July 10, 2010 | By Keith Martin in Washington, DC

Arizona enacted two measures in May to encourage use of renewable energy in the state.

One extends an existing investment tax credit for 10% of the cost of solar energy devices installed in commercial and industrial settings for another six years through 2018. The credit is limited to $25,000 per building and $50,000 per taxpayer per year.

Another allows production tax credits 1¢ a kilowatt hour to be claimed on electricity generated from wind and biomass projects and 4¢ a kilowatt hour to be claimed on solar electricity, with the solar amount decreasing to 1¢ over the period the credits are claimed. The credits run for 10 years after equipment is put into service. They apply to equipment installed after this year. Taxpayers must apply to the state for an allocation. There are only $20 million in total credits available to allocate per year. No more than $2 million in credits may be claimed per project. The project must be at least five megawatts in size. Although a company must apply for credits each year, once it is put on the list, it will receive credits for the full 10 years.

The measures are HB 2700 and SB 1254. The governor signed both in early May.