Arizona Solar Rebates and Incentives
Energy incentive programs in Arizona offer a number of public service rebates and tax incentives, including personal, property, and sales tax credits. Depending on the credit in question, consumers who upgrade efficiency in their homes can make or save up to thousands of dollars.
Tax credits and rebates are available to property owners who upgrade or maintain renewable energy sources. Arizona’s Energy Equipment Property Tax Exemption mandates that any solar energy-generating device is considered by the state, for property tax assessment, to add no value to a property, while purchases of both solar and wind-energy-generating equipment are exempted from sales tax.
Many utilities in Arizona also offer rebate or payback programs to customers who install solar- or wind-power-generating equipment on their property. In most cases, the utility will calculate how much power your equipment is expected to generate over 20 years (in kilowatt hours), and then reimburse a chunk of the cost of buying and installing the equipment based on that figure. Reimbursement funds are reserved, so check with your power company beforehand.
Solar Rebate and Incentive Programs
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Income Tax Subtraction for Energy Efficient Residencies
Program Type Personal income-tax deduction Technologies Energy-efficient properties Amount $5,000 Required Documentation Qualifying energy rating from a certified home energy rater Official Web Site http://www.azcommerce.com/Energy/Energy-Related+Incentives.htm Anybody who sells a qualifying energy efficient home in Arizona can get a personal income tax deduction for 5 percent of the selling price of the home, up to $5,000, in the year the home is sold. What “qualifying” means is that the residence must be rated at least a score of 90 points on a home energy rating. A rating of 90 points, by the way, indicates that the residence is at least 50 percent more energy efficient than the 1995 Model Energy Code.
It’s pretty complicated to figure out, but homeowners probably don’t need to worry about it, since the certification needs to be done by a certified home energy rater.
If the home you’re selling is given a score of 90 points or more by the home energy rater, file a deduction with your state income taxes of 5 percent of the selling price (no more than $5,000), keeping in mind that the definition of “selling price” excludes fees, taxes, or any other costs beyond the actual sticker price.
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Arizona Public Utilities Renewable Power Purchase Programs
Program Type Utility rebate Technologies Solar power equipment, photovoltaics, landfill gas, wind energy equipment, biomass, geothermal, combined heat and power systems, anaerobic waste management, small hydroelectric, all distributed generation equipment. Amount For residential customers, from $1.95 to $3 per watt DC Required Documentation Forms as required by your utility company Official Web Sites http://www.srpnet.com/environment/earthwise/solar/
http://www.aps.com/main/green/choice/choice_23.html?source=hme
For customers with renewable energy-generating equipment on their properties, many Arizona utilities will basically buy back any energy the equipment generates beyond what the property uses at a rate of about $1.95 to $3 per watt. How much they pay exactly depends on the company and a few different factors, calculated by expected performance. Generally, these companies pay out a lump-sum reimbursement of the cost of purchasing and installing the equipment. Most funds available for these programs are reserved—which means they’re limited. Contact your service provider before installation to find out if funds are available.
Unisource Energy Services’ Renewable Energy Credit Purchase Program will reimburse customers for the cost of purchasing and installing photovoltaic equipment, for example, at a rate of $3 per watt DC for expected performance, up to 60 percent of the cost. This is an upfront incentive, which means UES provides you with a lump sum based on a projection of how much energy your equipment will generate over 20 years and then retains the rights to that energy for those 20 years—they require the equipment to have a 20-year warranty, by the way. To apply, you can access UES’s application on its official website.
Arizona utility SRP offers and incentive program that works basically the same way as that of UES, with SRP customers reimbursed at a rate of $2.15 per watt DC of projected energy output over a period of 20 years, with a maximum payment of $10,750. SRP customers can find application information on its website.
