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
Solar installers are experts in maximizing your solar tax credits and rebates.
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Updated May 04, 2023
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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
Source: https://www.dsireusa.org/
Solar incentives are intended to encourage people to switch to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. You might qualify for several kinds of incentives, such as cash back, discounts or monthly utility bill credits, 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. You might qualify for any of the following types of solar incentives:
- Net Metering: Be sure to speak to your Flagstaff utility company about signing a net metering contract. This will allow you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You may receive either a dollar-for-dollar credit or a percentage of the value.
- Tax Exemptions: These could come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when paying taxes on your house. You may also qualify for an exemption on sales tax at the time of purchase.
- Rebates: Solar rebates can be provided by your local utility company, or by your state or county. These rebates work as cash back that is applied after you pay for solar panels and before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
Federal Solar Incentives
Federal solar incentives are likely the first thing that you think of when you think about solar incentives. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of your solar system's cost.
The ITC applies to solar systems installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost — for panels, labor, accessories 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.
Curious how the ITC might apply to your specific situation? Contact your local Flagstaff solar panel installation expert to get more information.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now called the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. You are now eligible for a 30% credit for solar systems that began installation on or after January 1, 2022 and will be done by December 31, 2032. This credit will then decrease annually until the date of expiration. Starting in 2023, it will also be easier to obtain credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. 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
Tax credits, rebates and more might be provided at multiple levels. On top of federal solar incentives, there are often state and local ones as well. These solar incentives — which may be given by the state of Arizona, or by your county or municipality — may be offered on an ongoing basis, or for only a limited time.
Next Steps for Installing Solar in Flagstaff
Solar energy use nationwide has significantly increased in the past 15 years, in part due to the increase in availability of solar incentives. You can obtain these incentives from the Arizona government, the federal government or your local utility company. Speak with your local solar panel installer today to learn more and to save the most money possible on a solar system for your Flagstaff home.
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EcoWatch's Flagstaff, AZ Solar Incentives FAQs
Can I receive any 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 fully understand what solar incentives apply to you, many can be claimed on a second home, provided that it is in the United States and owned by you. There may be additional incentives available specifically for commercial properties, depending on the details.
How can I learn if I qualify for certain solar incentives?
Typically, solar incentives apply to:
- a new solar panel system
- installed on property that you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those given out by the Arizona government or by your county/municipality, may have additional qualifications. Talk to your local Flagstaff solar installer to discover what incentives your project may qualify for.
What are some environmental benefits of installing solar panels on my home?
You can lower your carbon footprint by 500 pounds of CO2 a year by switching to solar panels. This adds up to roughly 10,000 pounds over 20 years. Solar is also a renewable energy source, meaning that making the switch lessens the drain on our planet's resources.
If I switch my appliances out for ones that can use solar energy, are there incentives I can claim?
With the passage of the new Inflation Reduction Act, there are a variety of new financial incentives that are available when you make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I use a combination of multiple types 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 talk through your ideas with your local Flagstaff solar installation expert. They can help you plan your project and give you an understanding of various incentives that you will or won't 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.