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

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

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

Solar incentives help mitigate the cost of installing a solar panel system on your home. These financial incentives are in place to encourage more Americans to switch to renewable energy. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are handled federally, while others are provided by the Arizona government or your specific utility company, county or municipality. Some broad categories of solar incentives include:

• Net Metering: You may be able to sign a net metering contract with your Somerton utility company that will apply to all or a percentage of the excess electricity your solar panels generate. Your utility company will then subtract this value from your monthly utility bill.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the federal government. Tax credits are different from tax deductions.
• Rebates: A solar rebate is a partial refund credited to your account after you've paid for your solar system. These might be offered by your local utility company, your county or your state. The cash back that you get from the rebates is normally applied before tax credits are calculated.
• Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when calculating property tax for your home.

Federal Solar Incentives

Federal incentives are the type of incentives that you are most likely to have some knowledge of. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which provides a credit on your taxes equal to a predetermined percentage of your solar system's cost.

The ITC applies to solar systems installed after January 1, 2006, on a primary or secondary residence in the United States that you own. The credit initially covered 30% of the total cost – for panels, equipment, accessories and labor – although the percentage may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.

To better understand exactly how much money the ITC could save you, speak with your local Somerton solar panel installation expert.

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. Homeowners are now eligible for a credit equal to 30% of the total costs of solar system installation for projects started after January 1, 2022, and completed before the end of 2032. The percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. The program expansion also makes it easier to get credit for energy storage systems, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit will apply to you, speak with your local Somerton solar installers.

State & Local Solar Incentives

Tax credits, rebates and more can be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. The incentives — which may be handled by your county or municipality, or by the state of Arizona — could be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Somerton

You can apply for and receive solar incentives from the Arizona government and the federal government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. Reaching out to your local Somerton solar panel installer is a great first step towards getting all the incentives you qualify for when you switch to solar energy.