Solar Incentives
Arizona has continued to aggressively build a portfolio of solar industry incentives, from manufacturing, to installation, to energy production.
Renewable Energy Tax Incentive Program
Arizona’s new program provides $350 million in incentives to renewable-energy firms expanding or locating in Arizona. The program went into effect January 2010.
The Renewable Energy Tax Incentive Program provides tax incentives to companies in the solar, wind, geothermal and other renewable energy industries, providing up to a 10 percent refundable income tax credit and up to a 75 percent reduction on real and personal property taxes. Program Guidelines and Summary documents are available with complete program information at the program page on the Arizona Commerce Authority website.
Commercial / Industrial Solar Energy Tax Credit Program
Designed to encourage businesses to install solar energy devices at Arizona facilities, 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. For a program summary, visit the program page at the Arizona Commerce Authority website.
In the 2010 legislative session, the Arizona legislature extended this incentive an additional six years, to 2016. Also available is the Fact Sheet from the Arizona Legislature.
Solar Research, Development, Production Tax Credit (SB 1254)
This program is a modification and update to the state's existing Research and Development Tax Credit incentive. It allows employers with fewer than 150 full-time employees to receive a refund for the research and development credit. New companies that previously would not have the tax liability to fully take advantage of the R&D tax credit may now qualify to recieve a discounted refund. Total refunds are limited to $5 million a year.
The program also provides a tax credit for a taxpayer who holds title to a “qualified energy generator” that produces power after January 31 but before 2021. The credits are limited to $2 million for each qualified generator and each year the total amount cannot exceed $20 million.
Additional information: Fact Sheet from the Arizona Legislature.
Solar Liquid Fuel Tax Credit (HB 2370)
HB 2370 establishes a new individual and corporate income tax credit for research and development, production, and delivery system costs associated with solar liquid fuel for 2011 through 2026.
Additional information: Fact Sheet from the Arizona Legislature.
Learn more about the solar industry in Southern Arizona: