The proposal is part of the governor's proposed job package, which he says will result in up to 100,000 new or retained jobs throughout the state.
According to the governor's office, California is home to 10,209 clean technology companies that could benefit from the sales tax exemption.
The exemption would also help the state retain its competitive edge in green technology by giving manufacturers incentive to remain in the state and expand their businesses here rather than moving to other states that already offer the tax exemption, Schwarzenegger said.
California is currently one of only three states that charges sales tax on green technology manufacturing equipment, he said.
"What is good for the environment is good for the economy," Schwarzenegger said.
Victoria Bradshaw, secretary of the state's Labor and Workforce Development Agency, said businesses like SunPower are going to help pull the state out of the recession. Even as jobs throughout the state declined in 2007 and 2008, green technology jobs grew by 5 percent, Bradshaw said.
"We've got to get people back to work. We've got to stimulate the economy," Schwarzenegger said.
Richmond Mayor Gayle McLaughlin, who also attended the news conference, said green businesses were helping to transform Richmond economically and environmentally. The city is home to between 30 and 40 green businesses and her goal is to make sure those businesses stay in Richmond and employ Richmond residents.
SunPower has factories in Richmond, San Jose, Irvine and New Jersey. The company manufactures high-performing residential, commercial and utility-scale solar panels.