2025 Solar Incentives Guide for Oro Valley, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Oro Valley.
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.
Get a free quote from one of our trusted Oro Valley solar installers to see how much you can save.
Please enter a valid 5-digit zip code!
Why you can trust EcoWatch
What Solar Tax Credits, Incentives, and Rebates are Available in Oro Valley?
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/
Solar incentives are designed to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. You may be eligible for various kinds of incentives, such as discounts, cash back or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Arizona and others from the federal government. Some broad categories of solar incentives include:
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you have a net metering agreement in place with your Oro Valley 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 others you may make back a percentage of the value.
- Rebates: Solar rebates might be offered by your county or state, or by your local utility company. These rebates are essentially cash back that is applied after your purchase of a solar system and before tax credits are calculated.
- Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when calculating property tax for your home.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (A tax credit is different from a tax deduction.)
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. 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 percentage of the cost of your solar system.
The ITC can be applied to solar systems installed after January 1, 2006, and under this program you can deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. You can claim this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum claim amount.
To find out exactly how much money the ITC could save you, get in touch with your local Oro Valley solar panel installer.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. With the new provisions, solar installation projects that are completed between 2022 and 2032, may be eligible for a 30% tax credit. The amount of the credit will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. The best way to learn more about how the new Clean Energy Credit will apply to you is to reach out to your local Oro Valley solar panel installers with your questions.
State & Local Solar Incentives
Some solar incentives are often also provided by state and local governments. Similar to federal incentives, these may include tax credits, rebates and more. Incentives might be offered by the state of Arizona, or by your county or municipality. Some incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Oro Valley
There are a variety of solar incentives: those provided by local utility companies, those offered by the federal government and those given by the Arizona government, to name a few. Solar energy utilization has increased enormously in the last 15 years, thanks to these incentives. If you're prepared to make the change to solar energy, getting in touch with your local Oro Valley solar panel installation expert is an excellent place to start.
EcoWatch's Oro Valley, AZ Solar Incentives FAQs
How do I learn if I qualify for certain solar incentives?
Broadly, 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 those run by the Arizona government or by your county/municipality, might have additional qualifications. Get in touch with your local Oro Valley solar installer to find out what incentives your project will qualify for.
How much will a solar system save me annually on my electric bill in Oro Valley?
Generally, Oro Valley homeowners who install solar panels save approximately $1,355.28 per year, or around $25,750.30 over 20 years after making the switch.
How long until the federal solar tax credit ends?
The Clean Energy Credit (previously referred to as the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I receive incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order in which incentives are applied may vary depending on which incentives you are eligible for but generally yes, you can receive multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to make sure you are claiming all possible incentives and applying them in the correct order.
Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?
Many solar incentives apply to a property located within the United States that you own; most secondary residences will fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to best understand what incentives may apply to your specific situation.
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.