Copy of TEP - Renewable Energy Credit Purchase Program

September 01, 2010


Note: Tucson Electric Power filed a request with the Arizona Corporation Commission to reduce incentive levels to prevent a premature exhaustion of program funds for photovoltaic installations. The Commission issued a ruling on August 25, 2010, authorizing a reduction in the incentive levels. This summary includes the new incentive levels as approved by the Commission. Tucson Electric Power (TEP) created the SunShare Program in 2001 to encourage residential and business customers to install new photovoltaic (PV) equipment. TEP transitioned away from their original incentive structure for PV and added incentives for a variety of other technologies in May 2008 under the new Renewable Energy Credit Purchase Program (RECPP). The technologies now eligible for funding through the RECPP all qualify under Arizona's renewable energy standard (RES). TEP offers these incentives in exchange for the renewable energy certificates they generate. Incentives for the 2010 program year are as follows:

  • Residential PV (grid-tied): $2.00/W up front for qualified systems. Systems with less than a 20 year warranty on the module or a 10 year warranty on the inverter, or with a building-integrated PV (BIPV) system over 5kW must receive the 10, 15 or 20 year performance-based incentive (PBI) which is based on the actual metered electricity output.
  • Residential PV (off-grid): $2.00/W
  • Non-Residential PV (100 kW or less): $1.75/W for the first $2.0 million of funds awarded on or after July 7, 2010; $1.50/W for rebates awarded after the first $2.0 is exhausted for 2010. Systems greater than 100kW must take the PBI
  • Solar Domestic Water Heating and Solar Space Heating: $0.25/kWh equivalent, plus $750 up to a maximum incentive of $1,750.
  • Non-Residential Solar Water Heating and Solar Space Heating: $0.50/kWh-equivalent, plus $750
  • Daylighting (Non-residential only):$0.18/kWh equivalent for 5 years.
  • Wind (grid-tied, up to 1 MW):$2.25/W-AC
  • Wind (off-grid, up to 1 MW): $1.80/W-AC
  • On-grid small hydro, biomass-biogas systems, pool heating (non-residential only), space cooling, and geothermal (electric, cooling and heating systems) are all eligible to receive PBIs. See program website for full details including contract options, equipment requirements and PBI amounts.

Program Overview

Implementing Sector: Utility
Category: Financial Incentive
State: Arizona
Incentive Type: Rebate Program
Web Site:
Administrator: Tucson Electric Power
Start Date:
Eligible Renewable/Other Technologies:
  • Solar Water Heat
  • Solar Space Heat
  • Geothermal Electric
  • Solar Photovoltaics
  • Wind (All)
  • Biomass
  • Landfill Gas
  • Daylighting
  • Solar Pool Heating
  • Wind (Small)
  • Hydroelectric (Small)
  • Anaerobic Digestion
Incentive Amount: Up-front incentives for PV may be de-rated based on expected performance
Residential grid-tied PV (after 8/11/10): $2.00/W-DC
Residential off-grid PV: $2.00/W-DC
Non-Residential PV (100 kW or less):$1.75/Watt DC for the first $2.0 million of funds; $1.50/Watt DC for remaining funds.
Non-Residential grid-tied PV (more than 100 kW): production-based incentive
Wind (grid-tied): $2.25/W-AC
Wind (off-grid): $1.80/W-AC or a performance-based incentive
Daylighting (non-residential only): $0.18 per kWh savings for 5 years;
Residential Solar Water Heater: $0.25/kWh-equivalent, plus $750 up to a maximum amount of $1,750
Non-Residential Solar Water Heater: $0.50/kWh-equivalent, plus $750
Non-Residential Solar Water Heater: performance base incentive;
All other eligible technologies can receive performance based incentives which vary depending on the technology and the length of the contract. Contract options for performance-based incentives are 10, 15 and 20 years.
Maximum Incentive: Residential PV systems greater than 20 kW AC will receive rebates on the first 20 kW AC only
TEP incentive for PV can not exceed 60% of the total project cost.
TEP incentive for PV may be combined with other state and federal incentives, but combined they can not pay for more than 85% of the total project cost
Eligible System Size: PV: Minimum size is 1.2 kW.
Equipment Requirements: Photovoltaic modules must be covered by a manufacturer’s warranty of at least 20 years to qualify for the up-front incentive.
SWH systems must be certified to SRCC OG-300 standards
Eligible small wind systems must be certified and nameplate rated by the CEC.
Wind systems must have at least a 10-year manufacturer’s warranty to qualify for the up-front incentive; wind systems must have at least a 5-year manufacturer’s warranty to qualify for the performance-based incentive
Ownership of Renewable Energy Credits: TEP


Name: Blanka Anderson
Organization: Tucson Electric Power
Address: 3950 E. Irvington Road
Tucson AZ 85702
Phone: (520) 918-8296

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.