The Arizona legislature has passed a bill that will help the state foster the development of a fledgling renewable energy industry in the US state. The bill, SB 2370, is in effect from 2011 to 2026.

The bill creates individual and corporate income tax credits for research and development, production and delivery system costs associated with solar liquid fuels. It also specifies that qualified research include only research conducted in Arizona, including research conducted at a university and paid for by the taxpayer.

The bill also stipulates that in the years 2011-2021, the tax credit will be up to 40% of the qualified research and development expenses, while in years 2016-2026 it will provide a credit of 11 cents per BTU (British Thermal Unit) of solar liquid fuels produced in Arizona.

For costs incurred to modify existing fuel stations for retail sale of the solar liquid fuels and (years 2016-2026) up to 30 percent of the costs and and/or up to $20,000 per year per service station will be credited.

Gary Dirks, director of LightWorks, an initiative at Arizona State University (ASU) focused on solar-based energy and other light-inspired research, said: “The tax credits are a definite incentive that will help spur research and development of solar liquid fuel and attract firms interested in producing those fuels, as well as those supplying related technologies.”

“It will help support ASU’s research activities in this area and the university, in turn, will help the state become a magnet for the best companies and people in the world who are looking to develop and advance new energy.”

A proposal has been submitted by a national team of researchers led by Dirks, former president of BP Asia-Pacific and BP China, and ASU to the US Department of Energy to create an Energy Innovation Hub, which partners include Sandia National Laboratories, Princeton University, Yale University and the University of Minnesota.

The Hub will explore the research and development of fuels from sunlight and will support cross-disciplinary research and development focused on the barriers to transforming energy technologies into commercially viable materials, devices and systems.

The project called LightSpeed Solutions aims to provide the technical basis for the generation of fuels that are derived not from oil, but from combining carbon dioxide, water and sunlight, in addition to provide safe energy production alternatives that are carbon neutral and can be produced in the US.

Mr Dirks said that passage of the Arizona energy bill makes ASU a stronger candidate for the Hub grant, which would bring $122 million to the university and the state over five years.

“With the state and the university aligned and working together, Arizona will be positioned as the favored place for research and development, commercialization and production of liquid to solar fuels,” Mr Dirks said.