Renewable Energy Generation Incentives
Clean Electricity Production Tax Credit 45/45Y
A federal tax credit for producing clean electricity.
Clean Electricity Investment Tax Credit 48/48E
A federal tax credit for investing in the installation of clean electricity equipment.
Low-Income Communities Bonus Credit 48(e) & 48E(h)
An application based federal tax credit to provide an additional incentive for small-scale solar and wind facilities on Indian land and in low-income communities.
Credit for Renewable Energy Investment Production for Self-Consumption by Manufacturers and International Operations Centers
A state tax credit for the installation of large solar, wind, or biomass devices.
Other statewide policies
Solar and Wind Sales Tax Exemption
Arizona exempts from sales tax the retail sale of solar and wind energy devices and the installation of these devices by contractors.
Energy Equipment Property Tax Deduction
Arizona property tax assessments consider on-site renewable energy systems and energy-efficient building components to add no value to properties.
Property Tax Assessment for Renewable Energy Equipment
Arizona taxes renewable energy and energy storage property at a lower rate — 20% of its depreciated cost
Local and utility incentives
Mohave Electric Cooperative
- Mohave Charged Rebate
Rebates for installing a battery to a solar electricity system.
- SunWatts Renewable Energy Incentive Program
Rebates for residential and small commercial photovoltaic (solar) or wind energy systems.
Trico Electric Cooperative
- SunWatts Incentive Program
Rebates for solar water heaters.
How do I decide which federal electricity tax credit is right for me?
Since there are two tax credits — the investment tax credit (ITC) and production tax credit (PTC) — to build or purchase renewable energy systems, the Department of Energy created key resources to help inform your decision.
The Department of Energy has published the following guidance:
The ITC is an upfront tax credit that does not vary by system performance, while the PTC provides tax credits earned over time. Whether to choose the ITC or the PTC depends largely on the cost of the project, the amount of sunlight available, and whether it is eligible for any bonus tax credits. See an example calculation below.
In general, large-scale PV projects will receive more value if they opt for the PTC in sunny places, while projects located in less sunny areas, that incur high installation costs, or that qualify for bonus tax credits, are more likely to benefit from the ITC.
Smaller-scale PV projects and CSP projects generally receive more value utilizing the ITC, particularly if they can utilize a low-income communities bonus, which is not available with a PTC. However, as installed PV and CSP system costs reduce over time (or generate more electricity), the PTC may become more attractive for all sectors.