![](https://arizona.sempersolaris.com/wp-content/uploads/2023/08/SMP-PHX-Hoth-Infographic_Top-Header-3.png)
Share this:
A Homeowners guide to going solar.
A Homeowners guide to going solar.
![](https://arizona.sempersolaris.com/wp-content/uploads/2023/08/Icons_1.png)
What Are Arizona Tax Incentives?
- Arizona offers various tax incentives and credits to make solar power installations more affordable for both residential and non-residential setups
- Financial incentives provided are divided between residential and non-residential installations
- Incentives include personal tax credits, corporate tax credits, sales tax exemptions, and property tax exemptions
- It is worth noting that these programs’ specifics might change over time and vary depending on the scale and type of installations.
![](https://arizona.sempersolaris.com/wp-content/uploads/2023/08/Icons_2.png)
Residential Solar Incentives in Arizona
Homeowners in Arizona can access several financial incentives to install solar power systems.
- Residential Solar and Wind Energy Systems Tax Credit: This personal tax credit offers 25% of the cost of solar and wind energy systems, up to a $1,000 maximum
- Solar Hot Water Heater Plumbing Stub Out and Electric Vehicle Charging Station Outlet Credit: Arizona offers a $75 nonrefundable individual and corporate income tax credits for installing these energy-efficient systems
- Solar and Wind Equipment Sales Tax Exemption: 100% of the sales tax on eligible equipment is exempted, and the equipment includes photovoltaics, solar water heat, solar space heat, and more
- Energy Equipment Property Tax Exemption: This exemption applies to the increased value of the property from installing renewable energy systems
![](https://arizona.sempersolaris.com/wp-content/uploads/2023/08/Icons_3.png)
Non-Residential Solar Incentives in Arizona
For non-residential installations, Arizona provides several tax incentives and
credits to promote the adoption of renewable energy.
- Non-Residential Solar & Wind Tax Credit: Businesses can get up to
$25,000 credit for any one building in the same year and a total credit of $50,000 per business in any year - Renewable Energy Production Tax Credit: This incentive offers a Corporate Tax Credit for electricity produced by certain eligible renewable systems over a ten-year period
- Renewable Energy Business Tax Incentives: Aimed at drawing renewable energy product manufacturers to Arizona, this tax credit is up to 10% of the investment amount
![](https://arizona.sempersolaris.com/wp-content/uploads/2023/08/Icons_5.png)
Federal Solar Investment Tax Credit (ITC)
- Residential solar panels installed by December 31, 2032, are eligible for a 30% tax credit
- The ITC rolls over up to five years if the credit is greater than your owed taxes
- The average 11.5 kW system could yield around $9,000 in tax credits In 2022, thanks to the Inflation Reduction Act, the tax credit was increased from 26% to 30% of the system value
- The ITC schedule is: 30% of your total system value for installations between 2022 and 2031, 26% for installations in 2032, and 22% for installations in 2033
![](https://arizona.sempersolaris.com/wp-content/uploads/2023/08/Icons_4.png)
Local Solar Incentives in Arizona
- Several local incentives and rebate programs are available depending on your utility and the type of solar system installed
- Examples include the APS Residential Battery Pilot program, MEC SunWatts Renewable Energy Incentive Program, and the Salt River Project Demand Management System Rebate
![](https://arizona.sempersolaris.com/wp-content/uploads/2023/08/Icons_13.png)
Net Billing in Arizona
- Arizona has replaced net metering with net billing, where excess energy produced by your solar panels is credited at less than the retail rate
- The rate varies by your utility and its electricity rates
- Despite being less beneficial than net metering, net billing still offers substantial savings on energy bills
![](https://arizona.sempersolaris.com/wp-content/uploads/2023/08/Icons_6.png)
Eligible Technologies for Solar Incentives
- Photovoltaics
- Solar water heat
- Passive solar space heat
- Solar space heat
- Wind
- Solar ovens
- Solar cooling
- Solar pool heating
- Daylighting
![](https://arizona.sempersolaris.com/wp-content/uploads/2023/08/Icons_11.png)
Cost and Savings
- The average cost of solar panels in Arizona, before tax credits or rebates, is around $18,000 to $22,000 for a standard 6kW system
- You can typically expect to pay around $2.81 per watt as of 2021
- The cost of solar panels has been decreasing, making solar power more accessible to Arizona homeowners
- Going solar can significantly reduce or even eliminate your monthly electricity bills
- On average, Arizona homeowners with solar power systems save around $100 to $150 on their monthly electricity bills
- With tax credits, incentives, and energy savings, most homeowners recoup their investment in 7 to 8 years
- Over the lifetime of a solar panel system (25+ years), homeowners can save tens of thousands of dollars
- Exact savings amounts will depend on the size and efficiency of your system and your household’s energy usage
![](https://arizona.sempersolaris.com/wp-content/uploads/2023/08/Icons_12.png)
Advantages of Going Solar in Arizona
Expanding solar power usage in Arizona holds numerous potential benefits.
- Encourages the use of renewable energy
- Lower carbon footprint
- Reduces reliance on non-renewable resources
- Lowers average monthly electricity bills
- Enables storage of excess energy for future use
- Stabilizes energy prices
- Can increase property value
- New jobs and industries created
- Decreases dependence on foreign energy sources
![](https://arizona.sempersolaris.com/wp-content/uploads/2023/08/Icons_8.png)
Potential Increase in Property Value and Tax Exemptions
- Homes equipped with solar power systems have been shown to increase in value
- Studies suggest that homeowners can expect an increase in property value by approximately $20,000 for every 5 kilowatts (kW) of solar installed
- Solar installations can enhance the marketability of a home, making it a worthwhile long-term investment
- In Arizona, solar panels are eligible for a property tax exemption, so if your solar panel system increases the value of your
![](https://arizona.sempersolaris.com/wp-content/uploads/2023/08/Icons_7.png)
Understanding Tax Credit Forms
- Use Arizona Form 310 to enter the value of solar energy devices
- Calculate 25% of the entered value and limit to $1,000
- Consolidate tax credits using Form 301
- Final credit value is entered on forms 140, 140PY, 140NR, or 140X, depending on individual situations
![](https://arizona.sempersolaris.com/wp-content/uploads/2023/08/Icons_10.png)
Understanding Corporate Tax Credit Applications
- To qualify for tax credits, businesses must submit an application to the Arizona Commerce Authority (ACA)
- The application process may vary based on the type of business and energy technology used
- Familiarize with the application process for an efficient tax credit application
![](https://arizona.sempersolaris.com/wp-content/uploads/2023/08/Icons_9.png)
Arizona Solar Power vs. Traditional Electricity Sources
- The use of solar power helps reduce greenhouse gas emissions and our reliance on non-renewable energy sources
- Solar power is a clean source of energy unlike other electricity sources like fossil fuels
- Moving to solar energy saves money and contributes to the fight against climate change