Incentives available for residential photovoltaic systems installed in 2012 can cover over 65% of system costs, significantly reducing the payback period.

TEP Incentive

Tucson Electric Power (TEP) offers an upfront incentive on photovoltaic systems. This incentive is currently $0.60/watt  for grid-tied systems up to 28.4 kW DC, capped at 50% of the total system cost. The incentive will drop porportional to the rate at which 50% of the 2012 incentive budget is reserved.  These incentives do take module orientation, tilt angle, and shading into consideration.  A de-rate chart is used to determine rebates for modules that do not fit the standard.  See more here: www.greenwatts.com.

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 and SSVEC Incentives

Both TRICO and SSVEC offer rebates of $0.75/watt up to 30% of the total system cost.  Currently, both utilities have exhausted their funds for 2010 and there is a long waiting time for rebate disbursement. Customers may still choose to install a system, but the utility rebate will be delayed by 1- 3 years. More information can be found at www.trico.coop or www.ssvec.org.

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.
www.dsireusa.org
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.
www.dsireusa.org
State Q&A
State form

State Property Tax Increase Exemption

Arizona state law dictates that your property taxes will not increase as a result of installing a photovoltaic system.
AZ state property tax law, see 42-11054.C.2
www.dsireusa.org

State HOA Law

Arizona State law A.R.S. § 33-439 protects private property solar access by nullifying Home Owners Association covenants restricting solar energy systems. See DSIRE website.

NET Metering

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/

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