• Know Your Rights

    Arizona law protects individual homeowners’ private property rights to solar access by dissolving any local covenant, restriction or condition attached to a property deed that restricts the use of solar energy. This law sustained a legal challenge in 2000. A Maricopa County Superior Court judge ruled in favor of homeowners in a lawsuit filed by their homeowners association seeking to Read more
  • Agua Caliente PV Power Plant Among World’s Largest

    The Agua Caliente solar farm near Yuma features First Solar’s thin-film cadmium-telluride (CdTe) solar modules. Located 65 miles east of the city of Yuma, Arizona, this plant is one of the world’s largest operational PV power plants with 290MW (AC) connected to the electricity grid. Read more
  • Solar Hot Water

    There are two types of solar water heating systems: active, which have circulating pumps and controls, and passive, which don't. The typical solar water heater is comprised of solar collectors and a well-insulated storage tank. The solar collector is a network of pipes that gathers the sun's energy, transforms its radiation into heat, and then transfers that heat to either Read more
  • Federal Residential Renewable Energy Tax Credit

    (Information provided by DSIRE - Last reviewed 02/19/2009) Incentive Type: Personal Tax Credit State: Federal Eligible Renewable/Other Technologies: Solar Water Heat, Photovoltaics, Wind, Fuel Cells, Geothermal Heat Pumps, Other Solar Electric Technologies Applicable Sectors: Residential Amount: 30% Maximum Incentive: Solar-electric systems placed in service before 2009: $2,000Solar-electric systems placed in service after 2008: no maximumSolar water heaters placed in service before Read more
  • Solar Building Design in Arizona

    The idea of using the sun to meet the energy needs in our buildings has been with us since the time of the Greeks, with some of the design manifestations even evident in the prehistoric structures of Arizona and the Southwest. There is a great historic tradition for Arizona buildings that utilize our most abundant resource, and the current increases Read more
  • How Not to- Battery Connections

    Photo shows the situation after a battery discharge test at 300 amps was terminated on a 1530 AH IBE battery string when one post melted. During the discharge test all cell voltages are logged. The sum of the cell voltages was 2.73 volts lower than the 48-volt string voltage. This is an average of 118 mv per inter-cell connection, 5-10 Read more
  • 1 Know Your Rights
  • 2 Agua Caliente PV Power Plant Among World’s Largest
  • 3 Solar Hot Water
  • 4 Federal Residential Renewable Energy Tax Credit
  • 5 Solar Building Design in Arizona
  • 6 How Not to- Battery Connections

Blogs

  1. Solar Center Blog
  2. Guest Blogs
Jim Arwood
28 December 2016

“A lie gets halfway around the world before the truth has a chance to get its pants on.”  --Winston Churchill

Jim Arwood
24 November 2016

The future is not what it used to be.

In the 1990s, the push for electric vehicles gained momentum in response to national security concerns over our reliance on imported fuels and tailpipe emissions.


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Some things to pay attention to in Arizona

REST Workshop Canceled 

The REST workshop scheduled for this Wednesday (6/7/17) at 10am has been canceled. No future date has been set at this time.  CANCELED - June 7, 2017, 10am: Special Open Meeting/Workshop - REST Review Workshop - Hearing Room One, 1200 W. Washington, Phoenix, AZ, 85007, Docket No. E-00000Q-16-0289

Transaction Privilege Tax (TPT) Changes Affect Solar Business and Customers

AriSEIA reported this past November that the TPT exemption covering the installation of solar energy systems would expire at the end of the year with new regulations going into effect on January 1, 2017. A bill was introduced in the last session of the Arizona Legislature to make the exception permanent, but it did not receive a hearing. Since there was no bill passed to extend the exemption, the new regulations are in effect.  Below is the notice TEP sent to its contractors:

The First Regular Session of the 53rd Arizona Legislature adjourned last week and we wanted to make you aware of an important change that may affect your tax liability as a solar contractor. As of January 1, 2017, the gross proceeds of sales or gross income derived from a contract to provide and install a solar energy device are now taxable under the State of Arizona’s transaction privilege tax statute (see Arizona Revised Statutes Section 42-5075.B.13). An exemption for this activity had been enacted in 1996 with a sunset date of January 1, 2017. A legislator in UES’ service territory, Senator Sonny Borelli (R - Lake Havasu City), had introduced legislation that would have eliminated the sunset date and made the tax exemption permanent. However, the bill did not receive a hearing and this exemption is no longer effective as of January 1, 2017. Additionally, a policy rider effecting the exemption was not included in the budget signed by Governor Ducey.

