2023 Solar Incentives Guide for Somerton, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Somerton.
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 Somerton?
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/
The term "solar incentives" refers broadly to financial incentives designed to encourage the adoption and use renewable energy by making installing and using solar panels more affordable. The incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the Arizona government and some by your utility company, county or municipality. Some solar incentives you might qualify for are:
- 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, which allows you to exclude the added value of your solar system when paying property tax on your house.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the government.
- Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you have a net metering agreement with your Somerton utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some locations, this credit is dollar-for-dollar, while in others you might be refunded a percentage of the value.
- Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually come off your total price before tax credits are calculated.
Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a specified percentage of the money you spend installing solar panels.
The ITC applies to the value of a solar system installed on your primary or secondary residence in the United States. The solar panels have to have been installed on a property you own after January 1, 2006 for you to be eligible for the credit. Initially, the ITC applied to 30% of all costs (panels, accessories, labor and equipment), although the total amount has fluctuated over the years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
Contacting your local Somerton solar panel installation expert is the best way to understand how the ITC could apply to your situation.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. After 2032, the credit percentage will be reduced slightly each year until the end of the program in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit will apply to you, reach out to your local Somerton solar installers.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more can be offered at a more local level. Certain incentives are offered for only a limited time, while others are ongoing. Local solar incentives could come from the Arizona government, or from your specific county or municipality.
Next Steps for Installing Solar in Somerton
You can apply for and receive solar incentives from the federal government and the Arizona government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped increase solar adoption nationwide. Speaking with your local Somerton solar panel installer is the best first step towards making sure you get all the incentives you qualify for when you switch to solar energy.
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EcoWatch's Somerton, AZ Solar Incentives FAQs
How can I learn if I qualify for solar incentives?
It's best to speak with your local Somerton solar installer for a better 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 provided by the Arizona government, might have other requirements.
If I already have solar panels, can I still claim incentives?
Your best bet is to talk to a representative from the company that installed your solar system — or reach out to a local Somerton solar installer — to learn about which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
Who installs solar panel systems near me?
To learn about the best solar panel installation companies near you, read our article on Somerton's best solar panel companies.
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly named the federal solar tax credit, or the 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 a combination of multiple types of renewable energy to power my home?
Yes, you can utilize multiple types of renewable energy to power your home, such as a combination of geothermal and solar. You can also use both renewable energy sources and a backup source of non-renewable energy. You should discuss your plan with your local Somerton solar panel installer, so that you understand what you'll need and what types 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.
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.