2023 Solar Incentives Guide for Sun City West, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Sun City West.
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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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 Sun City West?
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 intended to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered federally, while others are handled by the Arizona government or by your specific utility company, county or municipality. Types of solar incentives might include:
- Tax Exemptions: These could come in the form of property tax exemptions, which allow you to exclude the value added by your solar panels when paying property tax on your house. You could also look for exemptions on sales tax at the time of purchase.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
- Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Sun City West utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this credit is dollar-for-dollar, while in others you might make back a percentage of the value.
- Rebates: A solar rebate is a partial refund after the purchase of your solar system. Rebates 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 calculating tax credits.
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives might be the first thing that comes to mind. It's likely that you've heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a certain percentage of the money you spend on solar panels for your home.
The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as equipment, labor and accessories. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.
To understand exactly how much money the ITC could save you, speak with your local Sun City West solar panel installer.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. After 2032, the credit percentage will see a slight decrease annually until the end of the program in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.
More information about the new Inflation Reduction Act can be found here. Your local Sun City West solar panel company can answer your questions and explain how the new Clean Energy Credit may apply to you.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. Similar to federal incentives, these might include tax credits, rebates and more. Some incentives are ongoing, while others are offered for only a limited time. These local incentives could come from your county or municipality, or from the Arizona government.
Next Steps for Installing Solar in Sun City West
Solar energy use nationwide has significantly increased in the past 15 years, in part thanks to the growth in the number of solar incentives. You can obtain these incentives from the federal government, the Arizona government or your local utility company. We suggest talking to your local Sun City West solar installation company for more information about these incentives and to ensure that you're getting the most money possible for your solar panels.
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EcoWatch's Sun City West, AZ Solar Incentives FAQs
Can I get any financial incentives when I add solar panels to a rental property, vacation home or commercial property?
While we recommend getting in touch with your local solar installer and/or tax professional to fully understand what solar incentives apply to you, many incentives will apply to a second home, as long as it is in the United States and owned by you. There may be other incentives available for commercial properties specifically, depending on the specifics.
If I already have solar panels, can I still claim incentives?
You should plan to talk to the company that installed your solar panels — or get in touch with a local Sun City West solar installer — to clarify which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will a solar system save me annually on my electric bill in Sun City West?
Typically, Sun City West homeowners who install solar panels save about $1,406.51 per year, or about $26,723.71 over 20 years after they make the switch.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly called 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.
If I trade in my appliances for ones that utilize solar energy, are there benefits I can claim?
The recently passed Inflation Reduction Act introduces several incentives designed to reward homeowners who make eco-friendly upgrades. Some incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
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.