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Solar incentives divide Valley small businesses

PHOENIX — With the price of oil reaching record levels, federal and state lawmakers have started to put major emphasis on research for alternative means of energy.

In Arizona, where we average 325 days of sunlight a year, much of the focus has been turning to solar energy as the state has been implementing solar energy requirements for commercial buildings. At an average cost of $210,000 dollars per solar energy unit, many businesses simply cannot afford to meet the standards required of them.

So in order to encourage the use of solar power and facilitate the process of meeting the solar standards, the state and federal government are offering a variety of financial incentives for business that are going green.

This works well for small companies that are large enough to afford it. But many businesses who can’t are outraged by the use of their tax dollars.

At a recent seminar on sustainability hosted by a local utility company, business owners in the Valley had mixed reactions to the incentives. Some were generally happy with the help they were receiving to go green, while others who couldn’t afford the cost of solar panels were outraged by the fact that their tax dollars were going to pay for their competitor’s installation.

At times, it seemed like the seminar hosted by Arizona Public Service Co. was more of a debate.

“Everyone wants to use solar energy these days,” says Saba Arzanzarrin, vice president of operations for Micor Communications Inc. in Scottsdale, a valley subcontractor for Cox Communications. “What people don’t understand is that solar costs a lot of money.”

To combat the high cost of installation, the state of Arizona offers to pay for 10 percent of the installation cost or as much as $25,000 for one building and $50,000 for two, according to the Interstate Renewable Energy Council website. The Valley’s largest power distribution companies, APS and Salt River Project, offer similar rebates as well.

In addition, if the property meets certain federal requirements, the owner is entitled to deduct 50 percent of the adjusted basis of the property for taxes in 2008. Companies are also entitled to deduct 100 percent of the sales tax on eligible equipment, and APS and SRP are offering similar programs that give discounts for different amounts depending on the watts put out by the solar energy system.

“There are a lot of incentives,” says Joe Arpaia, a spokesman for Vertical Mapping Resources, a company in Scottsdale that provides high resolution aerial photography for clients throughout the United States. “But there are also a lot of regulations that need to be met.”

To meet the statewide, commercial buildings must derive 30 percent of their energy from renewable energy sources by 2012, according to the IREC website.

The state has also been considering requiring net metering systems. Net metering records the amount of re-usable energy and credits the company based on amount of energy used at a given rate. While meeting the standards may prove challenging for some businesses, using the incentives in place should help facilitate the process for some companies.

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>>Email the editor at aklaw@zoniereport.com.