2025 Solar Incentives Guide for Flagstaff, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Flagstaff.
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 Flagstaff?
Energy Equipment Property Tax Exemption
Residential Solar and Wind Energy Systems Tax Credit
Qualifying Wood Stove Deduction
Solar and Wind Equipment Sales Tax Exemption
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives encourage homeowners to switch their home over to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. Solar incentives can include cash back, upfront discounts or credit towards your monthly 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. Some broad categories of solar incentives include:
- Tax Exemptions: Tax exemptions can come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when paying property tax on your house.
- Rebates: A solar rebate is a partial refund after the purchase of your solar panels. These could be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the total amount of tax you owe the federal government. Tax credits are different from tax deductions.
- Net Metering: You may be able to sign a net metering agreement with your Flagstaff utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then deduct this value from your monthly utility bill.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is the best-known federal solar incentive. The ITC provides a tax credit for a set percentage of your solar system's cost.
The ITC was originally for 30% of the cost of solar system installation, although it has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC applies to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
To better understand exactly how much the ITC could save you, talk to your local Flagstaff solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). With the new provisions, solar installation projects that are completed between 2022 and 2032, can qualify for a 30% tax credit. This percentage will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. The program expansion also makes credits for energy storage systems even easier to claim, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Flagstaff solar panel installation expert is the best person to answer your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Rebates, tax credits and more can be provided at multiple levels. Along with federal solar incentives, there are often state and local ones, too. Incentives might be offered by the state of Arizona, or by your county or municipality. Certain incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Flagstaff
Solar energy use nationwide has gone up tremendously in the last 15 years, in part thanks to the growth in the number of solar incentives. You can obtain these incentives from the federal government, the Arizona government or your local utility company. We recommend talking to your local Flagstaff solar installer to learn more about these incentives and to be sure that you're getting all the money you can for your solar system.
EcoWatch's Flagstaff, AZ Solar Incentives FAQs
How do I know if I qualify for different solar incentives?
Typically, solar incentives apply to:
- a new solar system
- installed on property that you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including ones handled by the Arizona government or by your county/municipality, could have additional qualifications. Talk to your local Flagstaff solar installer to find out what incentives your project may qualify for.
How much will a solar system save me on my electric bill in Flagstaff annually?
After adding solar panels to your home in Flagstaff, you can anticipate savings of about $1,226.83 per year, or approximately $23,309.69 over 20 years.
Who installs solar panel systems near me?
To find a top-rated solar panel installer, check out our guide to the best solar companies in Flagstaff.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any benefits I can get?
The recently passed Inflation Reduction Act includes provisions for 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 use solar and another type of renewable energy in combination to power my home?
Yes, you can employ multiple types of renewable energy to power your home, such as a combination of solar and geothermal. You can also combine renewable energy generation with a backup source of non-renewable energy. Make sure that you discuss your plan with your local Flagstaff solar panel installer, so that you understand what you'll need and what kinds of incentives you may or may not qualify for.
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