Solar & Battery Regulation & Incentive Programs
Note: H.B. 2528, enacted in May 2017, amended this tax credit so that it will no longer available to manufacturing facilities beginning in 2018.
S.B. 1484 of 2014 provides a tax credit for new renewable energy systems that produce energy for self-consumption and are used primarily for manufacturing. H.B. 2670 of 2015 expanded this credit to include renewable energy systems that produce energy for self-consumption by “international operations centers”. H.B. 2528 of 2017 removes eligibility for manufacturers beginning in 2018.
Eligible systems must have a capacity of at least 20 megawatts (MW) or have a typical annual generation of at least 40,000 megawatt-hours (MWh). The tax credit is worth $5 million per year for five years for each facility.
Taxpayers must first apply to the Department of Revenue on a form prescribed by the Department. The Department will pre-approve taxpayers on a first-come, first-served basis until it has pre-approved a total of $10 million credits in each year. Program guidelines and application for pre-approval of the credit are available here.
Manufacturers
In order to qualify for a tax credit, the taxpayer must invest at least $300 million in new renewable energy facilities. At least 90% of the energy produced by the system must be used for self-consumption in the state.
International Operations Centers
To qualify as an international operations center, the owner or operator must make a minimum annual investment of $100 million in new capital assets in each of ten consecutive years. Investments greater than $100 million in any taxable year may be carried forward as a credit toward the investment requirements of subsequent years. On or before the tenth anniversary of certification as a international operations center, the owner or operator must make a total investment of at least $1.25 billion in new capital assets. In order to qualify for a tax credit, the international operations center must invest at least $100 million in new renewable energy facilities. By the fifth year the system is in operation, at least 51% of the energy must be used on-site.
For the purposes of this tax credit, renewable energy includes a variety of biomass resources, solar thermal electric, solar photovoltaics, and wind.
Name | Enacted Date | Effective Date | Expired Date |
---|---|---|---|
A.R.S. § 43-1164.05 | 04/11/2014 | 07/24/2014 | 12/31/2025 |
H.B. 2528 | 05/10/2017 | 12/31/2017 |