As one of the sunniest states in the U.S., Arizona has seen some of the most impressive growth in solar installations in the country. When life gives you a beautiful desert, make solar energy. It’s easy with Arizona solar incentives and rewable energy programs described below. Contact us and your personal Energy Agent will guide you through the process.
Arizona Residential Solar Tax Credit: Residents of Arizona are reimbursed 25% of the cost of your solar panels, up to $1000, directly to your personal income tax the year you install your solar system.
Solar Energy Equipment Sales/Property Tax Exemption: Arizona residents are not required to pay any sales tax on equipment purchased for their solar energy systems. In addition, you are not required to pay additional property tax due to the value that is added to your home by the addition of your solar energy system.
Federal Income Tax Credit
The federal solar income tax credit is a, 30% of the total solar energy installation cost, tax credit. This federal solar income tax credit is available to both families and businesses. There are two important key understandings related to the federal solar income tax credit. The first is that money owed or paid to the IRS, can now be applied toward paying for your family or busineess, 25 -30 year, electric utility costs. The second is that a family or business must have the federal income tax liability, in which to apply the federal income tax credit. Tax liability can be an issue for those that are retired or some business situations. Even if you don’t have enough tax liability to claim the entire credit in one year, you can “roll over” the remaining credits into future years for as long as the tax credit is in effect. However, remember that if you sign a lease or PPA with a solar installer, you are not the owner of the system, and thus you cannot receive the tax credit. 2016 – 2019: The tax credit remains at 30 percent of the total solar installation cost of the solar energy system. 2020: The federal income tax credit will be reduced to 26 percent of the total solar installation cost of the solar energy system. 2021: The federal income tax credit will be reduced to 22 percent of the total solar installation cost of the solar energy system. 2022+: The federal income tax credit will be reduced to 0 percent of the total solar installation cost of the solar energy system for residential installations. The federal income tax credit will be reduced to 10 percent of the total solar installation cost of the solar energy system for any commercial installation. Owners of a new commercial solar energy systems can deduct 10 percent.
There have been some other recent developments in Arizona, too. If you're a customer of APS or TEP (Phoenix or Tuscon areas), your electric company might want to put solar panels on your roof for free. What's the catch? Well, the financial implications are less rosy than if you buy outright, but if you're a TEP customer, you can get solar for free and lock in your current rate for 25 years (subject to the terms outlined in the article linked here).