Sales Tax Exemption

devices and for the installation of solar energy devices by contractors. “Solar energy device” is defined to include wind electric generators and wind-powered water pumps in addition to daylighting, passive solar heating. Active solar space heating, solar water heating and photovoltaics. The exemption does not apply to batteries, controls, etc., that are not part of the system.

A solar energy retailer or solar energy contractor must register with the Arizona Department of Revenue prior to selling or installing solar energy device in order to take advantage of the exemption. The Arizona Department of Commerce Energy Office has compiled a guide to the solar energy devices that qualify for exemption.

In 2012, the exemption was extended to the sale of renewable energy credits (RECs). RECs are typically sold by a renewable energy generator to a utility company so that company can demonstrate its compliance with the state’s renewable energy standard.