2025 Solar Incentives Guide for Sun City, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Sun City.
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 Sun City?
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
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to mitigate the cost of installing solar panels on your home. This category of financial incentives is in place to encourage more people to switch their home over to renewable energy. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are provided by the Arizona government or your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have in place a net metering agreement with your Sun City utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in others you might make back a percentage of the value.
- Rebates: Rebates, or cash back after a purchase, are normally applied before any solar tax credits are calculated. Rebates may be given by your local utility company, by your county or by your state.
- 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 calculating how much property tax you need to pay.
Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. The Federal Solar Investment Tax Credit, or ITC, is probably the most commonly known federal solar incentive. The ITC allows you to claim a tax credit for a specific percentage of your solar system's cost.
The ITC applies to a solar system installed on your primary or secondary residence in the United States. The solar panels must 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, labor, accessories and equipment), although this amount has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the amount you can claim.
To better understand exactly how much the ITC could save you, contact your local Sun City solar panel installer.
The Inflation Reduction Act, passed in August 2022, expanded and extended 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 installation projects started after January 1, 2022, and completed by the end of 2032. After this, the credit percentage will decrease slightly each year until the program expires in 2035. The program expansion 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 easiest way to learn more about how the new Clean Energy Credit applies to you is to talk with your local Sun City solar panel installation expert.
State & Local Solar Incentives
There are more than just federal solar incentives; rebates, tax credits and more are often offered at the local or state level. Incentives may be provided by your county or municipality, or by the state of Arizona. Some incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Sun City
There are a number of different solar incentives: those given by the federal government, those given by the Arizona government and those provided by local utility companies, to name a few. The use of solar energy has grown enormously in the last 15 years, partially due to these incentives. When you're ready to make the switch to solar energy, reaching out to your local Sun City solar panel installation expert is a great first step.
EcoWatch's Sun City, AZ Solar Incentives FAQs
How can I learn if I qualify for certain solar incentives?
Generally, solar incentives apply to:
- a new solar system
- installed on property you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those run by the Arizona government or by your county/municipality, could have additional qualifications. Get in touch with your local Sun City solar installer to discover what incentives your project may qualify for.
What are the environmental benefits of switching to solar?
You can reduce your carbon footprint by 500 pounds of CO2 annually when you install solar panels. This adds up to roughly 11,000 pounds over 20 years. In addition, solar power is a renewable energy source, meaning that switching your home over reduces the drain on our planet's resources.
If I switch my appliances out for ones that can use solar energy, are there benefits that I can claim?
Under the new Inflation Reduction Act, there are a variety of new financial incentives that are available when you make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found here.
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 — for example, a combination of solar and geothermal. You can also use both renewable energy sources and a backup source of non-renewable energy. Be sure to discuss the details of your plan with your local Sun City solar panel installer, to get an understanding of what will be needed and what incentives you might or might not qualify for.
What if I want to add a solar system to a rental property, vacation home or commercial property? Do I still qualify for incentives?
While we recommend talking to your local solar installer and/or tax professional to better understand what solar incentives apply to you, many incentives will apply to a second home, provided that it is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the specifics.
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.