Sales and Use Tax Exemption for Electric Power Generation and Storage Equipment

April 26, 2024


AB 1817 of 2018 created an exemption from the sales and use tax for "qualified tangible personal property purchased for use by a qualified person to be used primarily in the generation or production, or storage and distribution, of electric power." The exemption also applies to contractors who purchase the equipment in the service of a contract with a qualified person. "Qualified person" is defined in the statutes. 

The exemption does not apply to the generation or production of electricity from nuclear energy, large hydro, or fossil fuels, except when used in cogeneration. However, the exemption does apply to the storage and distribution of electric power from any source.  

The exemption also applies to "special purpose buildings and foundations used as an integral part of the generation or production or storage and distribution of electric power."

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: California
Incentive Type: Sales Tax Incentive
Web Site:
Administrator: California Department of Tax and Fee Administration
Start Date:
Eligible Renewable/Other Technologies:
  • Geothermal Electric
  • Solar Thermal Electric
  • Solar Photovoltaics
  • Wind (All)
  • Biomass
  • Combined Heat & Power
  • Fuel Cells using Non-Renewable Fuels
  • Landfill Gas
  • Hydroelectric (Small)
  • Anaerobic Digestion
  • Fuel Cells using Renewable Fuels
  • Lithium-ion
Incentive Amount: 100%


Name: Cal Rev & Tax Code § 6377.1
Date Enacted: 07/25/2017
Effective Date: 01/01/2018
Expiration Date: 07/01/2030


Name: Public Information Officer
Organization: California Department of Tax and Fee Administ
Phone: (800) 400-7115

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.