Sales and Use Tax Exemption for Electric Power Generation and Storage Equipment
Administered by: California Department of Tax and Fee Administration
Quick Summary
California offers a sales tax exemption on equipment for renewable energy generation and storage systems (solar, wind, geothermal, fuel cells, and other technologies) if you meet the business eligibility requirements—meaning you must be primarily engaged in power generation, distribution, or certain agricultural activities. To claim the exemption, you purchase qualified equipment and special-purpose buildings or foundations used for power generation and storage, paying no state sales or use tax on those purchases.
AI-generated summary • Updated 7/12/2026
Program Details
- Program ID
- 22048
- Effective Date
- 1/1/2018
- Expiration Date
- 7/1/2030
- Last Updated
- 3/21/2025
Eligibility
Program Summary
AB 1817 of 2018 created an exemption from the sales and use tax for "qualified tangible personal property purchased for use by a qualified person to be used primarily in the generation or production, or storage and distribution, of electric power." The exemption also applies to contractors who purchase the equipment in the service of a contract with a qualified person. "Qualified person" is defined in the statutes. The exemption does not apply to the generation or production of electricity from nuclear energy, large hydro, or fossil fuels, except when used in cogeneration. However, the exemption does apply to the storage and distribution of electric power from any source. The exemption also applies to "special purpose buildings and foundations used as an integral part of the generation or production or storage and distribution of electric power."
Contact & Resources
Please verify current program details with the administering agency before making any financial decisions.