Companies in Texas engaged solely in the business of manufacturing, selling, or installing solar or wind energy devices are exempt from the franchise tax. The franchise tax is Texas’s equivalent to a corporate tax. There is no ceiling on this exemption, so it can be a substantial incentive for solar and wind businesses.

For the purposes of this exemption, a solar energy device means "a system or series of mechanisms designed primarily to provide heating or cooling or to produce electrical or mechanical power by collecting and transferring solar-generated energy. The term includes a mechanical or chemical device that has

Texas allows a corporation to deduct the cost of a solar energy device from the franchise tax in one of two ways:

• The total cost of the system may be deducted from the company's taxable capital or,
• 10% of the system's cost may be deducted from the company's income.  

Both taxable capital and a company's income are taxed under the franchise tax, which is Texas's equivalent to a corporate tax. 

For the purposes of this deduction, a solar energy device means "a system or series of mechanisms designed primarily to provide heating or cooling or to produce electrical or mechanical

Enacted in August 1997, this personal income tax credit originally applied to expenditures on solar-electric (PV) equipment used on residential property. The credit, equal to 25% percent of the cost of equipment and installation, was expanded in August 2005 to include solar-thermal equipment. The solar-thermal provisions apply to taxable years beginning on and after January 1, 2006. The credit is capped at $3,750 for solar-energy systems placed in service before September 1, 2006, and capped at $5,000 for solar-energy systems placed in service on or after September 1, 2006.

In August 2012 the credit was amended yet again (A.B

The Ohio Air Quality Development Authority (OAQDA) provides assistance for new air quality projects in Ohio, for both small and large businesses. For qualifying projects, OAQDA can provide a 100 percent exemption from the tangible personal property tax (on property purchased as part of an air quality project), real property tax (on real property comprising an air quality project), a portion of the corporate franchise tax (under the net worth base calculation), sales and use tax (on the personal property purchased specifically for the air quality project only) as long as the bond or note issued by OAQDA is outstanding

Ohio may provide a sales and use tax exemption for certain tangible personal property used in energy conversion, solid waste energy conversion, or thermal efficiency improvement facilities designed, constructed, or installed after December 31, 1974. 

Qualifying energy conversion facilities are those that are used for the primary purpose of converting natural gas or fuel oil to an alternate fuel or power source excluding propane, butane, naphtha, fuel oil, or natural gas. Solid waste conversion facilities include those that convert solid or semi-solid waste from industrial operations including public utilities, commercial distribution, research, agricultural, and community operations, and including garbage, street

Note: On September 17, 2024, the Director of the Division of Property Valuation issued a guidance memo on the applicability of this exemption to battery energy storage systems (BESS), finding that the exemption does not apply to BESS attached to a renewable energy system, although standalone BESS may qualify for a commercial and industrial machinery exemption.

Kansas statute exempts renewable energy equipment from property taxes if an application for an exemption is filed for the property on or before December 31, 2016. For applications for exemptions filed after December 31, 2016, a property tax exemption is limited to the 10

NOTE: On October 2016, the PA Public Service Commission (PUC) issued a second final rulemaking order amending net metering and Alternative Energy Portfolio Standards (AEPS) regulations. Changes include clarifying provisions for meter aggregation, revisions to the interconnection rules and other minor amendments. The documents associated with the case can be accessed at Docket L-2014-2404361.

In 2006 the PA Public Utilities Commission (PUC) adopted net-metering rules and interconnection standards for net-metered systems and other forms of distributed generation (DG) pursuant to the Alternative Energy Portfolio Standards (AEPS) Act of 2004. In 2007, H.B. 1203 amended AEPS and expanded net metering. Revised

New Hampshire allows cities and towns to offer an exemption from local property taxes for the assessed value of a solar energy system, electrical energy storage system, wind energy system, or wood-fired central heating system used on the property. A solar energy system is defined as a photovoltaic (PV) system or a system that "utilizes solar energy to heat or cool the interior of a building or to heat water for use in a building" and that includes one or more collectors and a storage container. Stoves and fireplaces do not qualify.

Cities and towns may adopt an exemption provision

Iowa allows a sales tax exemption for solar, wind, and hydroelectricity equipment. As of August 2024, the Iowa sales tax rate is 6%.

Wind

For wind energy, the exemption includes the total cost of wind energy equipment and all materials used to manufacture, install, or construct wind energy systems. The exemption does not apply to equipment used to construct a plant to manufacture wind energy systems.

Solar

Effective July 1, 2006, solar energy equipment is also exempt from the state sales tax. Solar equipment means any equipment that is used to convert incident solar radiation to energy, or equipment used

Systems that generate energy using wind, hydropower, geothermal, and solar energy heating or cooling systems are exempt from property tax.* Systems using solar power devices—including solar thermal, photovoltaic (PV), and other solar energy—are exempt from property tax only if they were installed after December 31, 2011. 

For most eligible renewable energy systems, the assessed value of the system is exempt from property tax. One exception is solar energy heating or cooling systems which are exempt from property tax the amount equal to the out-of-pocket expenditures for the components and labor associated with the system. 

The property tax exemption is allowed