Section 38H. (a) In determining the net income subject to tax under this chapter a business corporation, at its election, may deduct the expenditures paid or incurred during the taxable year with respect to the installation of any solar or wind powered climatic control unit and any solar or wind powered water heating unit or any other type unit or system powered thereby including the cost of labor attendant to the installation thereof and the conversion of any climatic control unit or any water heating unit, or other unit, to solar or wind power including the cost of labor attendant to the conversion thereof; provided, however, that such unit or system has a situs in the commonwealth and is used exclusively in the trade or business of such corporation.
(b) Such deduction shall be allowed only—
(1) on condition that the net income for the taxable year and all succeeding taxable years be computed without any exemption, credit or deduction for such expenditures or for depreciation of the property other than the deductions allowed by this section, and
(2) with respect to a solar or wind powered climate control unit and any solar or wind powered water heating unit or any other type unit or system powered thereby for which the manufacturer’s british thermal unit impact statement has been submitted to the director of the bureau of building construction and which have been certified by said director as complying with applicable provisions of regulations and standards issued by him pursuant to law.
(c) No deduction shall be allowed under the provisions of this section for the cost of purchase, installation, operation or maintenance of any other climate control unit, any water heating unit or other unit used ancillary to any solar or wind powered unit.
(d) If expenditures with respect to any solar or wind powered climate control unit and any solar or wind powered water heating unit or any other type unit or system powered thereby have been deducted as provided herein and if within ten years from the end of the taxable year in which such deduction was allowed such unit or system or any part thereof is used other than exclusively in the corporation’s trade or business, the corporation shall report such change of use in its return for the first taxable year during which it occurs, and the commissioner may recompute the tax for the year or years for which such deduction was allowed and may assess any additional tax resulting from such recomputation within the period of assessment applicable to such return.
(e) In any taxable year when property is sold or otherwise disposed of, with respect to which a deduction has been allowed pursuant to this section, such deduction shall be disregarded in computing gain or loss, and the gain or loss on the sale or other disposition of such property shall be the gain or loss resulting if the deduction provided by this section had not been elected and the cost or other basis of the solar or wind powered climate control unit and any solar or wind powered water heating unit or any other type unit or system powered thereby had been reduced by straight-line depreciation based on the useful life of such unit or system; provided, however, that if such sale or other disposition of such unit or system occurs within three years of the date such unit or system is placed in service the basis shall be zero.
(f) A solar or wind powered climate control unit and any solar or wind powered water heating unit or any other type unit or system powered thereby which qualifies for the deduction provided for by this section shall not be subject to taxation under the tangible property measure of the excise imposed by subclause (i) of clause (1) of subparagraph (a) of the fourth paragraph of section 39.