Tax Deduction for Interest on Loans for Energy Efficiency (California)

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Last modified on February 12, 2015.

Financial Incentive Program

Place California

Name Tax Deduction for Interest on Loans for Energy Efficiency
Incentive Type Personal Deduction
Applicable Sector Residential
Eligible Technologies Lighting, Chillers, Furnaces, Boilers, Heat pumps, Central Air conditioners, Caulking/Weather-stripping, Duct/Air sealing, Building Insulation, Windows, Custom/Others pending approval, Solar Water Heat, Solar Space Heat, Photovoltaics, Daylighting, Advanced metering
Active Incentive No

Implementing Sector State/Territory
Energy Category Renewable Energy Incentive Programs, Energy Efficiency Incentive Programs
Amount 100% of interest from loan

Start Date 2001-10-01

Program Administrator California Franchise Tax Board

Date added to DSIRE 2001-12-06
Last DSIRE Review 2007-08-03

References DSIRE[1]


This personal tax deduction allows taxpayers to deduct the interest paid on loans used to purchase energy efficient products or equipment for a residence in California. The deduction is for loans from a publicly-owned utility company for the purchase of energy-efficient heating, ventilation, air-conditioning, lighting, solar, advanced metering of energy usage, windows, insulation, zone heating products, and weatherization systems. Customers of publicly-owned utility companies that do not offer customer financing may be able to deduct the interest from a home equity or home improvement loan used to purchase energy efficient products and equipment.

Publicly-owned utility companies must issue a federal income tax Form 1098, or similar form, to notify their customers of their eligibility for this deduction. Furthermore, this deduction may not be taken if a tax credit is taken for the purchase of the energy efficient equipment. Contact the IRS for more information.

Authorities (Please contact the if there are any file problems.)

Authority 1: CA Revenue and Taxation Code § 17208.1
Date Effective 2001-10-01
Date Enacted 2001-10-01

Incentive Contact

Contact Name Tax Specialist - FTB
Department California Franchise Tax Board

Address PO Box 942840

Place Sacramento, California
Zip/Postal Code 94240-0040
Phone (800) 852-5711
Phone 2 (916) 845-6500

Contact Name Information Specialist - IRS
Department Internal Revenue Service

Address 1111 Constitution Avenue, N.W.

Place Washington, District of Columbia
Zip/Postal Code 20224
Phone (800) 829-1040


  • Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.[1]


  1. 1.0 1.1  "Database of State Incentives for Renewables and Efficiency (DSIRE)"