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 (Energy Commission). The solar or wind system must be certified by the Energy 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 Californiaâ€™s net metering law, if eligible. California Franchise Tax Board 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 forms are available on the Energy Commission's Website, which may be accessed by clicking on the Website listed above.
|Incentive Type:||Personal Tax Credit|
|Administrator:||California Franchise Tax Board|
|Eligible Renewable/Other Technologies:||Solar Photovoltaics,Wind (All),Wind (Small)|
|Incentive Amount:||7.5% of net system cost, 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 California Energy Commission-certified; must carry a minimum 5-year warranty.|
|Carryover Provisions:||Excess credit may be carried forward seven years.|
|Name:||California Revenue & Taxation Code Â§ 17053.84|
|Name:||Tax Specialist - FTB|
|Organization:||California Franchise Tax Board|
PO Box 942840
Sacramento CA 94240-0040
|Name:||Information Specialist - CEC|
|Organization:||California Energy Commission|
1516 Ninth Street, MS-45
Sacramento CA 95814
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.
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