Solar & Battery Regulation & Incentive Programs

Renewable Energy Production Tax Credit (Personal)

Program Overview


Category:
Financial Incentive
Program Type:
Personal Tax Credit
Implementing Sector:
State
State:
Arizona
Eligible Storage Technologies:
Solar Thermal Electric, Solar Photovoltaics, Wind (All), Biomass, Landfill Gas
Website:
http://www.azdor.gov/TaxCredits/RenewableEnergyProductionTaxCredit.aspx
Incentive 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
Administrator:
Arizona Department of Revenue
Applicable Sectors:
Commercial
Budget :
$20 million per calendar year (includes corporate tax credit)
Start Date:
12/31/2010
Expiration Date:
12/31/2020
Last Updated:
11/01/2016

Eligibility Criteria

EligibilitySectorsTechnologies
$/kWh (10 years)0.0100
Commercial
Wind (All)
Biomass
Landfill Gas

Summary

S.B. 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: $0.015 per kWh
  • Year 10: $0.01 per kWh

Application materials can be found at the DOR website 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.

Authorities

NameEnacted DateEffective DateExpired Date
A.R.S. § 43-1083.025/11/201012/31/201012/31/2020
Program Guidelines02/05/2013