2025 Solar Incentives Guide for Scottsdale, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Scottsdale.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Scottsdale?
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
City of Scottsdale - Green Building Incentives
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The phrase "solar incentives" refers to a wide range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Different types of incentives, including cash back, discounts or credit towards your monthly utility bill, may be available to you. Certain incentives may be handled by the Arizona government, by your utility company or by county or municipality, while other incentives are federal. Some broad categories of solar incentives include:
- Rebates: A rebate is a partial refund credited to your account after you've paid for your solar panels. Rebates might be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.
- Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions allow you to ignore the value that your solar panels add when you're calculating how much property tax you need to pay on your home.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Net Metering: Be sure to talk to your Scottsdale utility company about signing a net metering agreement. This allows you to get a credit towards your utility bill every month for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have some knowledge of. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC provides you with a tax credit for a set percentage of your solar system's cost.
The ITC originally covered 30% of the total cost of installing solar panels, 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 claim amount. The ITC applies to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be in the United States and owned by you.
To know exactly how much the ITC could save you, talk to your local Scottsdale solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Homeowners are now eligible for a credit equal to 30% of the total costs of solar system installation for projects that began after January 1, 2022, and will be finished by the end of 2032. The credit percentage will then begin to decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.
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 reach out to your local Scottsdale solar panel installation expert with your questions.
State & Local Solar Incentives
Tax credits, rebates and more might be provided at multiple levels. On top of federal solar incentives, there are often state and local ones, too. Incentives may be given by your county or municipality, or by the state of Arizona. Some incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Scottsdale
Solar incentives may be provided by the Arizona government, the federal government or your local utility company. The large number of incentives available has contributed to a large increase in solar energy use in the last 15 years. Getting in touch with your local Scottsdale solar panel installer is the best first step towards getting all the incentives you qualify for when you switch to solar energy.
EcoWatch's Scottsdale, AZ Solar Incentives FAQs
How can I find out if I qualify for solar incentives?
It's a smart idea to get in touch with your local Scottsdale solar installer to get an understanding of which incentives your project may qualify for. In most cases, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those given by the state of Arizona, may have additional requirements.
How much will solar panels save me on my electric bill in Scottsdale annually?
After adding solar panels to your house in Scottsdale, you can expect to save approximately $1,302.49 per year, or approximately $24,747.37 over 20 years.
What are the best solar panel installation companies near me?
To discover the top solar panel installation companies near you, take a look at our article on Scottsdale's best solar panel companies.
When does the federal solar tax credit end?
The Clean Energy Credit (previously called the federal solar tax credit, or 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.
Can I use solar and another type of renewable energy in combination to power my home?
Yes, you can use multiple types of renewable energy to power your home, such as a combination of solar and geothermal. You can also use both renewable energy sources and a backup source of non-renewable energy. Make sure that you discuss the details of your plan with your local Scottsdale solar installation expert, to make sure you know what you'll need and what kinds of incentives you may or may not qualify for.
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.