2025 Solar Incentives Guide for Prescott Valley, AZ - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Prescott Valley?

Source: https://www.dsireusa.org/

Solar incentives are designed to mitigate the cost of installing a solar panel system on your home. This category of financial incentives is intended to encourage more people to make the switch to renewable energy. You may qualify for different types of incentives, including discounts, cash back or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Arizona government and others from the federal government. Some broad categories of solar incentives include:

• Tax Exemptions: Your solar panels might qualify for both sales tax and property tax exemptions. Sales tax exemptions are effective at the time of purchase. Property tax exemptions let you ignore the value added by your solar panels when you are calculating property taxes on your house.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Prescott Valley utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this is a dollar-for-dollar credit, while in others you might be refunded a percentage of the value.
• Rebates: Rebates, or cash back after a purchase, are typically applied before any solar tax credits are calculated. Solar rebates can be given by your local utility company, by your county or by your state.

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 may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a certain percentage of your solar system's cost.

The ITC applies to the total cost of solar system installation, including the panels themselves as well as labor, accessories and equipment. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence located in the United States that you own. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.

Reaching out to your local Prescott Valley solar panel installation expert is the best way to learn more about how the ITC could apply to your situation.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). Homeowners are now eligible for a credit equal to 30% of the total solar system installation costs for projects that began after January 1, 2022, and will be finished by the end of 2032. This percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. The expansion 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 best way to understand how the new Clean Energy Credit will apply to you is to get in touch with your local Prescott Valley solar panel installation expert.

State & Local Solar Incentives

There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more may be available at a more local level. These incentives might be distributed by the Arizona government, or by your county or municipality. Some incentives may be available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Prescott Valley

Solar energy use nationwide has significantly increased in the past 15 years, in part due to the proliferation of solar incentives. You may get these incentives from the Arizona government, the federal government or your local utility company. If you're ready to make the switch to solar energy, getting in touch with your local Prescott Valley solar panel installation expert is a great first step.