Arizona Public Service offers a similar incentive, with a reimbursement of up to 50 percent of the cost (at a limit of $75,000 total) of equipment and installation. Customers can also choose just to sell the renewable energy their equipment generates back to APS at a rate of $1.95 DC with no limit for residential customers. In addition, APS offers upfront incentives for solar water heating equipment, up to 50 percent of the cost.
All three utilities also offer non-customers (“off-grid”) the opportunity to sell renewable power to the power company at varying rates. Application information for non-customers is available on company websites.
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Solar and Wind Sales Tax Exemption
Program Type Sales tax exemption Technologies Solar and wind energy equipment, photovoltaics. Amount All sales tax on the equipment Required Documentation None Official Web Site http://www.azsolarcenter.org/economics/tax-breaks/state-tax-statutes/solar-devices-tax-exemption.html When Arizona consumers buy solar- or wind-power-generating equipment, they don’t pay sales taxes on it. This exemption, coupled with Arizona’s solar and wind equipment property tax exemption, means consumers don’t pay any taxes on such equipment. Add that to the various tax credits offered to purchasers of solar and wind devices, and you’ve got some compelling reasons to go for it. Consumers should note, though, that although state sales tax (which makes up the bulk of the tax amount) is exempted, any city sales tax may not be.
Again, there’s no maximum on this. If consumers buy the equipment, there’s no sales tax—simple as that.
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Energy Equipment Property Tax Exemption
Program Type Property tax exemption Technologies Solar power equipment, photovoltaics, landfill gas, wind energy equipment, biomass, geothermal, combined heat and power systems, anaerobic waste management, small hydroelectric Amount Exempts any increased value of the property due to installation of energy equipment Required Documentation Documentation of purchase and installation of equipment Official Web Site http://www.revenue.state.az.us/ For tax assessment purposes, the state of Arizona does not consider energy-generating devices to add any value to a piece of property—which means consumers don’t get taxed on the added property value.
Both “active” and “passive” systems can qualify. If the system in question generates some form of renewable power—photovoltaic systems or wind turbines, for example—it’s active, and it definitely qualifies. Passive systems, like solar water heaters or solar daylighting systems, can qualify as well, as long as it’s clear that the system in question is specifically designed to fill an existing power need.
The statute (HB-2429, expanded by HB-2332 in 2009) defines “energy equipment” as systems that harness “energy … from renewable resources.” In addition to such equipment, the state specifies that “energy efficient building components” can qualify as well. To make the cut, such components (appliances or building materials) must meet or exceed the efficiency requirements of the Environmental Protection Agency’s Energy Star Program, or exceed by 15 percent the energy efficiency requirements of the building code in place when and where the building permit is issued.
To qualify for the exemption, property owners need to provide their county assessor with documentation of the purchase and installation of the equipment within six months. There’s no limit on this exemption—consumers can install as much qualifying equipment as they want, property tax-free.
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Residential Solar and Wind Energy Systems Tax Credit
Program Type Personal tax credit Technologies Solar-powered systems, photovoltaics, wind energy Amount $1,000 maximum credit Required Documentation Receipt of cost Official Web Site http://www.azdor.gov/Portals/0/Brochure/543.pdf Basically, if consumers install wind or solar power equipment on their property, Arizona will give them a personal tax credit for 25 percent of the cost of the equipment and installation, up to $1,000. If the amount of the credit is more than the person’s tax obligation for that year, the excess amount can be carried for up to five years in subsequent returns.
Qualifying equipment can range from devices that generate renewable power, like photovoltaics (essentially solar panels) or wind turbines, to systems that just harness the energy to fill an existing power need—also called “passive” systems—like solar water heaters. However, such passive systems must meet certain requirements. The basic guideline is that it must be “clearly designed as a solar energy device.” So, for example, a solar daylighting system, which redirects natural light to maximize its use, can qualify; a skylight, however, cannot.
Any property owner who installs qualifying equipment on their property can get the credit. The state does require that you obtain a certificate from the seller of the equipment stating that the equipment complies with Arizona’s solar energy equipment requirements—and when applying for the tax credit itself, be prepared to fill out extensive forms. You can find more information on how to qualify for the credit here.
