2023 Solar Incentives Guide for Avondale, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Avondale.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Avondale?
Solar and Wind Equipment Sales Tax Exemption
Residential Solar and Wind Energy Systems Tax Credit
Qualifying Wood Stove Deduction
Energy Equipment Property Tax Exemption
SRP - Solar Water Heating Program
Federal Residential Renewable Energy Tax Credit
The term "solar incentives" covers a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. The incentives may include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the state of Arizona and some by your utility company, county or municipality. Types of solar incentives might include:
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Avondale utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other areas you might get refunded a percentage of the value.
- Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, which is applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when calculating property tax for your house.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
- Rebates: Rebates, or cash back after a purchase, are normally applied prior to any solar tax credits being calculated. Rebates can be offered by your local utility company, by your state or by your county.
Federal Solar Incentives
When people think of solar incentives, federal incentives may be the first thing that comes to mind. A federal incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specified percentage of the cost of your solar system.
The ITC can be applied to solar panels installed on your primary or secondary residence in the United States. The solar system has to have been installed on a property you own after January 1, 2006 for you to claim the credit. The ITC initially covered 30% of all system costs (panels, equipment, labor and accessories), although the total amount has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
Curious how the ITC might apply to your specific situation? Reach out to your local Avondale solar panel installation expert to get more information.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. At this point, the credit percentage will decrease slightly each year until the program expires in 2035. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. The easiest way to fully understand how the new Clean Energy Credit will apply to you is to speak with your local Avondale solar panel installers directly.
State & Local Solar Incentives
In addition to those provided at the federal level, there are often also state solar incentives. Rebates, tax credits and more can be offered at a more local level. Incentives may be given by your county or municipality, or by the state of Arizona. Certain incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Avondale
You can apply for solar incentives from the federal government and the Arizona government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. We suggest talking to your local Avondale solar installer to learn more about these incentives and to be sure that you're getting the most money possible for your solar system.
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EcoWatch's Avondale, AZ Solar Incentives FAQs
Can I get any financial incentives when I add solar panels to a vacation home, rental property or commercial property?
While we recommend getting in touch with your local solar installer and/or tax professional to better understand what solar incentives apply to you, many incentives apply to a second home, as long as it is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the specifics.
How much will solar panels save me annually on my electric bill in Avondale?
After adding solar panels to your home in Avondale, you can anticipate savings of around $1,329.49 per year, or around $25,260.36 over the next 20 years.
What are the best solar panel installation companies near me?
To find the best solar panel installer in your area, check out our guide to Avondale's best solar panel companies.
What are some of the environmental benefits of switching to solar?
You can reduce your carbon footprint by 500 pounds of CO2 a year by installing solar panels. This adds up to around 11,000 pounds over 20 years. Solar is also a renewable energy source, meaning that making the switch reduces the drain on our planet's resources.
When does the federal solar tax credit end?
The Clean Energy Credit (previously referred to as the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.