Incentives/Policies for Renewables & Efficiency
Last DSIRE Review: 04/19/2013
||Personal Tax Credit
|Eligible Renewable/Other Technologies:
||Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass
|Amount:||Wind and Biomass: $0.01/kWh, paid for 10 years|
Solar: Varies by year (see below), paid for 10 years
|Maximum Incentive:||$2 million per year|
|Eligible System Size:||5 MW minimum|
|Carryover Provisions:||Unused credit may be carried forward for 5 years|
|Program Budget:||$20 million per calendar year (includes corporate tax credit)|
A.R.S. § 43-1083.02|
Senate Bill 1254
of 2010 created a tax credit for electricity produced by certain renewable resources. Qualified renewable energy systems installed on or after December 31, 2010, may be eligible for the tax credit based on the amount of electricity produced annually for a 10-year period. The Arizona Department of Revenue (DOR) will accept applications annually between January 2 and January 31 of the year following the year for which the credit is being claimed. The DOR will approve the applications on a first-come, first-served basis until the annual cap of $20 million has been reached. This cap includes both personal and corporate tax credits combined. The DOR will maintain a list of approved applicants. Once a taxpayer is given a position in the list, the taxpayer will remain in that position for the full 10-year period, but the taxpayer must submit a new application every year. If the taxpayer fails to submit a completed application within the one-month window in which the DOR accepts applications, the taxpayer will forfeit the taxpayer's position in the list. If a taxpayer loses position in the list, the taxpayer may apply in the following year for a new position in the list.
The maximum tax credit that can be claimed for a qualified system in any one year is $2 million. The tax credit for wind and biomass* systems equals $0.01 per kilowatt-hour (kWh) for the first 200,000 megawatt-hours (MWh) of electricity produced in a calendar year for a period of ten years. The tax credit for photovoltaics (PV) and solar thermal electric systems varies depending on the year of electricity production according to the following schedule:
- Year 1: $0.04 per kWh
- Year 2: $0.04 per kWh
- Year 3: $0.035 per kWh
- Year 4: $0.035 per kWh
- Year 5: $0.03 per kWh
- Year 6: $0.03 per kWh
- Year 7: $0.02 per kWh
- Year 8: $0.02 per kWh
- Year 9: $0.01 per kWh
- Year 10: $0.01 per kWh
Application materials can be found at the DOR web site above.
* For the purpose of this tax credit, biomass includes forest-related material, as defined; agricultural-related materials, as defined; animal waste and solid woody waste materials, as defined; crops and trees planted for the purpose of being used to produce energy; landfill gas; waste water treatment gas; and bio-solids.
Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.
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