Solar Incentives and Financing in Arizona
Solar Incentives
What type of solar incentives are available?
What type of solar incentives are available?
There are several types of financial incentives available that can help you go solar. This section primarily covers the solar incentives available in Arizona, but you can learn more about national solar incentives here.
State tax credit
Arizona offers an individual tax credit of 25% of the cost of the installation of a solar energy system, capped at $1,000. The credit can be claimed when filing state taxes for the year when the installation occurred. If your state tax liability is under the amount of the credit, you can roll over the credit into subsequent tax years, up to five years from your installation. The credit is not available to taxpayers who lease solar systems or enter into power purchase agreements with third parties.
Federal tax credit
Homeowners who pay federal income tax are eligible for the federal Investment Tax Credit worth 30% of the cost of installing solar if the installation occurs between 2022 and 2032. (The credit decreases in 2033 before being phased out by 2035). This is a one-time nonrefundable credit that you receive when you file your federal taxes for the year you had your solar installed. For those with a federal tax liability less than the amount of the credit, the credit can be rolled over for as long as the credit is in effect (through 2034) to reduce future tax liability. Learn more about the federal tax credit and other national incentives here.
State property tax exemption
Installing solar adds value to your property. However, Arizona law exempts solar installations from increasing your property tax liability. Contact your county assessor for how and when to submit the proper paperwork to qualify for the exemption.
State sales tax exemption
Arizona offers a state sales tax exemption to registered sellers of solar and related equipment. City sales tax may still apply.
Local government incentives
The City of Mesa offers net metering for customers of the city’s municipal electric utility.
The City of Tempe offers a residential rebate program to refund permitting and some related fees.
Solar Financing
These banks offer solar-specific loans to finance solar installations in Arizona.
Marisol Federal Credit Union: https://www.marisolcu.org/loans/smart-e-solar-loans
Credit Union West: https://www.cuwest.org/borrowing/home-improvement-loans/solar-financing
Utility programs
Arizona Public Service
Arizona Public Service (APS) has a solar communities program that installs solar on qualified homes of limited to moderate income. The program provides a $50 monthly credit on your electric bill for 20 years. APS will own the solar panels and all of the power generated. While this may help some customers with the upfront cost of solar, studies show utility-owned rooftop solar programs disproportionately benefit utilities when compared to self-ownership of solar by customers.
Salt River Project
SRP offers customers who install solar a $250 rebate for smart thermostats. Smart thermostats can help you lower your energy use during times of high energy usage and in doing so, avoid expensive demand charges. The utility also offers a variety of other rebates for installing insulation, energy efficient AC units, and more that could help reduce your electric bill.
Tucson Electric Power
Tucson Electric Power’s GoSolar Shares Program is designed to help renters and homeowners who can’t install solar offset some of their traditional energy use by purchasing additional ‘shares’ of solar energy. Customers can buy shares of 150kWh of solar energy at $1.50 per share. TEP will use this additional funding to finance more large-scale solar projects. Crucially, this program is not designed to save customers money on their electric bill. Rather, it provides an easy and affordable method for someone to reduce their carbon footprint by purchasing shares of solar energy equal to what they consume from traditional energy sources.
TEP also offers a program called GoSolar Home. With GoSolar Home, customers can purchase energy from TEP‘s Raptor Ridge Solar Farm instead of having solar panels installed at home. With the GoSolar Home program, customers pay a fixed energy rate for 10 years. Customers’ fixed monthly price will be based on their current annual usage and may result in a slight decrease or increase in their electric bill. That fixed bill could save customers money compared to TEP’s other pricing plans if those rates increase in the future. GoSolar Home Program has limited slots and is not available for all customers.
Tucson Electric Power also offers rebates for a variety of energy efficiency measures.