2023 Solar Incentives Guide for Sedona, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Sedona.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Sedona?
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
Solar incentives are designed to make renewable energy usage more affordable through financial incentives for individuals who install solar panels on their homes. Various types of incentives, like discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be offered by the Arizona government, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:
- Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar panels. Property tax exemptions allow you to ignore the added value of your solar system when calculating how much property tax you need to pay on your home.
- Net Metering: You may be able to sign a net metering contract with your Sedona utility company that will apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract 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.)
- Rebates: Solar rebates can be provided by your local utility company, or by your state or county. These rebates are essentially cash back that is applied after your purchase of a solar system and before tax credits are calculated.
Federal Solar Incentives
When someone says "solar incentives," you probably think of federal incentives first. An incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a specific percentage of the cost of your solar system.
The ITC initially applied to 30% of the cost of solar panel installation, although it 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 equipment, accessories and labor. 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.
Your local Sedona solar panel installation expert can offer more information about the ITC and how it might apply to your situation.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. Under the new program, solar installation projects begun after January 1, 2022 and finished by December 31, 2032 may be eligible for a 30% tax credit. This percentage will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. 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 learn more about how the new Clean Energy Credit applies to you is to speak with your local Sedona solar panel installers directly.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more might be available at a more local level. Certain incentives are offered for only a limited time, while others are ongoing. These local incentives might come from the Arizona government, or from your specific county or municipality.
Next Steps for Installing Solar in Sedona
Solar energy use nationwide has gone up tremendously in the last 15 years, in part thanks to the increase in availability of solar incentives. You may get these incentives from the Arizona government, the federal government or your local utility company. Your local Sedona solar panel installation expert can give you more information about which incentives you can apply for, and get you on track to switch to renewable energy today.
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EcoWatch's Sedona, AZ Solar Incentives FAQs
My home already has solar panels. Are there any incentives that I qualify for?
If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with the company that installed your system, or any local Sedona solar installer, can help you understand what incentives you qualify for.
How much can I save annually on my electric bill if I add solar panels to my Sedona home?
When you add solar panels to your house in Sedona, you can anticipate savings of approximately $1,330.09 per year, or approximately $25,271.67 over 20 years.
What are the best solar panel installation companies near me?
To learn about the best solar panel installers near you, take a look at our article on Sedona's best solar panel companies.
What are some of the environmental benefits of switching to solar energy?
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 lower your home's CO2 emissions by 500 pounds annually, or roughly 10,000 pounds over 20 years.
Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?
Yes, you can claim both rebates and tax credits towards the cost of solar panels. Depending on which incentives you are claiming, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to verify that you are claiming the correct incentives 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.