California's 25-year property tax exclusion for rooftop solar is entering uncharted territory. The exclusion — which prevents a new solar installation from triggering a Prop 13 reassessment — is scheduled to sunset on January 1, 2027, per the California State Board of Equalization. Two pieces of legislation are shaping what happens next: SB 710, signed into law in October 2025, and AB 2389, which is currently working its way through the Assembly. Understanding the difference between them matters if you are a homeowner in Los Angeles, Orange, or Ventura County who is weighing whether to go solar this year or next.
The short version: SB 710 locked in permanent protection for everyone who already has solar or installs before the deadline. AB 2389 is the legislation that would extend that same benefit to homeowners who install after 2026. As of May 2026, AB 2389 has not yet passed — and the window to qualify under current law is narrower than most homeowners realize.
What SB 710 did in October 2025 — a grandfather clause, not a full extension
SB 710 was authored by Senator Catherine Blakespear (D-Encinitas) and signed by Governor Newsom on October 6, 2025, after passing the Senate 39-0. The bill amended Revenue and Taxation Code Section 73. What it does is specific and important to understand precisely: it permanently protects solar owners who qualify for the exclusion before January 1, 2027.
The enacted bill text states: "Active solar energy systems that qualify for an exclusion prior to January 1, 2027, shall continue to be excluded on and after January 1, 2027, until there is a subsequent change in ownership." In plain terms, if your system is in place and qualifying before the deadline, your Prop 13 assessed value is locked — the exclusion travels with your home until you sell it. You will not face a retroactive reassessment when the broader statute sunsets.
Who SB 710 covers — and who it deliberately leaves out
SB 710 covers residential panels and battery storage, and non-residential systems where the solar energy is consumed on-site. It explicitly does not cover utility-scale solar farms. Per the senator's office, "the bill does not continue the current tax exclusion for utility-scale solar farms and requires the solar energy from non-residential systems to be consumed on-site in order to qualify." The focus was on distributed rooftop solar — the 2+ million California roofs that have relied on this benefit since the exclusion was first established in 1999.
Senator Blakespear's stated rationale for the bill captures the core intent: "Californians who buy and install solar panels because of a current property tax exemption should continue to receive it. SB 710 prevents the rug from being pulled out from under Californians who are counting on this tax break for their solar projects to pencil out."
"SB 710 prevents the rug from being pulled out from under Californians who are counting on this tax break for their solar projects to pencil out." — Senator Catherine Blakespear, October 2025
What SB 710 does not do is extend the exclusion to any homeowner who installs solar on or after January 1, 2027. That gap is significant, and it is exactly what AB 2389 is attempting to address.
The gap SB 710 left open — and a soft deadline you may not know about
Here is the part of this story that is easy to miss. Under current law, a homeowner who gets solar installed on January 2, 2027 — one day after the deadline — has no property tax exclusion. Installing solar would constitute "new construction" under California property tax law and would trigger a reassessment that adds the value of the panels to the home's taxable base. That is the cliff that AB 2389 would prevent.
The "construction in progress" rule creates a planning deadline in late 2026
There is a timing mechanic under California property tax law that makes the effective deadline earlier than January 1, 2027. California property taxes use an annual lien date of January 1. Per legal guidance from Cox Castle analyzing Board of Equalization Letter to Assessors 2024/031, a solar system that begins construction after January 1, 2026 but is not fully completed before January 1, 2027 cannot receive an assessment date that falls within the exclusion window.
What this means practically: if you want to guarantee the property tax exclusion under current law, your system needs to be completed — not just permitted or started — before January 1, 2027. Given that a typical residential solar installation in Los Angeles County takes 10 to 16 weeks from signed contract to final inspection, homeowners who want to lock in the benefit should be targeting a contract signing by late summer or early fall 2026 at the latest. If AB 2389 passes, this urgency resolves for smaller systems. If it does not pass, the late-2026 planning window is the last safe on-ramp.
For a full breakdown of the sunset situation and what it means financially, see our post on California's solar property tax exclusion sunset and what it means for SoCal homeowners.
AB 2389 in 2026: the legislative push to extend through 2031
AB 2389 was introduced on February 20, 2026 by Assemblymember Jacqui Irwin, with Senator Blakespear as a coauthor — the same senator who authored SB 710. The bill would extend the new-construction property tax exclusion for customer-sited active solar energy systems through January 1, 2031.
