2025 Solar Incentives Guide for Drexel Heights, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Drexel Heights.
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.
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What Solar Tax Credits, Incentives, and Rebates are Available in Drexel Heights?
Solar and Wind Equipment Sales Tax Exemption
Residential Solar and Wind Energy Systems Tax Credit
Qualifying Wood Stove Deduction
Energy Equipment Property Tax Exemption
Trico Electric Cooperative - SunWatts Incentive Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" refers broadly to financial incentives that are in place to encourage the use of renewable energy by making installing and using solar panels more affordable. Solar incentives can include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the state of Arizona and some by your specific utility company, county or municipality. Categories of solar incentives include:
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Tax Exemptions: These could come in the form of property tax exemptions, which let you exclude the value added by your solar panels when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your Drexel Heights 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 credit is dollar-for-dollar, while in other areas you might receive a refund equivalent to a percentage of the value.
- Rebates: Rebates, or partial refunds after a purchase, are usually applied prior to any solar tax credits being calculated. Solar rebates might be given by your local utility company, by your county or by your state.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is probably the most well-known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of your solar system's cost.
The ITC applies to the value of solar panels installed on your primary or secondary residence in the United States. The solar panels must have been installed after January 1, 2006, on a property you own for you to be eligible for the credit. Originally, the ITC covered 30% of all system installation costs (panels, equipment, labor and accessories), although the total amount has fluctuated over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.
To understand exactly how much the ITC could save you, speak with your local Drexel Heights solar panel installation expert.
In August 2022, the Inflation Reduction Act expanded and extended the ITC, now called the Clean Energy Credit. Homeowners can now qualify for a credit of 30% of the total costs of solar system installation for projects that began after January 1, 2022, and will be finished by the end of 2032. The percentage will then begin to decrease yearly until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit applies to you, reach out to your local Drexel Heights solar installation expert.
State & Local Solar Incentives
Tax credits, rebates and more might be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. These incentives — which may be provided by the state of Arizona, or by your county or municipality — might be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Drexel Heights
Solar incentives might be offered by your local utility company, the federal government or the Arizona government. The large number of incentives available has contributed to a large increase in solar energy use in the last 15 years. Speak with your local solar panel installer today to learn more and to save the most money possible on a solar system for your Drexel Heights home.
EcoWatch's Drexel Heights, AZ Solar Incentives FAQs
How can I find out if I qualify for different solar incentives?
It's best to speak with your local Drexel Heights solar installer for a better understanding of which incentives your project will qualify for. Generally, solar incentives apply to new solar systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, such as those offered by the government of Arizona, might have additional requirements.
My home already has solar panels installed. Do I qualify for any incentives?
An excellent idea would be to talk to someone from the company that installed your solar panels – or call a local Drexel Heights solar installer — to clarify which incentives you might qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
Who installs solar panel systems near me?
To discover the top solar panel installation companies near you, read our article on the top solar companies in Drexel Heights.
What if I add solar panels to a rental property, vacation home or commercial property? Do I still qualify for incentives?
While we recommend talking to your local solar installer and/or tax professional to better understand what solar incentives apply to you, many will apply to a second home, so long as that home is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the specifics.
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.