Incentives available for residential photovoltaic systems installed in 2013 can cover over 45% of system costs, significantly reducing the payback period.
Tucson Electric Power (TEP) offers an upfront incentive on photovoltaic systems. The Arizona Corporation Commission reinstated TEP incentive funds at $0.10/kilowatt direct current. These incentives do take module orientation, tilt angle, and shading into consideration. A de-rate chart is used to determine incentive levels for modules that do not fit the standard mounting angles. See more here: TEP.
Incentives can be assigned to TFS as the last payment, or can be sent to the system owner.
Also, TEP will issue a 1099 for the utility incentive. Customers who purchase their systems, as opposed to leasing them, will therefore have to count the TEP incentive as miscellaneous income on their income taxes and pay taxes on the utility rebate. Customers who chose to lease a system simply assign the TEP incentive to the leasing company.
TRICO offers an incentive at $0.10/kilowatt direct current, capped at 10kW DC. These incentives do not take module orientation, tilt angle, and shading into consideration. More information can be found at www.trico.coop.
Federal Tax Credit
The federal solar tax credit is a 30% credit off income taxes and can be carried over year to year until 2016. For customers who lease their system, the federal tax credit is taken by the leasing company.
US Tax Code
IRS form 5695 (information about residential PV on pages 3 & 4)
State Tax Credit
The Arizona state income tax credit is 25% and is capped at $1,000 per residence. The unused portion of the tax credit may be carried forward for up to five years. This credit must be shared with other qualifying solar devices. There is also a sales tax waiver for photovoltaic systems, so you pay no state sales tax on your system.
State Property Tax Increase Exemption
State HOA Law
In Tucson, our utility companies (TEP, TRICO, SSVEC) offer NET metering for solar electric systems. This means that any 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 2 – 5 cents/KWH.
For a description of how it works, see: http://www.tfssolar.com/2619/what-exactly-is-net-metering/