2025 Solar Incentives Guide for Payson, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Payson.
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.
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What Solar Tax Credits, Incentives, and Rebates are Available in Payson?
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/
The term "solar incentives" generally refers to financial incentives implemented by the government and by solar companies to encourage increased use of renewable energy by making solar panels more affordable. Incentives might include things like discounts, cash back or credit on your utility bill each month. Some incentives are provided by the federal government, while others are handled by the Arizona government or by your utility company, county or municipality. Types of solar incentives might include:
- Rebates: Rebates, or partial refunds after a purchase, are normally applied prior to any solar tax credits being calculated. Solar rebates may be offered by your local utility company, by your county or by your state.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar system. Property tax exemptions allow you to ignore the value added by your solar system when you calculate how much property tax you need to pay on your house.
- Net Metering: You may be able to sign a net metering contract with your Payson utility company that will apply to all or a percentage of the excess electricity your solar panels generate. They will then deduct this value from your monthly utility bill.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the federal government. (A tax credit is different from a tax deduction.)
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Federal Solar Incentives
When you hear the term "solar incentives," federal incentives are likely the first thing that comes to mind. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a specified percentage of the money you spend on solar panels for your home.
The ITC was originally for 30% of the total cost of installing a solar system, and has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of labor, accessories and equipment. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
To know exactly how much the ITC could save you, talk to your local Payson solar panel installer.
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. For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can receive a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. The expansion to the program also makes claiming credit for energy storage systems easier than ever before, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. The easiest way to understand how the new Clean Energy Credit will apply to you is to speak with your local Payson solar panel installation expert directly.
State & Local Solar Incentives
In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more might be available at a more local level. Incentives might be provided 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 Payson
There are many types of solar incentives: those provided by the federal government, those provided by the Arizona government and those given by local utility companies, to name a few. The use of solar energy has grown enormously in the last 15 years, partially due to these incentives. If you're prepared to make the change to solar energy, reaching out to your local Payson solar panel installation expert is a great first step.
EcoWatch's Payson, AZ Solar Incentives FAQs
How can I find out if I qualify for certain solar incentives?
It's a good idea to talk to your local Payson solar installer to get an understanding of which incentives your project will qualify for. Usually, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) within a specified date range. Some incentives, such as those provided by the Arizona government, might have additional requirements.
I already have solar panels. Does my system qualify for any incentives?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the exact installation date. Speaking with a representative from the company that installed your system, or any local Payson solar installer, can help you learn what incentives you might want to apply for.
Who installs solar panels near me?
To find the top solar panel installation companies near you, take a look at our article on Payson's top solar panel companies.
When does the federal solar tax credit end?
The Clean Energy Credit (previously referred to as the federal solar tax credit, or the ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
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.