Renewable Energy Tax Credit for International Operations Centers (Personal)

June 02, 2023

Summary

S.B. 1484 of 2014 provides a tax credit for new renewable energy systems that produce energy for self-consumption and are used primarily for manufacturing. H.B. 2670 of 2015 expanded this credit to include renewable energy systems that produce energy for self-consumption by “international operations centers.” H.B. 2528 of 2017 removes eligibility for manufacturers beginning in 2018.

Eligible systems must have a capacity of at least 20 megawatts (MW) or have a typical annual generation of at least 40,000 megawatt-hours (MWh). The tax credit is worth $5 million per year for five years for each facility. 

Taxpayers must first apply to the Department of Revenue on a form prescribed by the Department. The Department will pre-approve taxpayers on a first-come, first-served basis until it has pre-approved a total of $10 million credits in each year. Program guidelines and application for pre-approval of the credit are available here

International Operations Centers

To qualify as an international operations center, the owner or operator must make a minimum annual investment of $100 million in new capital assets in each of ten consecutive years. Investments greater than $100 million in any taxable year may be carried forward as a credit toward the investment requirements of subsequent years. On or before the tenth anniversary of certification as a international operations center, the owner or operator must make a total investment of at least $1.25 billion in new capital assets. In order to qualify for a tax credit, the international operations center must invest at least $100 million in new renewable energy facilities. By the fifth year the system is in operation, at least 51% of the energy must be used onsite.

For the purposes of this tax credit, renewable energy includes a variety of biomass resources, solar thermal electric, solar photovoltaics, and wind. 

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: Arizona
Incentive Type: Personal Tax Credit
Web Site: http://www.azdor.gov/TaxCredits/RenewableEnergyforSelfConsumption.aspx
Administrator:
Start Date: 07/24/2014
Eligible Renewable/Other Technologies:
  • Solar Thermal Electric
  • Solar Photovoltaics
  • Wind (All)
  • Biomass
  • Landfill Gas
  • Anaerobic Digestion
  • Fuel Cells using Renewable Fuels
Incentive Amount: $5 million per year for five years for each renewable energy facility
Maximum Incentive: $5 million per taxpayer per year;
Aggregate cap of $10 million per year for all taxpayers combined
Eligible System Size: Systems must be at least 20 MW or a typical annual generation of at least 40,000 MWh;

International Operations Centers: The taxpayer must make a minimum investment of $100 million in new renewable energy facilities
Equipment Requirements: International Operations Centers: By the fifth year the system is in operation, at least 51% of the energy must be used on-site
Carryover Provisions: Excess credit may be carried forward for up to 5 years

Authorities

Name: A.R.S. § 43-1083.04
Date Enacted: 04/11/2014
Effective Date: 07/24/2014
Expiration Date: 12/31/2025
Name: H.B. 2528
Date Enacted: 05/10/2017
Effective Date: 12/31/2017

Contact

Name: AZ Department of Revenue
Address: 1600 West Monroe St.
Phoenix AZ 85007
Phone: (602) 255-3381

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.