State Level

Download our briefs on policies that have been passed by the Arizona Legislature.

A brief on SolarCity v. AZ Dept of Revenue

Published January 2016

Published January 2016

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The essentials

 

  • A recent court decision found that leased rooftop solar equipment is subject to valuation by county assessors.
  • Residential and commercial owners of rooftop solar could be assessed and taxed for the real added value of their leased rooftop solar.
  • The lawsuit is expected to go to the appellate court, although neither party has filed an appeal yet.

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Arizona’s Prohibition on Requirement of Energy Measuring and Reporting

Published July 2015

published July 2015

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The Essentials

  • Energy measuring and reporting, also known as energy benchmarking, provides building owners, tenants and property managers with information about energy consumption in their building
  • Arizona Senate Bill 1241 passed through the Arizona legislature in April 2015, preventing local governments from mandating energy usage reporting for commercial buildings.
  • Supporters of the bill, including the Commercial Real Estate Development Association, rallied around the perceived risk that energy benchmarking poses for small businesses, citing concerns that regulations raise costs and create a regulatory nuisance for businesses.
  • Opposition groups to S.B. 1241, including the Sierra Club and ASHRAE, cited the benefits of energy benchmarking to consumers and the environment.
  • In April 2015, Arizona Governor Doug Ducey signed S.B. 1241 into law.

Brief sheet on the Arizona Department of Revenue's reinterpretation of tax law on third-party owned solar installations

Published June 2014
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published June 2014

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the essentials

 

  • In 2013 the Arizona Department of Revenue reinterpreted A.R.S §42-11054(C)(2) and A.R.S. §§ 42-14155(B)(C) to require third-party financed solar installations to be assessed a property tax. Homeowners, governments, businesses, and other entities that own their rooftop systems would continue to be exempt from property tax assessments.
  • Taxing leased systems would add roughly $150/year to system costs. The added cost is expected to be passed onto the solar equipment lessees.
  • During the most recent legislative session, some legislators proposed a bill codifying the DOR’s reinterpretation while others worked to exempt all solar panels from property taxation, regardless of how they are financed. However, neither position was codified.
  • Preliminary tax assessments will begin June 2015.

Arizona's Solar Rights Law

Published July 2013
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The essentials

  • Arizona law bars Homeowners’ Associations (HOAs) from “effectively prohibiting” the installation or use of a solar energy device (SED) within their jurisdiction.
  • Some “reasonable” restrictions on the placement of solar energy devices are allowed, but they must not “adversely affect” cost and efficiency. Whether a restriction or reasonable or adversely affects cost and efficiency is decided on a case-by-case in the courts.
  • Arizona is one of 22 states with solar rights laws. Arizona has a relatively stringent policy supporting homeowner’s solar rights, although some states are more stringent and much more explicit about the types of restrictions HOAs can impose on homeowners.

AZ tax incentives supporting links in the clean energy supply chain

Published March 2012
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The essentials

  • The Arizona state tax code supports the manufacturing and retail links in the state’s renewable energy supply chain.
  • A business income tax credit and a decreased property tax valuation encourage renewable energy product manufacturers to invest at least $25 million in headquarters and/or manufacturing facilities in Arizona.
  • Solar and wind energy retail sales and installations are encouraged by exempting such transactions from the transaction privilege tax, thus allowing for possible lower retail costs for consumers.

HB 2830 Energy and Water Savings Accounts for Schools, Cities, & Towns

Published March 2012
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The essentials

  • Governor Jan Brewer signed AZ State Rep. Amanda Reeve’s (R-6) bill HB2830 into law in April 2012.
  • Before bill HB 2830 was passed, the only state public institutions authorized to enter into performance contracts for energy efficiency projects were K-12 schools (see A.R.S. §15-910.02).
  • The HB 2830 additions expand performance contracting authority to public universities, towns, cities, and counties throughout AZ, and extend these institutions’ performance contracting authority to include renewable energy generation projects.
  • This policy provides risk management and financing solutions to government entities as they retrofit existing buildings for greater energy and water cost savings.

Arizona State Tax Incentives Encouraging Electricity Generation from Renewable Energy Sources & Impacting Renewable Energy Demand

Published March 2012
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The essentials

  • The Arizona state tax code provides incentives for the generation of electricity from utilities, corporations and residences.
  • These incentives are in the form of two property tax valuation adjustment policies and three tax credits
  • In addition, the code encourages a decrease in overall electricity demand by encouraging adoption of energy efficiency measures such as passive solar systems, insulation, and double-pane windows.

Algaculture Policy in Arizona

Published March 2012
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The essentials

  • Algaculture is the farming of algae to convert into biofuel or food products.
  • Algae are microscopic plants that use the natural photosynthesis process to create biomass, from which oil can be extracted.
  • AZ recently passed 2 algaculture laws that support the potential growth and advancement of the algaculture biofuel industry in the state.
  • As of July 2012, Congress is considering a provision in the 2013 U.S. defense budget that would prohibit the military from buying and using biofuels if costs are greater than costs for fossil fuels. This provision could hinder growth of the biofuel industry in AZ.