Tax and Valuation Secrets: Residential Solar Panel Depreciation & Home Appraisals

Once homeowners get past the sticker price of solar, the smart ones start asking the money questions that really matter over time. Will solar raise my property taxes? Will it actually add to what my home is worth? And the one I hear most from business owners: can I write off the depreciation, especially if I run an S-Corp?

These are excellent questions, and the answers are genuinely good news in Oregon, with one big caveat I want to be upfront about. I’m a licensed solar expert, not a CPA or a tax attorney. What follows is general information to help you understand the landscape, not tax advice for your specific situation. Before you make any decision based on the tax angles, run it by your own tax professional. With that said, let me walk you through what’s actually going on.

Will solar increase my property taxes in Oregon?

This is the fear that stops a lot of people, and in Oregon the answer is a clean no.

Under Oregon law, specifically ORS 307.175, the value that a qualifying solar system adds to your home is exempt from property tax assessment. In plain English, your solar panels make your home worth more, but the county cannot tax you on that added value. Even better, for qualifying grid-connected residential systems the exemption is automatic. There’s no separate application to file.

So you get a genuine win-win. Your home value goes up, and your property tax bill does not follow it up. On a typical home, that’s real money in equity that never gets taxed.

There is one timing detail worth knowing. This exemption is currently scheduled to phase out for systems installed after July 1, 2029. Homeowners who install before that deadline keep the exemption for the life of the system. That’s not a reason to rush your decision, but if you’re already leaning toward solar, it’s a real benefit that won’t be around forever.

Does solar actually increase my home’s value?

Yes, and this is well-documented, not just a sales claim. Multiple large studies back it up.

Lawrence Berkeley National Laboratory, in its “Selling into the Sun” research, found that solar homes sell for a premium of roughly $3 to $4 per watt of installed capacity, which works out to a national average premium in the neighborhood of $15,000. Separately, Zillow’s analysis of home sales found that homes with solar sold for about 4.1 percent more than comparable homes without it. On a $500,000 Rogue Valley home, a 4 percent premium is around $20,000.

A few things influence how much premium your home actually captures. The biggest is ownership. Owned solar, whether paid in cash or financed and paid off, adds value cleanly. Leased solar is more complicated at sale, because the buyer has to be willing to take over the lease, which can slow things down. If resale value matters to you, owning your system is the stronger play.

When it comes to the appraisal itself, an experienced appraiser can assign value to an owned solar system, so it’s worth making sure your system’s details and production records are documented and handed over at sale. Combine the resale premium with Oregon’s property tax exemption and you get that rare situation where an improvement raises your home’s value and your buyers’ interest without raising your tax bill.

The depreciation question: can you write off residential solar?

Now to the question that brings a lot of business owners to this page. Here’s the straight answer, and then the important nuance.

For a normal personal residence, no, you cannot depreciate your solar panels. Depreciation is a business tax tool. It lets a business recover the cost of an income-producing asset over time. Your home is not a business asset, so the panels on your personal roof don’t get depreciated, full stop.

That surprises people, because they’ve read about the big tax advantages of “solar depreciation.” Those advantages are real, but they live on the commercial and business side of the tax code, not the residential side. This is the single most common point of confusion I see, so it’s worth stating plainly.

Where depreciation actually applies: business-use systems

Depreciation enters the picture when a solar system is genuinely a business asset, used for business purposes. Think of a solar array on a commercial building your business owns, on a rental property, on a farm, or otherwise powering a legitimate business operation. In those cases, the picture changes significantly.

Business-owned solar can generally be depreciated under a schedule called MACRS, which lets a business recover the system’s cost over a short period, often around five years. On top of that, businesses may still be able to combine depreciation with the commercial version of the federal Investment Tax Credit, known as Section 48E, which unlike the residential credit did not disappear at the end of 2025. Bonus depreciation, which lets a business accelerate even more of the write-off into the first year, may also apply, though the exact percentage has been changing year to year, which is one more reason to lean on a current tax professional rather than an article.

Stacked together, these can be powerful. It’s not unusual for a business in a high tax bracket to recover a large share of a solar system’s cost in the first year or two through the credit and depreciation combined. If you own a business with a suitable property, this is genuinely worth exploring with your accountant.

“But I run an S-Corp from home”

Here’s the nuance that trips people up. The magic word isn’t “S-Corp,” it’s “business use.” Simply having an S-Corp does not let you depreciate panels on your personal home. What matters is whether the solar system is actually a business asset serving a business purpose.

If your business owns and operates out of a commercial building, solar on that building is a business asset, and the business toolkit applies. If you claim a legitimate home office, there can be some partial business treatment of home expenses, but it is limited, specific, and easy to get wrong, and it does not turn your whole home solar system into a fully depreciable business asset. This is exactly the kind of situation where a good CPA earns their fee, and where getting it wrong invites problems. So by all means raise it with your tax professional, but go in understanding that the S-Corp itself isn’t a magic key. The business use of the asset is what counts.

The federal credit context

It’s worth putting all this in context of the federal credit changes, because they’re connected. The 30 percent federal residential solar tax credit ended for systems placed in service after December 31, 2025. That’s the homeowner credit, gone. The business-side credit under Section 48E, the one that pairs with depreciation, remains available for qualifying business projects for now. If you want the fuller history of how the federal solar credit rose, fell, was restored, and finally expired for homeowners, we laid out that whole timeline in our breakdown of solar costs and the federal tax credit history for larger homes.

Putting the money picture together

For a typical Oregon homeowner, the financial case looks like this. You don’t get depreciation, and you no longer get the federal residential credit, but you do get a real resale value bump that studies consistently confirm, an Oregon property tax exemption that shields that added value, and ongoing savings through net metering and avoided utility bills. Couple that value with a local contractor with low overhead, and your return on investment is nearly the same as it was with the residential federal tax credit. That’s a solid long-term picture even without the write-offs.

For a business owner with a qualifying property, the toolkit is richer and genuinely worth a serious conversation with your accountant, because depreciation and the commercial credit can dramatically improve the economics. The key is that the system has to truly be a business asset, not just personal solar owned by someone who happens to have a business.

The bottom line

Solar won’t raise your property taxes in Oregon, it will very likely raise your home’s resale value, and depreciation is a real benefit but one reserved for business-use systems rather than your personal residence. If you’re a business owner, the combination of commercial credits and depreciation is worth exploring carefully with a tax professional. If you’re a homeowner, the value and tax-exemption story is already working in your favor.

Because every property and tax situation is different, and because I’m a solar expert rather than your accountant, treat this as a guide rather than specifc directions, and confirm the details with a qualified tax advisor. What I can tell you precisely is what a system would cost and produce for your property. If you’d like those real numbers as part of your planning, book a free on-site assessment and we’ll put honest figures in front of you. No pressure, just straight answers from a local licensed expert.