Renewable Energy Property Tax Exemption
Administered by Indiana Department of Local Government Finance
If you installed a qualifying renewable energy system (solar, wind, geothermal, or hydroelectric), you can exempt the system's assessed value from property taxes by filing Form 18865 with your county auditor. This exemption applies each year the system operates, though it expires entirely on January 1, 2027—and applies only to assessments dated before January 1, 2025. For solar heating/cooling systems specifically, the exemption covers your actual out-of-pocket costs for components and labor rather than the full assessed value.
You can help residential, commercial, agricultural, and multifamily customers reduce their property tax burden by installing eligible renewable systems (solar PV, solar thermal, wind, geothermal heat pumps, and others installed after December 31, 2011). Educate customers that they must file Form 18865 with their county auditor to claim the exemption, and note that the program expires January 1, 2027—systems generating energy for their own use are eligible, but public utilities and non-net-metered electricity retailers cannot claim it.
This property tax exemption, managed by the Department of Local Government Finance, exempts assessed value of renewable energy systems from taxation (or actual expenditures for solar thermal systems) across residential, commercial, industrial, and agricultural sectors. The program is legislatively sunset: it applies only to assessment dates before January 1, 2025, and terminates entirely January 1, 2027. County auditors process Form 18865 applications, with no annual reapplication required unless property ownership changes; applicants filing by January 15 see exemptions applied to the following year's tax bill.
Program details
- Program ID
- 54
- Effective
- 3/1/2010
- Expires
- 1/1/2027
- Last updated
- 9/4/2026
Eligibility
- Sectors
- commercial industrial residential agricultural multifamily residential
- Technologies
- solar water heat solar space heat geothermal electric solar thermal process heat solar photovoltaics wind (all) hydroelectric geothermal heat pumps solar pool heating wind (small) geothermal direct-use
Program summary
Note: S.B. 1 of 2025 amended this exemption to make it apply only to property taxes imposed for an assessment date before January 1, 2025. The exemption itself expires entirely on January 1, 2027.
Systems that generate energy using wind, hydropower, geothermal, and solar energy heating or cooling systems are exempt from property tax.* Systems using solar power devices—including solar thermal, photovoltaic (PV), and other solar energy—are exempt from property tax only if they were installed after December 31, 2011.
For most eligible renewable energy systems, the assessed value of the system is exempt from property tax. One exception is solar energy heating or cooling systems which are exempt from property tax the amount equal to the out-of-pocket expenditures for the components and labor associated with the system.
The property tax exemption is allowed every year that a qualifying system functions. The property tax exemption applies to both real property and mobile homes equipped with renewable energy systems and may only be claimed by property owners. Public utilities and other electricity retailers (excluding net metered customers) may not claim a property tax exemption for wind or solar power devices.
Claiming the Property Tax Incentive
Property owners that wish to claim this deduction must fill out Form 18865 and file it with the local county auditor. Questions about this incentive should be directed to the local auditor or assessor. Click here to find contact information for local officials. The Department of Local Government Finance outlines the incentive. Properties are still eligible if ownership changes.
* Solar energy heating or cooling systems include solar energy systems used for domestic hot water and space heating, including heating of swimming pools, as well as industrial pre-heating.
Contact & resources
- Contact email
- owqgeoth@idem.in.gov
- Additional resources
Please verify current program details with the administering agency before making any financial decisions.
