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Incentives

Incentives available for commercial solar in 2014 can cover up to 65% of system costs, reducing the payback period to as low as 4 years.

Federal Tax Credit

The federal solar income tax credit is 30% of the total system cost. There is no cap and it can be carried forward if needed. Set to drop to 10% for systems installed after December 31, 2016.

Details found here:  DSIRE.org Federal ITC

State Tax Credit

The Arizona state tax credit is 10% of the system cost and is capped at $25,000 per location, $50,000 per business.  There is a $1,000,000 pool of funds available first-come-first-serve each year for systems placed in service that year only.  Systems installed earlier in the year have a greater chance of being awarded funds.  Expires Dec 31, 2018.  Note: There is a 1% charge for obtaining the necessary certification letter from the Arizona Commerce Authority for the credit.

Details found here:  DSIRE.org AZ ITC

State Property Tax Increase Exemption

Arizona state law dictates that your property taxes will not increase as a result of installing a photovoltaic system.

Details found here:  DSIRE.org AZ Property Tax

Depreciation

Solar installations can be depreciated in five years under MACRS rules. The tax basis for depreciation is effectively equal to the total system cost less 50% of state and federal tax credits and is valued at approximately 25% of the system cost.

Details found here:  DSIRE.org Depreciation

REAP Grant

The USDA’s Rural Energy America Program provides grants and loan guarantees to ‘rural’ small businesses outside of a census metro area (including Green Valley and Sahuarita) and agricultural producers (including plant nurseries) to deploy renewable energy systems and energy efficient measures.  The grant is for up to 25% of the total project cost.

To see if your business qualifies as ‘rural’ input your address here: Property Eligibility Search

Details found here.  USDA.gov

NET Metering

TEP offers NET metering for solar electric systems. This means that excess kWh production is carried over for use during following months at a retail rate.  Once a year, during the October billing cycle, any excess production that has not been used is purchased by TEP at the wholesale cost, generally $0.03 – $0.04/kWh.

For a description of how it works, see: What exactly is Net Metering? 

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