2025 Solar Incentives Guide for Cottonwood, AZ - Tax Credits & Rebates

In this guide, we'll cover the latest solar incentives and rebates available in Cottonwood.

You'll learn about:

  • Local & State Solar Incentives
  • Federal Tax Credits (Updated for 2024 and beyond)
  • Ways to optimize your solar investment

Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Cottonwood solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated January 24, 2025

Why you can trust EcoWatch

We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

What Solar Tax Credits, Incentives, and Rebates are Available in Cottonwood?

Solar and Wind Equipment Sales Tax Exemption

Incentive Type:
Sales Tax Incentive
100% of sales tax on eligible equipment

Residential Solar and Wind Energy Systems Tax Credit

Incentive Type:
Personal Tax Credit

Qualifying Wood Stove Deduction

Incentive Type:
Personal Tax Deduction
Total cost, exclusive of taxes, interest and other finance charges

Energy Equipment Property Tax Exemption

Incentive Type:
Property Tax Incentive
100% of increased value

Federal Residential Renewable Energy Tax Credit

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

Source: https://www.dsireusa.org/


Solar incentives are designed to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. You may be eligible for various kinds of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the state of Arizona and others from the federal government. Some solar incentives you might qualify for are:

  • Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you have a net metering agreement with your Cottonwood utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other areas you might receive a refund equivalent to a percentage of the value.
  • Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar system. Property tax exemptions allow you to exclude the value that your solar panels add when calculating how much property tax you need to pay.
  • Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
  • Rebates: Rebates, or partial refunds after a purchase, are usually applied before any solar tax credits are calculated. Solar rebates may be offered by your local utility company, by your state or by your county.
Advertisement

Best for Leasing

Sunrun

★★★★★
4.0
  • Expansive service area
  • Many financing options
  • Some reported issues with customer service
  • Some reported issues with door-to-door sales

Federal Solar Incentives

When someone says "solar incentives," you likely think of federal incentives first. An incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a certain percentage of your solar system's cost.

The ITC applies to the total cost of solar panel installation, including the panels themselves as well as equipment, labor and accessories. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence located in the United States that you own. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.

Have questions about how the ITC applies to your specific situation? Contact your local Cottonwood solar panel installation expert to get more information.

In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit runs until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit. This amount will be decreased slightly on a yearly basis until the current program ends. 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. Your local Cottonwood solar panel installers are the best people to answer your questions about the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

There are often also state solar incentives in addition to those provided by the federal government. Tax credits, rebates and more might be available at a more local level. Incentives may be provided 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 Cottonwood

You can receive solar incentives from the Arizona government and the federal government, as well as from your local utility company. Growing availability of solar initiatives over the last 15 years has helped increase nationwide solar energy use enormously. If you're ready to make the switch to solar energy, getting in touch with your local Cottonwood solar panel installation expert is an excellent place to start.

EcoWatch's Cottonwood, AZ Solar Incentives FAQs

Who installs solar panels near me?

To find the right solar panel installer for you, check out our guide to the top solar companies in Cottonwood.

If I switch my appliances out for ones that can utilize solar energy, are there any credits that I can claim?

The new Inflation Reduction Act provides several incentives designed to reward homeowners for making eco-friendly upgrades. Some incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.

Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?

Yes, you can receive both rebates and tax credits towards the cost of your solar panels. Depending on which incentives you are receiving, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to confirm that you are claiming the correct incentives and getting the most money possible.

Can I use a combination of solar and another type of renewable energy to power my home?

You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Be sure to go over your plan with your local Cottonwood solar installation expert. They can help you as you plan for your project and also help you understand the various incentives that you might or might not qualify for.

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.

Follow us