Arizona Solar Center Blog

Commentary from Arizona Solar Center Board Members and invited contributors.

While blog entries are initiated by the Solar Center, we welcome dialogue around the posted topics. Your expertise and perspective are highly valued -- so if you haven't logged in and contributed, please do so!

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Pioneers of the Sun

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Quick Facts: Solar Electric

Updated January 20, 2014
  1. A home solar system is typically made up of solar panels, an inverter, wiring (meter and disconnect switch) and support structure.
  2. A typical rooftop solar electric system is connected to the utility grid and relies upon the grid infrastructure for backup power. It will not operate in the absence of utility power.
  3. A modest PV system will pay for itself during the life of the equipment, generally several times over.
  4. Solar increases the value of your home.
  5. Solar equipment helps protect you from rate increases and fuel cost uncertainties.
  6. Use of solar helps decrease air pollution problems related to burning fossil fuels.
  7. Solar Energy is measured in kilowatt-hours. 1 kilowatt = 1000 watts. 
  8. To figure the cost of a photovoltaic system the system size is multiplied by the installed cost per watt.  A 1 kW system that costs $4 per installed watt would cost $4,000 (1,000 x $4 = $4,000).
  9. Larger systems have a lower cost per watt.
  10. Solar energy systems qualify for state and federal tax credits and exemption from state sales tax.  The cost of a solar system is further reduced by a state tax credit (25 percent up to $1000) and a federal tax credit (30 percent).
  11. A one kilowatt solar system that cost $4,000 to install would be reduced by a $1000 state tax credit and $1200 federal tax credit.  The out-of-pocket cost would be $2800.
  12.  A solar energy system generates units of energy measured in kilowatt-hours.  One kilowatt-hour (kWh) is the amount of electricity needed to burn a 100 watt light bulb for 10 hours.
  13.  A 1 kilowatt home solar system will generate approximately 1,680 kilowatt-hours per year in Arizona.  The average Arizona utility electric rate is $0.12 a kilowatt-hour – meaning the energy offset by a 1 kilowatt solar system is equal to $201.60 (1680 x $0.12 = $201.60).
  14. If a 1 kW photovoltaic system cost $2800 to install (after incentives), and saves $201.60 a year in electricity costs – the payback period would be 14 years.
  15. A typical Arizona home generally has an electric utility service rated at 200 amperes.  This generally limits the size of the inverter to about 8,000 watts without extra costs.  An inverter rated at 8,000 watts can generally use a photovoltaic array rated at up to 10,000 watts (10 kilowatts).
  16. If the photovoltaic array is in an area without shadows, or must face other than South, the performance will be affected.
  17. In one hour more sunlight falls on the earth than what is used by the entire population in one year.
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Quick Facts: Solar Hot Water

Updated: January 20, 2014
  1. Solar water heaters pay for themselves in 3-10 years, depending on your hot water use and whether you are comparing to gas or electric water heating.
  2. A simple passive system only adds about $15/month to your mortgage and pays for itself long before your mortgage is paid off.
  3. The total costs (initial cost, fuel, maintenance) over the life-ycle of a solar water heater is one of the lowest of all water heating systems available.
  4. Solar increases the value of your home and provides an appealing sales feature.
  5. Your solar equipment has value independent of your house. You could sell your solar equipment or take it with you when you move.
  6. Take advantage of state and federal income tax credits (25% up to $1000 state; 30% federal) and exemption from state sales tax.
  7. Utility companies offer rebates for the purchase of solar equipment including solar water heaters. Check with your utility to see if any rebate applies in your area.
  8. Increased use of solar will help decreases environmental problems caused by burning fossil fuels.
  9. Use of solar energy creates quality local jobs by expanding the local solar industry.
  10. Use of solar provides you with more independence in your personal life.
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Economics of Solar Swimming Pool Heating

Updated Feb. 16, 2014

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Economics of Solar Hot Water


Updated Feb. 16, 2014

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Economics of Photovoltaics

Updated January 4, 2014

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Economics of Passive Solar

Updated December 29, 2013

Solar energy is harnessed, converted and distributed using a range of ever-evolving technologies and strategies. Passive solar energy is characterized by building orientation, strategies that integrate the house with its climatic environment, and materials that have favorable thermal mass.

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Economic Benefits of Solar

Updated December 15, 2013

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DSIRE - Database of State Incentives for Renewable Energy


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Arizona Renewable Energy Standard & Tariff (REST)

In 2006, the Arizona Corporation Commission (ACC) established a requirement that 15 percent of retail energy sales from ACC regulated electric utilities come from renewable energy resources by the year 2025. A portion of that energy (30 percent) must come from distributed resources (DR), or what is commonly referred to as distributed generation (DG) technologies. Half of the DG requirement must come from residential applications and the other half from non-residential/non-utility applications. The requirement applies to investor-owned utilities and electric power cooperatives serving retail customers in Arizona. Distribution companies with more than half of their customers outside Arizona are exempt.

The Goldwater Institute challenged the REST rules in court and in 2007 Arizona's Attorney General Terry Goddard certified the rule as constitutional.

