2023 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 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Flagstaff?
Solar and Wind Equipment Sales Tax Exemption
Residential Solar and Wind Energy Systems Tax Credit
Qualifying Wood Stove Deduction
Energy Equipment Property Tax Exemption
Federal Residential Renewable Energy Tax Credit
The phrase "solar incentives" includes a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are provided by the Arizona government or by your utility company, county or municipality. Types of solar incentives might include:
- Net Metering: Make sure you speak with your Flagstaff utility company about signing a net metering agreement. This will allow you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You might receive either a dollar-for-dollar credit or a percentage of the value.
- Rebates: Solar rebates can be provided by your local utility company, or by your county or state. These rebates are essentially partial refunds that are applied after you pay for solar panels and before tax credits are calculated.
- Tax Exemptions: These may come in the form of property tax exemptions, which can let you exclude the value of your solar system when calculating the taxes you pay on your home. They may also include exemptions on sales tax at the time of purchase.
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when you think about solar incentives. A federal incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of the cost of your solar system.
The ITC applies to solar panels installed after January 1, 2006 on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost — for panels, accessories, labor and equipment — although it may range from 26-30%, depending on the installation date of your solar system. There is no cap on the amount you can claim.
To know exactly how much money the ITC could save you, talk to your local Flagstaff solar panel installer.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now dubbed the Clean Energy Credit. Now, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 may be eligible for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. The best way to fully understand how the new Clean Energy Credit applies to you is to reach out to your local Flagstaff solar panel installation expert with your questions.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more may be available at a more local level. These incentives may be offered by the Arizona government, or by your county or municipality. Some incentives may be ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Flagstaff
The expanding number of solar incentives available has enormously increased the use of solar power nationwide over the last 15 years. You might qualify for solar incentives from your local utility company, the Arizona government or the federal government. If you're prepared to switch over to solar energy, talking to your local Flagstaff solar panel installation expert is an excellent place to start.
EcoWatch's Flagstaff, AZ Solar Incentives FAQs
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