Solar or Wind Energy System Credit - Corporate

January 03, 2006


California's Solar or Wind Energy System Credit (SB17x2) was approved by the Governor on October 8, 2001. The law provides personal and corporate income tax credits for the purchase and installation of photovoltaic or wind driven systems with a peak generating capacity of up to 200 kilowatts. After January 1, 2004 and before January 1, 2006, the tax credit is equal to 7.5% of the net installed system cost after deducting the value of any municipal, state, or federal sponsored financial incentives, or $4.50 per watt of rated peak generating capacity, whichever is less. A 15% tax credit was available Jan 1, 2001 - Dec 31, 2003. The California Franchise Tax Board (FTB) administers the program in consultation with the California Energy Commission (Commission). The solar or wind system must be certified by the Commission. A five-year warranty is required of each system. Taxpayers claiming the credit cannot sell the electricity produced by the system, but may utilize California’s net metering law, if eligible. California form FTB 3508 must be completed and attached to your California tax return. The Solar or Wind Energy System Credit Worksheet can be used to determine the tax credit amount. These form are available on the Commission's Website, which may be accessed by clicking on the Website listed above.

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: California
Incentive Type: Corporate Tax Credit
Web Site:
Administrator: California Franchise Tax Board
Start Date: 1/1/01
Eligible Renewable/Other Technologies:
  • Solar Photovoltaics
  • Wind (All)
  • Wind (Small)
Incentive Amount: 7.5%, or $4.50/W of rated peak generating capacity, whichever is less
Maximum Incentive: Not specified
Eligible System Size: Maximum system size of 200 kW peak generating capacity
Equipment Requirements: Systems must be grid-connected; equipment must be new and in compliance with all applicable performance and safety standards and be CEC-certified; must carry a minimum 5-year warranty.
Carryover Provisions: Excess Credit may be carried forward seven years.


Name: California Revenue & Taxation Code § 23684
Date Enacted: 10/8/01
Effective Date: 1/1/01
Expiration Date: 1/1/06


Name: Tax Specialist - FTB
Organization: California Franchise Tax Board
Address: PO Box 942840
Sacramento CA 94240-0040
Phone: (800) 852-5711
Name: Information Specialist - CEC
Organization: California Energy Commission
Address: 1516 Ninth Street, MS-45
Sacramento CA 95814
Phone: (800) 555-7794

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.