With three hundred days of sun a year, it’s not surprising that Arizona ranks 4th among the states for the amount of solar installations. But the sun isn’t the only reason for the recent boom in Arizona. Arizona utility companies are mandated to get at least 15 percent of their energy from renewable resources by 2025, and 30 percent of that must come through distributed generation. As a consequence, the main source of solar funding available to homeowners and business owners in Arizona are rebates offered by utility companies striving to meet these goals. Rebates vary between the utility companies. And, if you think you might invest in solar, it’s best to act quickly. Amounts reimbursed per watt diminish as time goes on.
Rebates from Utility Companies
As of October 2011, the state’s largest utility, Arizona Public Service (APS), was offering homeowners an incentive of up to $1.00 per DC watt on installed grid-tied solar systems and $1.50 per watt for off grid solar power systems. So, if your system is 3 kW or 3,000 watts in size, for example, you’ll receive a check for $3,000 for a grid-tied home and $4,500 for an offgrid home. That's not including the 30% Federal Tax Credit and state tax credit and exemptions.
Salt River Project (SRP), the state’s second largest utility, was offering homeowners an incentive of up to $1.20 per installed DC watt with a maximum of $6,000.
For those of you who live in Tucson, and Tucson Electric Power (TEP) is your utility provider, TEP is offering homeowners an incentive of up to $0.75 per watt for grid-tied systems and $0.50 per watt for Offgrid Home Systems for the remainder of 2011. You can also read about incentive programs offered by Sulphur Springs Valley EC, Trico Electric Cooperative, and UniSource Energy Services.
Arizona Tax Credits and Exemptions
Any utility rebate can be combined with the 30 percent Federal Tax Credit and the various Arizona state tax exemptions and credits.
For homeowners, Arizona offers a 25% Solar Energy personal tax credit on the cost of a solar or wind energy device, with a $1,000 maximum allowable limit. The credit needs to be claimed in the year of installation.
Any non-residential entity, whether commercial, non-profit, government, school, or tribal, qualifies for a 10 percent tax credit with a maximum of $25,000 for one building and $50,000 per business. Businesses may also be eligible for the tax credit based on the amount of electricity produced annually for a 10-year period.
Homeowners and business owners are both exempt from sales tax, and 100 % of the added value a renewable energy systems brings on their property taxes
Arizona has one of the best net metering policies in the nation. Homeowners with an installed solar gridtie system are able to “bank” the excess electricity their solar system generates and receive credit of up to 100% of their electric bill at the full retail electricity price. Credit for any excess power produced can be rolled over month to month, and any surplus is returned annually to the consumer.
Not all Arizona electric utilities need to comply with this net metering law. SRP, for example has its own program. Read more about it. It is necessary to check with the utility serving a specific address to determine if net metering is available to you.
- Arizonans get great rebates from their utility companies ranging from .50 to $1.50 depending on their utility company.
- Rebates diminish over time, so it's best to act quickly.
- Property tax and sales tax exemptions are available to homeowners and business owners alike.
- Homeowners receive a 25 percent tax credit, with a $1,000 year maximum.
- Business owners can receive10 percent tax credit, with a maximum of $25,000 per building and $50,000 total.
- Arizona's net metering program is one of the most generous in the nation.