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Arizona Solar Power Financial Incentives
Financial Incentives
Corporate Tax Credit
Green Building Incentive
- Chandler - Expedited Plan Review and Certification Fee Reimbursement for Green Buildings
- Scottsdale - Green Building Incentives
- Town of Buckeye - Green Building Incentive
- Tucson - Permit Fee Credit for Solar Energy Systems
Personal Deduction
Personal Tax Credit
- Non-Residential Solar & Wind Tax Credit (Personal)
- Residential Solar and Wind Energy Systems Tax Credit
Property Tax Assessment
Property Tax Exemption
Sales Tax Exemption
Utility Loan Program
- APS - GEOSmart Financing Program
- Sulphur Springs Valley EC - Member Loan Program
- Sulphur Springs Valley EC - SunWatts Loan Program
Utility Rebate Program
- APS - Energy Efficiency Solutions for Business
- APS - Energy Efficient AC Rebate Program
- APS - Renewable Incentive Program
- SRP - EarthWise Solar Energy
- SRP - PowerWise Business Solutions Energy Efficiency Rebate Program
- Sulphur Springs Valley EC - Residential Energy Efficiency Rebate
- Sulphur Springs Valley EC - SunWatts Rebate Program
- TEP - Commerical Energy Efficiency Rebate Program
- TEP - Renewable Energy Credit Purchase Program
- TEP - Residential Energy Efficiency Rebate Program
- Trico Electric Cooperative - SunWatts Incentive Program
- UES - Commercial Energy Efficiency Rebate Program
- UES - Energy Smart Homes Program
- UES - Renewable Energy Credit Purchase Program
- UES - Residential Heating and Cooling Rebate Program
Rules, Regulations & Policies
Appliance/Equipment Efficiency Standards
Building Energy Code
Contractor Licensing
Energy Standards for Public Buildings
- Chandler - Green Building Requirement for City Buildings
- Renewable Energy and Green Building Standards in New State Buildings
- Scottsdale - Green Building Policy for Public Buildings
- Solar Design Standards for State Buildings
Equipment Certification
Green Power Purchasing/Aggregation
Interconnection
Line Extension Analysis
Net Metering
Renewables Portfolio Standard
Solar Access Law/Guideline
Solar/Wind Permitting Standards
- Maricopa Assn. Of Governments - PV and Solar Domestic Water Heating Permitting Standards
- Solar Construction Permitting Standards
Related Programs & Initiatives
Alternative Fuels and Advanced Vehicles Data Center
The U.S. Department of Energy's Alternative Fuels and Advanced Vehicles Data Center (AFDC) provides a wide range of information and resources to enable the use of alternative fuels and other petroleum-reduction options, such as advanced vehicles, fuel blends, idle reduction and fuel economy. The AFDC site offers a database of state and federal laws and incentives related to alternative fuels and vehicles, air quality, fuel efficiency, and other transportation-related topics.
The U.S. Department of Energy's Green Power Network provides news and information on green power markets and activities, including opportunities to buy green power. This site provides state-by-state information on green power marketing and utility green power programs. In addition, the site lists marketers of renewable energy credits (RECs), also known as green tags or renewable energy certificates, which represent the environmental attributes of the power produced from renewable energy projects.
Weatherization Assistance Program
The U.S. Department of Energy's Weatherization Assistance Program (WAP) enables low-income families to reduce their energy bills by making their homes more energy-efficient. Through this program, weatherization service providers install energy-efficiency measures in the homes of qualifying homeowners free of charge. The WAP program web site offers a state-by-state map of opportunities, projects and activities.
The U.S. Department of Energy's Wind Powering America site provides state-by-state information on wind projects and activities, including wind working groups, validated wind maps, anemometer loan programs, small wind guides, state-specific news, wind for schools, workshops and web casts.
