2025 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 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 Paradise 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 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
Source: https://www.dsireusa.org/
Solar incentives are intended to encourage people to make the switch to renewable energy by offering incentives that lower the financial burden of solar panel installation and use. Incentives might include things like discounts, cash back or monthly utility bill credits. Some incentives are offered federally, while others are handled by the state of Arizona or your specific utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Exemptions: Sales tax exemptions are effective at the time of purchase for your solar system. Property tax exemptions allow you to ignore the added value of your solar system when you're calculating the amount of property tax you need to pay.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the government.
- Rebates: Solar rebates can be offered by your local utility company, or by your county or state. These rebates are essentially partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
- Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement in place with your Paradise Valley utility company, they will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. The Federal Solar Investment Tax Credit, or ITC, is likely the best-known federal solar incentive. The ITC provides a tax credit for a predetermined percentage of your solar system's cost.
The ITC covers solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, equipment, labor and accessories. You can claim this credit for a solar panel system installed on a primary or secondary residence that you own in the United States. Originally, you could claim 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.
Your local Paradise Valley solar panel installation expert can offer more information about the ITC and how it applies to your situation.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. For solar system installations that begin after January 1, 2022, and are completed by the end of 2032, homeowners can apply for a credit equal to 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems with the new act.
More information about the new Inflation Reduction Act can be found here. Your local Paradise Valley solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Rebates, tax credits and more might be claimed at multiple levels. On top of federal solar incentives, there are often state and local ones, too. Incentives may be offered by your county or municipality, or by the state of Arizona. Certain incentives might only be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Paradise Valley
There are a number of different solar incentives: those given by local utility companies, those given by the Arizona government and those provided by the federal government, to name a few. Solar energy use has grown enormously in the last 15 years, thanks to these incentives. Speaking with your local Paradise Valley solar panel installer is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
EcoWatch's Paradise Valley, AZ Solar Incentives FAQs
How much can I save on my electric bill annually if I add solar panels to my Paradise Valley home?
On average, Paradise Valley homeowners who install solar panels save approximately $1,303.82 per year, or approximately $24,772.58 over 20 years after they make the switch.
What are the best solar panel installation companies near me?
To learn about the best solar panel installation companies near you, read our article on Paradise Valley's best solar panel companies.
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.
If I trade in my appliances for ones that use solar energy, are there incentives I can claim?
With the passage of the new Inflation Reduction Act, there are a number of new financial incentives to encourage you to make eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found here.
Can I claim incentives for adding solar panels to a vacation home, rental property or commercial property?
While we recommend talking to your local solar installer and/or tax professional to best understand what solar incentives apply to you, many incentives can be claimed on a second home, as long as it is in the United States and owned by you. There may be other incentives available for commercial properties specifically, depending on the details.
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.