2023 Solar Incentives Guide for Prescott, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Prescott.
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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Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Prescott?
Solar and Wind Equipment Sales Tax Exemption
Residential Solar and Wind Energy Systems Tax Credit
Qualifying Wood Stove Deduction
Energy Equipment Property Tax Exemption
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to encourage people to make the switch to renewable energy by providing financial incentives that lower the burden of solar panel installation and use. Incentives could include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are handled by the state of Arizona or by your utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Credits: Unlike tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the government.
- Tax Exemptions: Tax exemptions may 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 added value of your solar system when calculating property tax for your house.
- 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 Prescott 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 others you may get refunded a percentage of the value.
- Rebates: Solar rebates can be provided by your local utility company, or by your county or state. These rebates are essentially cash back that is applied after you purchase solar panels and before tax credits are calculated.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. It's likely that you've 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 installing solar panels.
The ITC was originally for 30% of the total cost of installing a solar system, although it has fluctuated slightly over the last few years between 26-30%. The percentage you qualify for will depend on when your solar system was installed. The total installation cost includes the panels themselves as well as the cost of accessories, labor and equipment. There is no maximum claim amount. 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 better understand how the ITC will apply to you, speak to your local Prescott solar panel installation expert and request more information.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The new Clean Energy Credit extends until 2035. American homeowners are now eligible for a 30% credit for solar systems that began installation after January 1, 2022 and are completed by the end of 2032. The credit will then see a slight annual decrease until it expires. The expansion to the program also makes it easier to get credit for energy storage systems, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. The best way to understand how the new Clean Energy Credit will apply to you is to get in touch with your local Prescott solar panel installation expert.
State & Local Solar Incentives
There are often also state solar incentives in addition to those provided by the federal government. Rebates, tax credits and more might be available at a more local level. Some incentives are offered for only a limited time, while others are ongoing. Your local incentives could come from the Arizona government, or from your specific county or municipality.
Next Steps for Installing Solar in Prescott
There are many kinds of solar incentives: those given by local utility companies, those given by the federal government and those given by the Arizona government, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially due to these incentives. If you're ready to make the switch to solar energy, talking to your local Prescott solar panel installation expert is a great first step.
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EcoWatch's Prescott, AZ Solar Incentives FAQs
What if I want to add a solar system to a rental property, vacation home or commercial property? Can I still qualify for incentives?
Many solar incentives are intended to apply to a property located within the United States that you own, and most secondary residences will fall into this category. 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 better understand what incentives will apply to your specific situation.
How can I find out if I qualify for specific solar incentives?
In most cases, 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 ones handled by the Arizona government or by your county/municipality, may have additional qualifications. Get in touch with your local Prescott solar installer to find out what incentives your project may qualify for.
What are some environmental benefits of adding solar panels to my house?
Solar energy is renewable — by changing where you get your energy, you help reduce the strain on our planet's resources. Solar panels can also reduce your home's CO2 emissions by 500 pounds yearly, or roughly 10,000 pounds over 20 years.
If I switch my appliances out for ones that can utilize solar energy, are there benefits that 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 apply for incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both rebates and tax credits towards the cost of solar panels. Depending on precisely which incentives you are eligible for, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to verify that you are claiming incentives correctly and that you're getting the most money possible.
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.