Consumer Energy Center Renewable Energy

tax credit graphic For taxable years beginning on or after January 1, 2001, and before January 1, 2006, the California Personal Income Tax Law and the Corporation Tax Law allow a nonrefundable tax credit for certain approved solar or wind energy systems. The tax credit, known as the Solar or Wind Energy System Credit, can be used by taxpayers against their net tax in an amount equal to the lesser of 7.5 percent of the cost paid for the purchase and installation of a solar or wind energy system after deducting the value of any municipal, state, or federal sponsored financial incentives, or $4.50 per rated watt of the solar or wind energy system. For taxable years beginning on or after January 1, 2004, and before January 1, 2006, the credit percentage changed to 7.5 percent. The California Franchise Tax Board ("FTB") is charged with administering the tax credit in consultation with the California Energy Commission("Commission"). To qualify for the tax credit, solar and wind energy systems must satisfy a number of requirements as specified in the law. In addition, the law requires solar and wind energy systems to be certified by the Commission.

The Commission certifies eligible systems for this tax credit using a simple "self-certification" process. This process utilizes the Solar or Wind Energy System Credit Worksheet and lists of approved equipment, which taxpayers can use to determine on their own whether their systems are certified and eligible for a tax credit. The worksheet and equipment lists were developed in conjunction with the Franchise Tax Board and are intended to be used with the official tax form FTB 3508, titled "Solar or Wind Energy System Credit."

Further information is provided in FTB Form 3508, the Solar or Wind Energy System Credit Worksheet, which lists approved system components for the Solar or Wind Energy System Credit as well as sample calculations. Each of these documents may be located by clicking on the relevant link below:

For further information regarding FTB Form 3508 or other tax-related questions, please call the Franchise Tax Board at 800-852-5711. For questions regarding the worksheet or system certification, please call the Commission at 800-555-7794 (toll free in California).

California Franchise Tax Board
P.O. Box 942840
Sacramento, CA 94240-0040
Within the United States (800) 852-5711.
Outside of the United States
(916) 845-6500.
www.ftb.ca.gov/

California Energy Commission
1516 Ninth Street, MS-45
Sacramento, CA 95814
Within California (800) 555-7794.
Outside of California (916) 654-4058
Fax: (916) 653-2543.
Email: renewable@energy.state.ca.us
www.consumerenergycenter.org