The Texas Legislature has proposed a significant update to the appraisal methodology for solar energy property that could drastically affect how these assets are valued for property tax purposes. Senate Bill 419, effective January 1, 2026, introduces new guidelines that extend the useful life used in appraisal calculations from 10 years to no less than 35 years.
This proposed change impacts valuations performed under the cost method, requiring appraisers to incorporate generally accepted cost data and make adjustments for physical, functional, or economic obsolescence. By increasing the depreciation period to 35 years, property owners could see substantially higher taxable valuations, leading to increased tax burdens.
The extended depreciation timeline represents a major shift in the taxation landscape, potentially challenging the financial feasibility of solar projects. If you own or operate solar energy projects or assets in Texas, now is the time to evaluate the potential effects of this proposed bill and prepare for the 2026 tax year.
Stay informed and protect your investments. Contact KE Andrews (LINK) for guidance on navigating these changes and securing favorable tax outcomes for your solar projects.