The compliance schedule by year is outlined below:

  • 2006: 1.25%
  • 2007: 1.50% (5% DR)
  • 2008: 1.75% (10% DR)
  • 2009: 2.00% (15% DR)
  • 2010: 2.50% (20% DR)
  • 2011: 3.00% (25% DR)
  • 2012: 3.50% (30% DR)
  • 2013: 4.00% (30% DR)
  • 2014: 4.50% (30% DR)
  • 2015: 5.00% (30% DR)
  • 2016: 6.00% (30% DR)
  • 2017: 7.00% (30% DR)
  • 2018: 8.00% (30% DR)
  • 2019: 9.00% (30% DR)
  • 2020: 10.00% (30% DR)
  • 2021: 11.00% (30% DR)
  • 2022: 12.00% (30% DR)
  • 2023: 13.00% (30% DR)
  • 2024: 14.00% (30% DR)
  • 2025: 15.00% (30% DR)

Contact Your Utility for Details About REST Program Incentives

The following links connect to the REST program details for Arizona electric utilities and cooperatives regulated by the Arizona Corporation Commission. Salt River Project, which is not regulated by the ACC, also offers incentives similar to REST incentives.

The funding available for the each program is limited. The incentives are funded by a small surcharge approved by the ACC and added to customers' electric bills. The approved amounts vary among the utilities. Each utility has an application and reservation process for obtaining funding. It is important for customers to contact their utility directly before investing in renewable energy equipment to obtain specific information on program requirements, funds availability, and the process followed by the utility for approvals and installation.

For more information, see the complete ACC docket (~10 MB PDF):

The Renewable Energy Standard and Tariff rules, Arizona Administrative Code ("A.A.C.") R14-2-1801 through -181 5
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Disclaimer: This section of our website provides an overview of financial and other incentives available to Arizona residents and businesses for installing and operating systems that utilize solar energy.

The Arizona Solar Center provides this 3rd Party information as a service. The policies and status of programs change frequently. The Solar Center is not responsible for information that is out-of-date or inaccurate. The reader is individually responsible to fact-check all program details before making financial or other types of decisions.

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Federal Residential Solar Investment Tax Credit (ITC)

clockThis 30% residential solar property tax credit is currently in effect for property placed in service after December 31, 2008 through to December 31, 2016. The credit enables individual taxpayers to offset AMT liability, and to carry unused credits forward to the next succeeding taxable year.

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Federal Business Solar Investment Tax Credit (ITC)

3468The federal business energy tax credit is a 30% tax credit available to commercial businesses that invest in or purchase energy property in the United States.  Energy property is defined as either solar or geothermal energy. Solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. Geothermal energy property includes equipment used to produce, distribute, or use energy derived from a geothermal deposit. For electricity produced by geothermal power, equipment qualifies only up to, but not including, the electrical transmission stage.

The energy property must be operational in the year in which the credit is first taken. The property must also be constructed by the taxpayer and used by the taxpayer. Energy property does not include public utility property, passive solar systems, pool heating, or equipment used to generate steam for industrial or commercial processes.

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Arizona Solar Devices Sales Tax Exemption

Arizona provides state tax incentives for the sale or installation of “solar energy devices,” as these devices are defined within the Arizona Revised Statutes (A.R.S.). Transaction privilege (“sales”) tax exemptions apply to retail sales of solar energy devices, and installations of such devices under the prime contracting classification. Certain state income tax credits are also available.

Transaction Privilege (“Sales”) Tax Exemptions:

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Arizona State Residential Solar Tax Credit

Homeowners can claim a 25% tax credit on up to $4,000 of solar devices installed on a residence (effectively a maximum credit of $1,000). This is a one time tax credit and restricts the homeowner for additional credits for solar purchases made for the same residence in subsequent years.

The law establishing the tax credit imposed several requirements on the seller of solar devices in order to qualify the equipment and application. Title 44, chapter 11, article 11 of the Arizona revised statues (44-1761- Definitions, and 44-1762 - Solar energy device warranties; installation standards; inspections) detail the requirements. The Arizona Department of Commerce has issued guidelines (in 1993) for the required certificate to the buyer that the solar energy device complies with the requirements of the tax credit. the Arizona Registrar of Contractors later assumed this responsibility but has not yet issued any further requirements.

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Tax Credits

Updated February 15, 2014

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Solar Water Heating Systems (Estimated Annual Performance)

(Updated January 2004)
The following companies products are certified by the Solar Rating and Certification Corporation (SRCC). The tables below give the estimated annual performance for all OG-300 certified solar water heating systems. There are separate tables for each company. The systems are listed by company name, system name and model number. The energy savings is the estimated annual performance. This value is the quantity of energy that did not have to be provided by electricity or gas because of the contribution of the solar water heating system. For more information on SRCC go to

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Solar Water Savings

Updated: January 21, 2014

In the desert regions of Arizona, a family of four typically spends more than $300 per year on electric water heating. By installing a solar water heater, the state's desert homeowners could save between 50 and 90 percent on their bill (depending on the efficiency of the solar water heating system and the amount of hot water used). The Solar Rating and Certification Corporation (SRCC) has compiled a list of solar water heaters and their efficiencies.

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Savings Calculators & Design Tools

Updated January 26, 2014

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NREL PV Watts Calculator
NREL's PVWatts™ calculator determines the energy production and cost savings of grid-connected photovoltaic energy systems throughout the world. It allows homeowners, installers, manufacturers, and researchers to easily develop estimates of the performance of hypothetical PV installations.

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