2023 Solar Incentives Guide for Florence, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Florence.
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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Florence?
Solar and Wind Equipment Sales Tax Exemption
Residential Solar and Wind Energy Systems Tax Credit
Qualifying Wood Stove Deduction
Energy Equipment Property Tax Exemption
SRP - Solar Water Heating Program
Federal Residential Renewable Energy Tax Credit
The phrase "solar incentives" covers a range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, while others are handled by the Arizona government or your utility company, county or municipality. Categories of solar incentives include:
- Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the federal government. Tax credits are different from tax deductions.
- Tax Exemptions: Your solar system could qualify for exemptions on both sales and property tax. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when calculating property taxes on your home.
- Net Metering: Net metering factors in after your solar system is up and running. If you have in place a net metering agreement with your Florence utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other areas you may receive a refund equivalent to a percentage of the value.
- Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar panels. These may be offered by your local utility company, your state or your county. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
Federal Solar Incentives
Federal incentives are the type of incentives that you are most likely to have some familiarity with. An incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a given percentage of your solar system's cost.
The ITC applies towards solar systems installed after January 1, 2006 and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. This credit can be claimed on a solar panel system installed on a primary or secondary residence in the United States that you own. The original amount you could claim was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum amount you can claim.
To better understand how the ITC will apply to you, contact your local Florence solar panel installation expert and ask for more information.
The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Under the new program, solar installation projects started after January 1, 2022 and completed by the end of 2032 might qualify 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, the expansion will also make credits for energy storage systems even easier to claim.
Click here to learn more about the new Inflation Reduction Act. Your local Florence solar panel company can answer any questions you have and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more may be available at a more local level. Certain incentives are offered for only a limited time, while others are ongoing. Local solar incentives might come from your county or municipality, or from the Arizona government.
Next Steps for Installing Solar in Florence
Solar incentives can be offered by the federal government, the Arizona government or your local utility company. The growing number of available solar incentives has facilitated the nationwide growth of solar energy use in the last 15 years. We suggest talking to your local Florence solar installation expert to learn more about these incentives and to make sure that you're getting all of the money you can for your solar system.
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EcoWatch's Florence, AZ Solar Incentives FAQs
What if I am planning to add solar panels to a rental property, vacation home or commercial property? Will I still qualify for incentives?
While we recommend getting in touch with your local solar installer and/or tax professional to better understand what solar incentives apply to you, many apply to 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.
I already have solar panels installed. Does my system qualify for any incentives?
An excellent idea would be to talk to a representative from the company that installed your solar panels — or speak to a local Florence solar installer — to clarify which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will a solar system save me on my electric bill in Florence annually?
On average, Florence homeowners who install solar panels save around $1,304.04 per year, or around $24,776.69 over 20 years after they make the switch.
When does the federal solar tax credit end?
The federal solar tax credit, formerly called the ITC and now named the Clean Energy Credit, is slated to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
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. Make sure you discuss your plan with your local Florence 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.