for these papers:

1. The city’s electrical permit and the inspection record. The permit is pulled under the contractor’s state license number, so that number should be on it.
2. The utility’s approval to operate.
3. The equipment warranties, and the contractor’s roof-penetration warranty if there’s one. The MPSC’s tips say to ask what warranties come with a system.
4. The contract, if the system was financed, leased or bought under a PPA.

In its July 15, 2026 lawsuit against Climax Solar, the Attorney General alleges that funds were released before systems were finished or utility-approved. These are allegations in a case still before the court, and the check they point to is one a buyer can make: is the system finished, and has the utility approved it?

If the panels are leased or under a PPA, the first question for the company, in writing, is whether the contract can transfer to a buyer of the home and what the buyer has to do. Solar leases, PPAs and loans has the full list.

California: property tax at a sale

California Revenue and Taxation Code section 73(a) says “newly constructed” for property tax doesn’t include the construction or addition of any active solar energy system. That exclusion is not permanent. Section 73(i) says the section remains in effect only until January 1, 2027, and systems that qualify before 2027 continue to be excluded until a change in ownership. The Board of Equalization’s 2024 letter to assessors says the exclusion applies to new construction in process or completed before January 1, 2027 unless it’s extended.

So a system completed before 2027 stays excluded until a change in ownership. A system completed on or after January 1, 2027 falls outside the exclusion as the statute stands. Ask the county assessor how a sale at your address would be treated.

Paperwork and tariff questions

Business and Professions Code 7169 requires the Solar Energy System Disclosure Document on the front page of every solar energy contract, and the supporting information form asks whether the contract can transfer to a new homeowner and whether the deal is a PPA or lease, where the customer does not own the system. If you’re selling a home with a lease or PPA, the cover page and supporting form are the first documents to find.

Tariff terms are tied to dates. The original net billing customer can use the NBT tariff for nine years, and NEM 2.0 customers may remain on that tariff for 20 years from the date they interconnected. Ask your utility (PG&E, SCE or SDG&E) how either term is treated at a sale before you advertise the tariff as a selling point.

New construction

For a newly built single-family home, the 2025 Building Energy Efficiency Standards, effective January 1, 2026, require solar PV under section 150.1(c)14, with five exceptions. That’s a building requirement, and it doesn’t set any rule for a sale. Two other lines touch a newly built home with solar. CSLB says the 7169 cover-page requirement doesn’t apply to a system installed as a standard feature on new construction. And the CPUC says customers required by building code to add solar don’t get the PG&E and SCE export adder that other residential applicants before the end of 2027 receive.

A short list for sellers and buyers

If you’re listing, say in plain words whether the system is owned outright, financed, leased or under a PPA, and give its size in kW DC and the year it was finished. If you’re buying, ask the seller to put the same facts in writing, with the utility’s name.

Then gather the contract, the permit and inspection record, the utility’s approval, the warranties and any financing or lease papers. Ask the utility, in writing, what a change of owner requires. Before the listing goes up, ask the county assessor how a sale at your address would be treated.