The current version of the bill (as amended April 29, 2026) applies to systems of 10 kilowatts or less. That threshold covers the overwhelming majority of residential rooftop installations in California. A standard single-family home in Southern California typically carries a 5 to 10 kW system, sized to offset annual electricity usage. AB 2389 also covers customer-sited systems on public entity properties.
Where AB 2389 stands as of mid-May 2026
The bill's legislative timeline to date:
February 20, 2026: Introduced in the Assembly.
March 9, 2026: Referred to Assembly Revenue and Taxation Committee.
April 28, 2026: Revenue and Taxation Committee passed it 7-0, recommending passage as amended.
April 29, 2026: System size cap amended from an earlier threshold to the current ≤10 kW limit.
April 30, 2026: Re-referred to Assembly Appropriations Committee.
May 13–14, 2026: Referred to Appropriations suspense file; held under submission as of May 14, 2026 per the leginfo bill history.
"Held under submission" in the Appropriations suspense file is a standard procedural holding for bills with a revenue or fiscal impact — it means the bill's cost to state tax revenues is under evaluation, not that it has been defeated. The 7-0 Revenue and Taxation Committee vote and the involvement of SB 710's author as a coauthor are both meaningful indicators of legislative support. The bill must still pass the full Assembly, clear the Senate, and be signed by the Governor to become law.
Industry positions on AB 2389
The California Solar and Storage Association (CALSSA) and the Solar Rights Alliance are both publicly supporting passage of AB 2389. CALSSA Policy Director Brad Heavner has stated: "We should not be taxing the sun with any form of taxes." The Solar Rights Alliance has framed the potential post-2026 assessments as a "Solar Property Tax" and calls AB 2389 an urgent priority for the 2026 legislative session. These are advocacy positions from industry groups with a clear interest in the bill's outcome — we report them as context, not endorsements.
A 7-0 Revenue and Taxation Committee vote and a coauthor who wrote SB 710 are meaningful legislative signals — but "held under submission" in Appropriations means the outcome is not yet decided.
What this means for SoCal homeowners considering solar in 2026
The practical situation as of late May 2026 comes down to two scenarios: AB 2389 passes, or it does not.
If AB 2389 passes: The exclusion is extended through January 1, 2031 for residential-scale systems (≤10 kW). The urgency of the late-2026 completion deadline resolves, and homeowners can plan installations without the property tax clock as a pressure factor through 2030.
If AB 2389 does not pass: The SB 710 grandfather clause protects anyone who completes installation before January 1, 2027. Anyone who installs after that date faces a property tax reassessment on the added value of their panels. The completion-before-January-1-2027 deadline becomes the operative cutoff under current law.
A few things to think through before you sign a contract:
Timeline awareness. From signed contract to final inspection, a residential solar system in LA County typically takes 10 to 16 weeks. If you want a completion-before-January-1-2027 guarantee under current law, the planning window tightens in the second half of 2026.
System sizing. AB 2389's current version covers systems of ≤10 kW. Most Southern California residential systems fall under that threshold, but verify your sizing before assuming you qualify.
Other local incentives remain active. Local utility programs are separate from the state property tax exclusion. See our post on Pasadena Water and Power's solar and battery rebate program for one example of what is still available in LA County regardless of what happens in Sacramento.
Start with a consultation. Whether or not AB 2389 passes, understanding your specific system size, timeline, and utility rules is the right first step. Visit our solar consultation page to see how we approach it.
What this means for you
California's solar property tax exclusion has been a consistent part of the financial case for rooftop solar for 25 years. SB 710 locked in that protection for everyone who acts before the deadline — permanently, until a future property sale. AB 2389 would extend it for new installs through 2031. As of late May 2026, that bill has cleared a 7-0 committee vote and is awaiting action in Appropriations. The outcome is not certain, and the late-2026 completion deadline under current law is real.
If you are a homeowner in Los Angeles, Orange, or Ventura County weighing solar in 2026, we can help you understand exactly where the timelines and incentives land for your specific address, utility, and system size. Schedule a free solar consultation with Anca Solar — we have been installing solar across SoCal for over 25 years, and we know how to read these programs accurately. (CSLB License #873768.) You can also learn more about solar panel installation in Los Angeles or our company and how we work.
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