Energy Incentive Programs, Arizona
Updated September 2011
What public-purpose-funded energy efficiency programs are available in my state?
In late 2009, the Arizona Corporation Commission adopted a landmark energy efficiency standard that requires utilities to achieve cumulative energy savings of at least 20% of retail energy sales by 2020. Arizona's restructuring law provides for a systems benefits charge (SBC) to fund energy efficiency programs. The SBC is collected through a non-bypassable surcharge on electricity bills. Some of these funds have been devoted to renewable energy programs, but in 2010 Arizona utilities budgeted almost $100 million to promote energy efficiency and load management in the state (including residential and low-income programs).
What utility energy efficiency programs are available to me?
Arizona Public Service (APS) offers incentives for an extensive list of prescriptive and custom equipment measures as well as for efficient whole building design for new construction. Program enhancements for 2011 include the following:
Significant increases in prescriptive incentive caps (to $150,000 + 50% of incentive over $150K for customers up to 100 kW monthly demand and $500,000 + 50% of incentive over $500K for customers > 100kW monthly demand), as well as higher custom and retro-commissioning incentive caps;
Two new programs — the Bid for Efficiency pilot program and incentives for motor repair and rewind;
New incentives for LED lighting, refrigeration equipment, window/building shade screens, heat pump water heaters, smart power strips, computer power management software, HVAC controls and sensors.
APS also offers the following incentives:
Tuition discounts to facilities staff and building owners for technical training sessions;
Incentives of up to 75% (maximum $12,000 per year) of the cost of installing a meter to enable use of their Energy Information Services online energy management tool;
Partial reimbursement for feasibility studies, design, and commissioning (including re- and retro-commissioning):
Express Solutions for small customers (average monthly demand of 400 kW or less) for specific lighting and refrigeration improvements. Participation in the program typically results in a return on investment of less than one year.
Tucson Electric Power (TEP) offers rebates (up to 75% of incremental cost for prescriptive measures and up to 50% of incremental cost on custom measures) for qualified energy-efficient equipment in retrofits or major renovation projects, including lighting equipment and controls, HVAC, motors, air compressors, refrigeration equipment and custom measures. For new construction projects, rebates for design assistance are capped at 50% of the additional cost for energy-efficient design (maximum $10,000 per design team per year). Rebates for energy-efficient new construction are capped at 50% of the incremental costs of the installed measures (maximum $75,000 per project per year).TEP and UniSource Energy Services also offer the Business Energy Advisor, which provides on-line facility energy audits to small- and medium-sized commercial customers.
The Salt River Project (SRP) offers its PowerWise™ Business Solutions program, which provides rebates for lighting, occupancy sensors, HVAC, and motor upgrades, as well as custom energy efficiency projects, such as compressed air systems.
Southwest Gas offers several programs for commercial and industrial customers:
The Combined Heat and Power Program, provides incentives of $400 to $500/kW for eligible projects that demonstrate a minimum of 60 to 70 percent efficiency.
The Commercial High-Efficiency Equipment Rebate Program offers up to 50% of the purchase price of new high-efficiency natural gas water heaters, griddles, steamers, fryers and combination ovens for existing facilities. Rebates are available on a first-come, first-served basis for purchases made through November, 2012 or until funds are depleted, whichever comes first.
The Large Commercial Energy-Efficient Boiler Program provides rebates for maintenance service and equipment to improve the efficiency of existing boilers, and for purchase of new efficient boilers (minimum 85% combustion efficiency),
UniSource offers incentives for installing energy-efficient lighting, heating, refrigeration, motors, variable speed drives, and various types of cooling equipment. Customized incentives are also offered for other energy efficiency projects. Unisource's Commercial Energy Solutions Programs offer both gas and electric programs.
What load management/demand response options are available to me?
APS offer the Peak Solutions demand response program, which provides payments to customers for allowing APS thermostat control to reduce air conditioning load during the "conservation period," from 12 p.m. to 8 p.m., on a few selected days during the summer (June through September). "Conservation periods" will last no longer than 6 hours each on any called event day. Payment is based on the amount of capacity (kW) and energy (kWh) reduction achieved during the program year.
