Cost > Arizona

Arizona is blessed with some of the highest insolation rates in the entire country, which is great news for residents looking to reap the benefits of solar power. As you'll see below, however, the state's solar rebates and tax credits don't quite stack up against those on offer by California, New Jersey and other national leaders in renewable energy legislation. 

To their credit, Arizona is taking other steps to exploit their abundance of sun. In 2006, the Arizona Corporation Commission amended the state’s renewable portfolio standard (RPS) to require that 15 percent of all electricity come from renewable sources. Of that, 30 percent is to come from distributed generation projects—like PV systems.

Furthermore, the state is home to some of the largest solar electric power plants in the country. In February, 2008, the state announced plans for a $1-billion solar-energy plant, which will be one of the largest of its kind in the world.

Read below to see how much money is available for owners of homes and/or businesses.

Arizona Solar Rebate Programs

Despite lagging a bit behind the leaders of the pack, Arizona lawmakers have in recent years been actively pursuing legislation that makes it more afforable to purchase solar energy systems, like solar PV panels.

Across the state, a number of different utility-sponsored programs offer rebate programs for residents and businesses interested in purchasing solar energy systems. In general, the programs take the form of a per watt rebate for PV systems. A solar water heat (SWH) system, in contrast, usually receives a payment for each kWh it's expected to save over the course of its first year of service. While the programs’ application and technical requirements vary a bit, ballpark figures are in the range of $2-3/Watt of DC power (PV) and $0.50 to $0.75 for each kilowatt-hour saved by a SWH system. 

Arizona Public Service (APS)

Through their Green Choice program, APS offers all of their residential and commercial customers a rebate for the purchase of a solar energy system. Here's an overview of what to expect:

Grid-tied residential PV systems can receive a rebate worth up to $3 per installed DC watt, capped at 50% of system costs. A residential solar water heat (SWH) system may get $0.75 for every kWh it's expected to save over the course of its first year, also capped at 50% of total installed costs.

Grid-tied commercial PV systems may receive a rebate of up to $2.50 per DC watt OR may qualify for something called a production-based incentive (PBI). If your company opts for the PBI, it will receive a rebate based on output (in kWh) rather than overall system size. An incentive is also offered for commercial solar water heat systems, typically ranging between $0.07 and $0.51 for every kWh saved over the duration of the contract with APS.

For more information, visit the APS website.

SRP SolarWise Solar Energy

Eligible: Solar water heat, PV for residential and commercial (SRP territory)

Other info: See SRP website

Sulphur Springs Valley EC: SunWatts Incentive Program

Eligible: PV for residential and commercial sectors

Amount: $4/watt DC, up to 50%of project costs or $8,000 for residential;    $20,000 or 50% of project costs for commercial

Other info: See SunWatts website

 
SunShare PV Buydown Program

Eligible: PV for residential and commercial applications

Other info: See SunShare website

Trico Electric Cooperative: SunWatts Incentive Program

Eligible: Solar water heat, PV and wind for residential and commercial

Amount: PV and Wind Systems: $4/watt DC; Solar Water Heaters: $0.50 per expected first year kWh savings; maximum amount set at 50% of project costs

Other info: See Trico Cooperative website

Unisource Energy Services (UES): SunShare PV Buydown

Eligible: PV for residential and commercial applications

Amount: $3/watt DC, with a maximum of $45,000

Other info: See SunShare website.

Arizona Tax Incentives for Solar Power

For more information on any of the specific tax programs outline below, please visit the Arizona Solar Center website.

Residential Solar and Wind Energy Systems Tax Credit

Eligible:    
All types of solar for residential applications

Amount:          
Up to $1,000 per residence

Other info:
Unused credits may be carried over to the subsequent tax year, not to exceed five years. To be eligible for the credit, systems must be meet standards for performance and safety, as well as fulfill specific warranty requirements. For an idea of what to expect, review the 2006 tax instructions from Arizona Departement of Revenue (pdf).


Non-Residential Solar and Wind Tax Credit

Eligible:    
All types of solar for applications in commercial, industrial, agricultural, institutional and government sectors (plus several wind technologies)

Amount:          
10% of installed costs, up to $25,000 for any one building in one year and not to exceed a total of $50,000

Other info:
Unused credits may be carried over to the subsequent tax year, not to exceed five years. To be eligible for the credit, systems must be meet standards for performance and safety, as well as fulfill specific warranty requirements.

Corporate Tax Credit

Eligible:    
All types of solar for applications in commercial, industrial, agricultural, institutional and government sectors (plus several wind technologies)

Amount:          
10% of installed costs, up to $25,000 for any one building in one year and not to exceed a total of $50,000

Other info:
Unused credits may be carried over to the subsequent tax year, not to exceed five years. To be eligible for the credit, systems must be meet standards for performance and safety, as well as fulfill specific warranty requirements.

Solar and Wind Equipment Sales Tax Exemption

Eligible:    
All types of solar for applications in commercial and residential sectors

Amount:          
100% exemption

Other info:
Purchases of solar and wind equipment are exempted from state sales tax. Currently set to expire at the end of 2010.

Arizona Solar Income Tax Credit

Eligible:    
All types of solar for applications in commercial and residential sectors

Amount:          
25% deduction, upto $4,000 of cost of solar devices installed on your home

Other info:
The tax credit is a one-time offer and restricts the homeowner for additional credits claimed in subsequent years for solar purchases made on the same residence


Solar Energy Property Tax Exemption

Eligible:    
All types of solar for applications in commercial and residential sectors

Amount:          
100% exemption for increased value

Overview:
Solar-energy home improvements do not increase homeowner’s tax liability 

Tax Incentives