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Arizona

 

An arrow graphic shows that Arizona's renewable portfolio standard increases from 8.9% in 2015, to 15% in 2025.

Carve-out: 4.5% of total electricity sales must come from distributed generation
Tracking system: Western Renewable Energy Generation Information System (WREGIS)

Investor-owned utilities (IOUs) and electric power cooperatives in Arizona, excluding distribution companies with more than half of their customers outside of the state, are subject to the renewable energy standard. Arizona has a net-metering program with no size limit but is specific to the customer's load. Arizona solar customers are eligible for an up-front incentive through the state's solar and wind tax credit. Large systems are eligible for additional production-based incentives. Several Arizona utilities also offer rebate programs that midscale solar projects are eligible for.

Latest Updates

  • In December 2017, the Arizona Corporation Commission (ACC) approved to lower the credit for energy exported from a solar project to the grid. The compensation is based on a five-year average of utility-scale solar PPA pricing.
  • In February 2017, The ACC approved Tucson Electric Power's new pricing scheme and monthly fees for solar customers.

Net Metering

Net metering is available to customers of IOUs and electric cooperatives in Arizona. The state's net metering requirement does not apply to the Salt River Project (SRP) service territory or municipal utilities. Salt River Project has established a separate net metering program capped at 300 kW. The SRP program also compensates at the retail rate.

The Arizona Public Service (APS) Company charges distributed solar system owners a fixed charge demand charge of $0.70 kW/month. APS is seeking regulatory approval to raise the demand charge to $3.00 kW/month. Customers in SRP's net metering program are also subject to demand charges based on the customer's maximum monthly energy use. Other Arizona utilities have proposed similar charges for solar customers.

System size limit: 125% of customer's total connected load

Aggregate cap: Not addressed

Credit: Net excess generation is credited at $0.129/kWh for the first year.

RECs: Customers retain ownership of renewable energy certificates (RECs) unless participating in a utility incentive program.

Meter aggregation: Not addressed

Meter aggregation: CPUC allows virtual net metering and net energy metering aggregation

Interconnection

Arizona currently does not have statewide interconnection standards for distributed generation, but has a set of guidelines. The state's utilities, including SRP, Tucson Electric Power (TEP), and APS have developed separate interconnection agreements and procedures for distributed generation.

System size limit: Varies by utility

Liability insurance: Varies by utility

External disconnect switch: Varies by utility

Third Party Ownership

Third party power purchase agreements for governments, schools, and other non-profit institutions are exempt from Arizona Corporation Commission regulation.

Community Solar

There are currently no statewide community solar policies or programs in Arizona. Individual utilities and third party develoeprs offer community solar programs.

State Incentive Programs

Program Administrator Incentive
Nonresidential Solar and Wind Tax Credit Department of Revenue Non-residential solar systems are eligible for a corporate or personal tax credit worth 10% the value of the system, capped at $25,000 per building or $50,000 in credits per non-residential customer. The tax credit is due to expire on December 31, 2018.
Renewable Energy Production Tax Credit Department of Revenue Systems of 5 MW or larger are eligible for a production-based tax credit for the first 10 years of system operation, beginning at $0.04/kWh and declining to $0.01/kWh in the tenth year.
Property Assessed Clean Energy (PACE) Financing Department of Revenue Systems larger than 20 MW used for on-site consumption at manufacturing and international operations facilities are eligible for an additional tax credit worth $5 million per year for up to five years (subject to additional requirements).

Utility Incentive Programs

Utility Incentive Limitations
Mohave Electric Cooperative $0.20/W rebate Capped at $5,000; <50 kW
Sulphur Springs Valley Electric Cooperative $0.25/W rebate Capped at $5,000; must qualify as a net meter account.

Resources

The list below provides some resources for each type of policy or program. Please reference and contact relevant authorities and local utilities for the most up-to-date and accurate information on state and utility policies and incentive programs.

Renewable Portfolio Standard

Net Metering and interconnection

Programs and incentives

Other