SRP offers the PowerPartner demand response program for eligible (> 100kW) customers. SRP pays incentives for reducing load during peak events, which can be called during peak demand hours (noon to 8 p.m., June 1 through September 30) or occasionally during off-peak periods (5 a.m. to 9 p.m. year-round). An automated curtailment strategy is customized by SRP's curtailment service partner, Enernoc, to meet the facility's needs and then triggered by program calls. Enernoc assumes all performance risk.
What distributed energy resource options are available to me?
Arizona's Renewable Energy Standard (RES) requires that utilities obtain 15% of their portfolios from renewable energy by 2025; 30% of that amount (4.5% of total retail sales in 2025) must come from distributed generation.
The Database of State Incentives for Renewables and Efficiency (DSIRE) provides information on programs that offer incentives for renewable distributed generation. The following renewable and distributed energy incentive programs are relevant to federal customers:
The State of Arizona offers the Commercial/Industrial Tax Credit program, which provides an incentive of 10% of the installed cost of solar and wind installations in non-residential facilities. Government and other tax-exempt agencies are eligible to take advantage of the program by assigning the credit to a third-party organization that finances, installs or manufacturs the system; in exchange, the third party passes a percentage of the tax credit to the agency as a buy down or payment. The maximum credit is $25,000 for any one building in a single tax year and $50,000 in total credits per business per tax year. Eligible technologies include solar space heat, solar water heat, solar thermal electric, photovoltaics, wind, solar pool heating and daylighting.
Arizona Public Service (APS) offers incentives for customers on a first come, first served basis for on-site renewable energy systems installed in the APS service area. Incentives are offered for solar, wind, geothermal, biogas, biomass, hydro, and other distributed generation sources. Incentive amounts vary depending on the type of technology used, whether the incentives are up front or production-based and other factors. The Solar for Schools & Government program offers financial incentives for five solar technologies: solar electric, daylighting, water heating, space heating and space cooling.
The Salt River Project (SRP) sponsors EarthWise, which offers rebates of $1.35/watt DC for photovoltaic (PV) systems sized up to 30 kW, with a maximum payout of $40,500.The program for larger PV systems (30 kW and greater) operates under a production-based incentive (PBI) that provides customers a long-term fixed rate payment of $0.12 per kWh of metered generation for 20 years. The solar hot water program pays a one-time incentive of $0.45/kWh of metered first-year energy savings for solar water heating systems (up to $350,000). These incentives are effective through April 30, 2012; solar electric incentives will be reduced as total installed capacity increases. Check the Earthwise incentive levels page for the current schedule. To receive the incentives, customers must agree to let SRP take ownership of the renewable energy credits generated from their systems.
Tucson Electric Power and UniSource offer the Green Energy program for customers that are interested in renewable energy self-generation options (e.g., geothermal, biomass/bio-fuel, solar, hydro, and wind), as well as solar daylighting and solar hot water and space heating systems. Larger solar PV installations (greater than 50 kW) receive incentives (up to 50% of total system cost) under a performance-based incentives (PBI) structure on a 10- to 20-year payment agreement. Installations up to 50 kW receive up-front incentives of $1.50 per Watt DC under a 20-year renewable energy credit (REC) agreement. In exchange for the incentives, customers agree to assign RECs to the utility.
Trico Electric Cooperative's SunWatts Renewable Energy Program offers rebates for solar electric and small wind ($1.50/watt, up to 30% of total cost for systems up to 10 kW), solar water heating ($0.40/kWh saved in the first year), geothermal, biogas/biomass, combined heat and power, solar space cooling and solar daylighting. Systems between 10 kW and 1 MW receive performance-based incentives..As of June, 2011, the rebate funds were temporarily exhausted, but the program is accepting applications for a rebate reservation waiting list. The estimated wait time for receiving rebate funds is approximately 12 months from the date the reservation becomes wait-listed.
Are there energy efficiency programs sponsored by the state government?
No state energy efficiency programs are currently available to federal customers. For information on future opportunities, contact the state's Energy Office at the Arizona Department of Commerce.
What additional opportunities are available to me?
Federal customers whose utilities have area-wide supply contracts through GSA (e.g., Arizona Public Service and Tucson Electric Power), may be able to take advantage of 3rd-party financed energy efficiency projects called utility energy services contracts (UESCs). Information is available on GSA's Energy Center of Expertise Library Page. Federal facilities should contact their account executive to determine the level of each utility's participation.
NOTE: Energy efficiency funds and demand response programs are updated at least annually. Please contact the FEMP webmaster if changes are needed between updates.