Solar (and Wind) Energy System Credit (SB17x2 Tax Credit)

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 allows a nonrefundable tax credit for certain approved photovoltaic and wind-driven solar energy systems. The tax credit is known as the Solar Energy System Credit, and can be used by taxpayers against their net tax in an amount equal to the lesser of 15% of the cost paid for the purchase and installation of a solar energy system after deducting the value of any municipal, state, or federal sponsored financial incentives, or $4.50 per rated watt of the solar and wind energy system. 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 will certify eligible systems using a simple, "self-certification" process. This process utilizes the Solar and 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 "Solar Energy System Credit".

Please ask your sales representative for further details regarding this exciting piece of legislation.