Arizona homeowners benefit from various programs and incentives that make solar energy affordable. These include the AZ solar tax credit, rebates, and net metering programs that reduce installation costs and increase long-term savings.
In this guide, we explore Arizona solar incentives by looking at the following:
- Arizona solar tax credit
- Federal solar investment tax credit (ITC)
- Utility company solar rebates & programs
- Leasing solar pool heating systems
- Net metering & solar buyback programs in Arizona
- How to take advantage of solar incentives
Read on to learn about the key solar incentives in Arizona and discover how to save money powering your everyday life.
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At Celestial Solar, we provide solar panel installation and maintenance services to homeowners and businesses. As the sole factory-authorized distributor in Southern California, Nevada, Arizona, and Florida for ISwim pool heating panels, as well as many solar electric panels and inverters, we’ve offered the best quality products and service since 2001. Contact us today for more information.
Arizona Solar Tax Credit
Arizona’s solar incentives include a state tax credit. This credit helps offset the cost of solar panel installation, making renewable energy available to more households. Here’s how the Arizona solar tax credit works:
- A 25% credit on solar panel system costs. Homeowners can claim a tax credit equal to 25% of the cost of their qualifying solar panel purchase (up to $1,000).
- This credit is non-refundable. When you claim the credit, you can only lower your tax liability to $0, and you won’t receive a refund beyond that. However, if you can’t use the entire credit in one tax year, you can carry the remaining amount forward for up to 5 years.
- Applicable to residential solar panel systems. To qualify for this credit, you must install the solar panel on your primary residence. You can’t claim it for systems installed on secondary homes, rental properties, or commercial properties.
- Arizona doesn’t charge a sales tax on solar panels. The state exempts solar panels from sales tax, reducing your upfront costs and making the investment more affordable.
Federal Solar Investment Tax Credit (ITC)
Homeowners installing solar panels can also benefit from the federal solar tax credit, reducing the cost of their investment. The ITC includes:
- A 30% credit on the total cost of installation. The tax credit, which lasts through 2032, applies to the total cost of the system. This includes equipment and installation costs.
- Applicable to commercial and residential installations. The credit is available to homeowners and businesses, promoting broader solar energy use.
- Can be combined with Arizona’s state tax credit for maximum savings. Homeowners can use the credit alongside the AZ solar tax credit to maximize their savings.
- Must have sufficient tax liability to claim the credit. Taxpayers must have enough federal tax liability to offset the credit amount. Like the state credit, it’s nonrefundable. However, homeowners can carry the unused portion forward to future tax years. Ask us about power purchase agreement (PPA) options if you do not have sufficient tax liability.
Utility Company Solar Rebates & Programs
Several utility companies throughout Arizona provide additional solar incentives to encourage adoption. These include:
- Salt River Project (SRP). The company offers rebates for battery storage systems.
- Tucson Electric Power (TEP). This company offers incentives for energy storage and demand response programs.
- Arizona Public Service (APS). Customers who install solar panels can benefit from time-of-use plans and solar-friendly rate structures.
The rebates and incentives you have access to depend on your location and utility provider. Check eligibility before installing a solar panel system.
Leasing Solar Pool Heating Systems
Leasing a solar pool heating system can be a smart option with a lower upfront cost. With a lease, homeowners pay a monthly fee for Celestial Solar to install, maintain, and service the system. This allows homeowners to enjoy the benefits without a large initial investment. While buying may bring long-term savings and benefits like tax credits, leasing can make solar pool heating more accessible and budget-friendly from day one.
Net Metering & Solar Buyback Programs in Arizona
Arizona ended traditional net metering, but homeowners can still benefit from solar buyback programs to maximize solar panel affordability. Understanding your utility’s solar export rate helps determine long-term savings. For example, many utility companies credit homeowners for excess energy sent back into the grid from their solar panel system.
Additionally, you may be able to roll over this compensation, which typically ranges between 7-10 cents per kWh, to offset future bills. However, this depends on your utility company’s policies.
How to Take Advantage of Solar Incentives
To maximize savings, homeowners should:
- Consult a solar provider. Each utility company sets its own rules for how or whether it incentivizes solar panel installation through tax credits and rebates.
- Calculate potential savings. Use online incentive and rebate estimators to estimate your solar panel installation costs.
- Work with certified installers. Only work with professional installation companies to ensure you meet state and federal requirements.
- Keep all receipts and documentation. Maintain careful records of your purchase to claim tax credits when filing.
Maximize Your Arizona Solar Incentives—Talk to Our Experts Now!
With the best quality products and services since 2001, Celestial Solar helps you make the best investment in your home’s energy efficiency. Our solar pool heating panels are proudly made in the U.S.A. and comply with state and federal standards. Contact us today to learn about our solar electric panel services.
