Solar and CHP Sales Tax Exemption
Administered by Florida Department of Revenue
Florida exempts solar energy systems from state sales and use tax, so you don't pay sales tax on equipment such as solar water heaters, solar pool heaters, and solar electric (PV) systems. The exemption has been permanent since 2005, and it covers equipment and hardware used for collecting, transferring, converting, storing, or using solar energy. Check with the Florida Department of Revenue or your installer for how the exemption is applied at purchase.
Solar energy system equipment and requisite hardware you sell or install in Florida are exempt from sales and use tax, which lowers the upfront cost for residential, commercial, industrial, and agricultural customers. The exemption also covers machinery for producing electrical or steam energy from boiler fuels other than residual oil, if used primarily for manufacturing in Florida, with proration where both fuel types are burned. Green hydrogen equipment, hydrogen-derived ammonia converted back to hydrogen, and equipment for fuel cells using green hydrogen also qualify, so confirm documentation requirements with the Florida Department of Revenue.
This is a permanent Florida sales and use tax exemption, in effect since July 1, 1997, extended, and made permanent by H.B. 805 in May 2005. It covers solar thermal, solar PV, solar pool heating, qualifying combined heat and power, green hydrogen production and storage equipment, and fuel cells using green hydrogen, and it works as forgone tax revenue rather than a funded grant. It targets residential, commercial, industrial, and agricultural purchasers, with CHP equipment limited to fixed-location use primarily for manufacturing in Florida and prorated where residual fuel is also burned.
Program details
- Program ID
- 243
- Effective
- 7/1/1997
- Last updated
- 1/2/2026
Eligibility
- Sectors
- commercial industrial residential agricultural
- Technologies
- solar water heat solar space heat solar photovoltaics hydrogen combined heat & power solar pool heating fuel cells using renewable fuels
Program summary
Solar energy systems have been exempt from Florida's sales and use tax since July 1, 1997. The term "solar energy system" means the equipment and requisite hardware that provide and are used for collecting, transferring, converting, storing, or using incidental solar energy for water heating, space heating and cooling, or other applications that would otherwise require the use of a conventional source of energy such as petroleum products, natural gas, manufactured gas or electricity.
This exemption was originally set to expire on July 1, 2002, but it was extended for three more three years. In May 2005, the exemption was made permanent upon the enactment of H.B. 805.
In addition, the exemption applies to machinery and equipment used at a fixed location for the purpose of producing electrical or steam energy resulting from the burning of boiler fuels other than residual oil. However, such energy must be primarily used for manufacturing, processing, compounding, or producing for sale items of tangible personal property in Florida. In facilities where machinery and equipment are necessary to burn both residual and non-residual fuels, the exemption is prorated.
Furthermore, the purchase of machinery and equipment primarily used in the production, storage, transportation, compression, or blending of green hydrogen (as long as the machinery and equipment are used at a fixed location) is exempt. The exemption also applies to green hydrogen-derived ammonia, if the ammonia is converted back to green hydrogen before use or sale; and machinery and equipment necessary to produce electricity resulting from the electrochemical reaction of green hydrogen and oxygen in a fuel cell.
Contact & resources
- Contact email
- DORGTA@floridarevenue.com
Please verify current program details with the administering agency before making any financial decisions.
