C.A. 4th;
E064882

The Fourth Appellate District affirmed a judgment. The court held that there was no error in a county's assessment of the value of real property improved with solar energy generating systems.

Between 1986 and 1991, Luz Solar Partners Ltd., III and related entities improved real property they owned by installing seven solar energy generating (SEG) systems. Each unit comprised both solar and nonsolar components. The solar components accounted for approximately 97 percent of the cost of installation; the nonsolar components, such boilers and furnaces, accounted for the remaining three percent. Until 2010, San Bernardino County, where the Luz properties were located, only county in the state with real property improved with SEG systems. The county accordingly developed its own procedure for assessing the properties so as to comply with Rev. & Tax. Code §73, which excludes newly constructed energy systems from the definition of “new construction,” so that such systems are not treated as improvements that add value. In 2009, the State Board of Equalization (SBE) issued guidelines instructing county assessors to include the solar component of the SEG system in an estimate of full cash value of the solar property. The county assessor's application of the SBE assessment methodology in 2011 and 2012 resulted in a dramatic increase in Luz Solar's property taxes. Upon challenge by Luz Solar, the county appeals board upheld the assessments.