From December 31, 1996 and up to January 1, 2017, the gross proceeds of sales or gross income derived from a contract to provide and install a solar energy device (commonly called Sales Tax in Arizona) were exempt.  It appears that this is no longer the situation and sales of solar devices may be subject to sales tax (TPT).  Thank your legislators.

Editorial Note:  A review of the Arizona Revised Statutes http://www.azleg.gov/arstitle/ Title 42-5061 (M) on 6-6-2017 indicates "M. There shall be deducted from the tax base the amount received from sales of solar energy devices.....".  Apparently only contracting is affected by the above TPT change.  Watch this space for updates as the Arizona solar industry researches this subject.

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(Information provided by DSIRE - Last reviewed 02/19/2009)


Incentive Type:   Personal Tax Credit
State:   Federal
Eligible Renewable/Other Technologies:   Solar Water Heat, Photovoltaics, Wind, Fuel Cells, Geothermal Heat Pumps, Other Solar Electric Technologies
Applicable Sectors:   Residential
Amount:   30%
Maximum Incentive:   Solar-electric systems placed in service before 2009: $2,000
Solar-electric systems placed in service after 2008: no maximum
Solar water heaters placed in service before 2009: $2,000
Solar water heaters placed in service after 2008: no maximum
Wind turbines placed in service in 2008: $4,000
Wind turbines placed in service after 2008: no maximum
Geothermal heat pumps placed in service in 2008: $2,000
Geothermal heat pumps placed in service after 2008: no maximum
Fuel cells: $500 per 0.5 kW
Carryover Provisions:   Excess credit may be carried forward to succeeding tax year
Eligible System Size:   Fuel cells: 0.5 kW minimum
Equipment/Installation Requirements:   Solar water heating property must be certified by SRCC or by comparable entity endorsed by the state in which the system is installed. At least half the energy used to heat the dwelling's water must be from solar. Geothermal heat pumps must meet federal Energy Star requirements. Fuel cells must have electricity-only generation efficiency greater than 30%.
Authority 1:   26 USC § 25D
Date Enacted:   8/8/2005 (subsequently amended)
Date Effective:   1/1/2006
Expiration Date:   12/31/2016
Authority 2:   IRS Form 5695 & Instructions: Residential Energy Credits

 



Summary:
Note: The American Recovery and Reinvestment Act of 2009 does not allow taxpayers eligible for the residential renewable energy tax credit to receive a U.S. Treasury Department grant instead of taking this credit. 

Established by the federal Energy Policy Act of 2005, the federal tax credit for residential energy property initially applied to solar-electric systems, solar water heating systems and fuel cells. The Energy Improvement and Extension Act of 2008(H.R. 1424) extended the tax credit to small wind-energy systems and geothermal heat pumps, effective January 1, 2008. Other key revisions included an eight-year extension of the credit to December 31, 2016, the ability to take the credit against the alternative minimum tax, and the removal of the $2,000 credit limit for solar-electric systems beginning in 2009. The credit was further enhanced in February 2009 by The American Recovery and Reinvestment Act of 2009 (H.R. 1: Div. B, Sec. 1122, p. 46), which removed the maximum credit amount for all eligible technologies (except fuel cells) placed in service after 2008.

A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is on a new home, the "placed in service" date is the date of occupancy by the homeowner. Expenditures include labor costs for onsite preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The excess credit can be carried forward until 2016, but it is unclear whether the unused tax credit can be carried forward after then. The maximum allowable credit, equipment requirements and other details vary by technology, as outlined below.


Solar-electric property

  • There is no maximum credit for systems placed in service after 2008. The maximum credit is $2,000 for systems placed in service before January 1, 2009.
  • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2016.
  • The home served by the system does not have to be the taxpayer's principal residence.
  • Note that the Solar Energy Industries Association (SEIA) has published a five-page document that provides answers to frequently asked questions regarding the federal tax credits for solar energy.


