Energy Incentive Programs, Arizona

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Updated February 2015

What public-purpose-funded energy efficiency programs are available in my state?

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. Although some of these funds have been devoted to renewable energy programs, in 2013 Arizona utilities budgeted over $160 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 rebates for an extensive list of prescriptive energy-efficient equipment measures including lighting, HVAC, IT equipment, motors, variable speed drives, refrigeration, and building envelope. APS will also pay $0.11/kWh (up to 75% of incremental project cost) for savings from custom projects.

APS also offers the following incentives:

  • Efficient whole building design rebates for the use of simulation modeling software can offset 50% of the cost of performance modeling (maximum $10,000);

  • Tuition discounts of up to 50% of energy-related technical training for facilities staff and building owners.;

  • Incentives of up to 75% (maximum $12,000 per year) of the cost of installing a meter to enable use of the utility's Energy Information Service (EIS) online energy management tool;

  • Partial reimbursement for audits, feasibility studies, design assistance, and commissioning (including re- and retro-commissioning);

  • Express Solutions offers small customers (average monthly demand of 100 kW or less) cost reductions for specific lighting and refrigeration improvements. Incentives may cover up to 90% of the project cost. Participation in the program typically results in a simple payback of less than one year.

Tucson Electric Power (TEP) offers small businesses reduced pricing on lighting, HVAC and refrigeration measures by working with an approved installation contractor through its EasySave Program. EasySave Plus offers large businesses cash rebates on lighting, air conditioning and heat pump equipment, motors and motor drives, compressed air systems, and refrigeration. Custom measures and the use of own installers are accepted for the EasySave Plus Program. Rebates are also available for using an approved energy simulation program in new construction. All programs are implemented by KEMA Services, Inc. on behalf of Tucson Electric.

The Salt River Project (SRP) offers its PowerWise™ Business Solutions program, which provides rebates for lighting, occupancy sensors, HVAC, motor upgrades and refrigeration equipment, as well as custom energy efficiency projects and retro-commissioning. The program also offers design assistance for energy efficient new construction projects.

Southwest Gas offers several programs for commercial and industrial customers:

UniSource offers gas and electric energy efficiency programs that provide incentives for installing energy-efficient equipment including lighting, controls, refrigeration, HVAC, water heaters, boilers, furnaces and commercial kitchen equipment.

What load management/demand response options are available to me?

APS offers the Peak Solutions demand response program, in which they work with customers in the Phoenix and Yuma areas to design load reduction strategies. Peak event pricing provides financial incentives to customers for allowing APS thermostat control in order to reduce air conditioning load. "Conservation periods" are from 12 P.M. to 7 P.M. on a few selected days during the summer (June through September) and last no longer than five hours each.

SRP offers the PowerPartner program, which pays incentives for reducing load during peak events and is a good fit for customers with demand greater than 200 kW. Peak events can be called on weekdays between 5 A.M. and 9 P.M. year-round. Events last from one to four hours with a maximum of 40 hours, five mandatory events, and five voluntary events each year. SRP's partner in the program, EnerNOC, works with the customer to identify automated curtailment strategies. Customers receive payment directly from EnerNOC and EnerNOC assumes all performance risk.

TEP's DemandSMART program is a year-round demand response program open to commercial, institutional and industrial customers who can reduce electricity load with a 30-minute notification. TEP compensates program participants for reducing electricity usage during peak demand events. Events can last for one to four hours and be called weekdays 11 A.M.-6 P.M. (May-October) and 7 A.M.-7 P.M. (November-April).

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 Solar Energy Tax Credit Program, which provides an incentive of 10% of the installed cost of solar 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 manufactures 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, solar pool heating and daylighting.

  • Arizona Public Service (APS) offers incentives for customers on a first-come, first-served basis for solar water heating. The incentive is $.30/kWh of first year expected savings (maximum $75,000 or 40% of systems cost, whichever is less). The Solar for Schools & Government program offers production-based incentives for solar electric (photovoltaic) technologies that are paid quarterly and reserved for the duration of the production contract with APS (15 or 20 years). The 15-year incentive pays $.09/kWh and the 20-year pays $.085/kWh.

  • The Salt River Project (SRP) Commercial Solar Electric Program currently (January 2015) offers an incentive of $.05/watt up to $15,000 for photovoltaic (PV) installations. Systems must be less than 1,000 kW (DC) and rebate amounts ratchet down in tiered steps as more of the available funds are allocated. To receive the incentives, customers must agree to let SRP take ownership of the renewable energy credits generated from their systems.

  • Trico Electric Cooperative's SunWatts Renewable Energy Program offers $0.40/kWh for energy saved in the first year for solar water heating.

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 Arizona Commerce Authority.

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 in GSA's Energy Division Library. Federal facilities should contact their account representative to determine the level of each utility's participation.

NOTE: Energy efficiency funds and demand response programs are updated at least annually.