2023 Solar Incentives Guide for Paradise Valley, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Paradise Valley.
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 Paradise 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
SRP - Solar Water Heating Program
Federal Residential Renewable Energy Tax Credit
Solar incentives encourage homeowners to make the switch to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. Various kinds of incentives, such as cash back, discounts or monthly utility bill credits, may be available to you. Some incentives may be offered by the state of Arizona, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:
- Rebates: A solar rebate is a partial refund given after you've purchased your solar panels. These might 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 tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions let you ignore the value added by your solar system when you calculate how much property tax you need to pay on your home.
- Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you've signed a net metering agreement with your Paradise Valley utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
- 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
Federal solar incentives are likely to be the first thing that comes to mind 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 predetermined percentage of the cost of your solar system.
The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar system must have been installed after January 1, 2006 on a property you own for you to be eligible for the credit. Originally, the ITC covered 30% of all system installation costs (panels, equipment, labor and accessories), although this amount has fluctuated over time between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
Wondering how the ITC applies to your specific situation? Reach out to your local Paradise Valley solar panel installation expert to get more information.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. The Clean Energy Credit is valid until 2035. Your solar installation project undertaken between 2022 and 2032 may qualify for a 30% tax credit; this amount will be decreased slightly on a yearly basis until the end of the current program. Starting in 2023, the program 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 easiest way to learn more about how the new Clean Energy Credit applies to you is to get in touch with your local Paradise Valley solar panel company.
State & Local Solar Incentives
Some solar incentives may be provided by state and local governments. Similar to federal incentives, these could include tax credits, rebates and more. Some incentives are ongoing, while others are only available for a limited time. They may be offered by the Arizona government, or by your county or municipality.
Next Steps for Installing Solar in Paradise Valley
The large number of available solar incentives has enormously increased the nationwide adoption of solar energy over the last 15 years. You can get solar incentives from your local utility company, the Arizona government or the federal government. Speak with your local solar panel installation expert today to learn more and to save as much money as possible on a solar system for your Paradise Valley home.
EcoWatch's Paradise Valley, AZ Solar Incentives FAQs
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.