Renewable Energy Incentives
New Market Tax Credits
Below market interest loans guaranteed by federal government for the purpose of stimulating development in rural communities. Companies utilizing New Market Tax Credits pay on the interest only of the loan for seven years. After the 7th year, the loan is forgiven and the company is awarded the principal and equity of the loan.
Yuma Private Industry Council
YPIC offers programs that cover the entire costs of employee training, including teaching, materials, equipment and other expenses. Companies can additionally qualify for reimbursement of 50% employee salaries paid during training for up to 6 months.
The Quality Jobs through Renewable Industries
This program is designed to stimulate new investments in manufacturing and headquarter operations of renewable energy companies, including solar, wind, biofuel, geothermal and other renewable technologies. It is designed to generate net new revenue to the state. The benefits include:
- Transferable corporate income tax credit.
- Real and personal property tax reduction.
Commercial/Industrial Solar Energy Tax Program
This program subsidizes the initial cost of solar energy devices. The tax credit is equal to 10% of the installed cost of the solar energy device not to exceed $25,000 in credits for one building in a single tax year and $50,000 total credits per business per tax year. Tax credits can be used to offset Arizona income tax liability; any unused credit amounts can be carried forward for a five-year period.
Energy Equipment Property Tax Exemption
Arizona’s property tax can be used for solar energy devices and any other device or system designed for the production of solar energy for on-site consumption. It can also be used to include other renewable energy technologies, as well as combined heat and power systems, and energy efficient building components.
Property Tax Assessment for Renewable Energy Property
Renewable energy equipment owned by utilities and other entities operating in Arizona is assessed at 20% of its depreciated cost for the purpose of determining property tax.
Solar and Wind Equipment Sales Tax Exemption
Arizona provides a sales tax exemption for the retail sale of solar energy devices and for installation of solar energy devices by contractors.
Renewable Incentive Program
Arizona Public Service offers customers who install various renewable energy sources the opportunity to sell the credits associated with the energy generated to APS.
- Grid-tied residential PV: $3/watt DC, adjusted based on expected performance; No system size limit.
- Grid-tied non-residential PV: $2.50/watt DC; or commercial customers may opt for a production-based incentive (PBI) on a 10-, 15- or 20-year contract.
- Off-grid residential PV: $2/watt DC; System must be less than 5 kW.
- Off-grid non-residential PV: $1.50/W or PBI