Solar water-heating property

  • There is no maximum credit for systems placed in service after 2008. The maximum credit is $2,000 for systems placed in service before January 1, 2009.
  • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2016.
  • Equipment must be certified for performance by the Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed.
  • At least half the energy used to heat the dwelling's water must be from solar in order for the solar water-heating property expenditures to be eligible.
  • The tax credit does not apply to solar water-heating property for swimming pools or hot tubs.
  • The home served by the system does not have to be the taxpayer's principal residence.
  • Note that the Solar Energy Industries Association (SEIA) has published a five-page document that provides answers to frequently asked questions regarding the federal tax credits for solar energy.


Fuel cell property

  • The maximum credit is $500 per half kilowatt (kW).
  • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2016.
  • The fuel cell must have a nameplate capacity of at least 0.5 kW of electricity using an electrochemical process and an electricity-only generation efficiency greater than 30%.
  • In case of joint occupancy, the maximum qualifying costs that can be taken into account by all occupants for figuring the credit is $1,667 per half kilowatt. This does not apply to married individuals filing a joint return. The credit that may be claimed by each individual is proportional to the costs he or she paid.
  • The home served by the system must be the taxpayer's principal residence.


Small wind-energy property

  • There is no maximum credit for systems placed in service after 2008. The maximum credit is $500 per half kilowatt, not to exceed $4,000, for systems placed in service in 2008.
  • Systems must be placed in service on or after January 1, 2008, and on or before December 31, 2016.
  • The home served by the system does not have to be the taxpayer's principal residence.


Geothermal heat pumps

  • There is no maximum credit for systems placed in service after 2008. The maximum credit is $2,000 for systems placed in service in 2008.
  • Systems must be placed in service on or after January 1, 2008, and on or before December 31, 2016.
  • The geothermal heat pump must meet federal Energy Star program requirements in effect at the time the installation is completed.
  • The home served by the system does not have to be the taxpayer's principal residence.


Significantly, The American Recovery and Reinvestment Act of 2009 repealed a previous limitation on the use of the credit for eligible projects also supported by "subsidized energy financing." For projects placed in service after December 31, 2008, this limitation no longer applies.  


History 

The federal Energy Policy Act of 2005 established a 30% tax credit (up to $2,000) for the purchase and installation of residential solar electric and solar water heating property and a 30% tax credit (up to $500 per 0.5 kilowatt) for fuel cells. Initially scheduled to expire at the end of 2007, the tax credits were extended through December 31, 2008, by the Tax Relief and Health Care Act of 2006.  

In October 2008, the Energy Improvement and Extension Act of 2008 extended the tax credits once again (until December 31, 2016), and a new tax credit for small wind-energy systems and geothermal heat pump systems was created. In February 2009, The American Recovery and Reinvestment Act of 2009 removed the maximum credit amount for all eligible technologies (except fuel cells) placed in service after 2008. 

 


Contact: 
Public Information - IRS 
U.S. Internal Revenue Service
1111 Constitution Avenue, N.W.
Washington, DC 20224
Phone: (800) 829-1040 
Web Site: http://www.irs.gov

About

  • Welcome to the Arizona Solar Center

     This is your source for solar and renewable energy information in Arizona. Explore various technologies, including photovoltaics, solar water heating, solar architecture, solar cooking and wind power. Keep up to date on the latest industry news. Follow relevant lectures, expositions and tours. Whether you are a homeowner looking to become more energy efficient, a student learning the science behind the technologies or an industry professional, you will find valuable information here.
  • About The Arizona Solar Center

    Arizona Solar Center Mission- The mission of the Arizona Solar Center is to enhance the utilization of renewable energy, educate Arizona's residents on solar technology developments, support commerce and industry in the development of solar and other sustainable technologies and coordinate these efforts throughout the state of Arizona. About the Arizona Solar Center- The Arizona Solar Center (AzSC) provides a broad-based understanding of solar energy, especially as it pertains to Arizona. Registered Read More
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