Arizona is probably the sunniest state in the U.S. and it’s firmly in the U.S.’s sunbelt, making it an ideal state for solar installations. As such some of the world’s largest solar farms are being built in the state’s borders. Some of which is being used to power its bigger neighbor, California, some used within the state. Arizona’s renewable portfolio standard, which mandates utilities are required to acquire 15 percent of their electricity from renewable resources by 2025. Of that, 30 percent must come from distributed generation like on homes and businesses. As such the state and utilities in the state have programs that offer incentives for solar on people’s homes and businesses. These include net-metering and rebates through utilities and other incentives from the state and from municipalities. Such incentives include personal, property and sales tax credits.
Tax credits and rebates are available to property owners who upgrade or maintain renewable energy sources. One such program is Arizona’s Energy Equipment Property Tax Exemption, under which renewable electric generation, including solar thermal electric, photovoltaics, landfill gas, wind and biomass is not considered by the state to add. In addition, solar and wind-energy-generating equipment are exempted from sales tax.
Under Arizona’s net-metering rules homeowners and variety of other entities including businesses and municipal entities, among others, renewable energy installations up to 125 percent of their energy usage can qualify for net-metering. Under the rules, net excess generation can carry forward over a year period until it’s reimbursed to the person or entity at the utility’s avoided-cost rate.
Many utilities in Arizona offer rebates or payback programs to customers who install solar- or wind-power-generating equipment on their property. Depending on the rebate program, the utility may reimburse the system based on how many kilowatt hours the system is anticipated to produce over a 20 year lifespan. The utility will use those calculations to determine what the rebate for a system is. However, reimbursement funds are limited, so its a good idea to check with both solar installers and local utilities to determine what current rebates are. Installers will also help home or business owners understand how much they can expect in incentives and rebates.
(Last updated October 2012)