2025 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 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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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
Source: https://www.dsireusa.org/
The phrase "solar incentives" refers to financial incentives designed to encourage the use of renewable energy by making installing and using solar panels more affordable. Incentives might include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are provided by the Arizona government or by your specific utility company, county or municipality. Some solar incentives you might qualify for are:
- Tax Exemptions: These might come in the form of property tax exemptions, which can let you ignore the value of your solar system when paying property tax on your home. You may also qualify for an exemption on sales tax at the time of purchase.
- Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. Any rebates you receive will usually be deducted from the total price before any tax credits are calculated.
- Net Metering: Net metering is an incentive you can get after your solar system is up and running. If you've signed a net metering agreement with your Sun City West utility company, the company will subtract the value of the excess energy produced by your solar system 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.
Federal Solar Incentives
When thinking about solar incentives, you probably think of federal incentives first. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a specified percentage of your solar system's cost.
The ITC can be applied to the total cost of solar panel installation, including the panels themselves as well as equipment, accessories and labor. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence located in the United States that you own. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum amount you can claim.
Contacting your local Sun City West solar panel installation expert is the best way to understand how the ITC could apply to your situation.
In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. Homeowners are now eligible for a credit of 30% of the total solar system installation costs for projects that began after January 1, 2022, and will be finished by the end of 2032. This percentage will then decrease on a yearly basis until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.
Click here to learn more about the new Inflation Reduction Act. The best way to learn more about how the new Clean Energy Credit will apply to you is to speak with your local Sun City West solar panel company directly.
State & Local Solar Incentives
Rebates, tax credits and more can be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones, too. Some incentives are ongoing, while others are available for a limited time. They might be given by the Arizona government, or by your county or municipality.
Next Steps for Installing Solar in Sun City West
Solar energy use nationwide has significantly increased in the past 15 years, in part due to the proliferation of solar incentives. You can obtain these incentives from the federal government, the Arizona government or your local utility company. Reaching out to your local Sun City West solar panel installation company is the right first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Sun City West, AZ Solar Incentives FAQs
How long until the federal solar tax credit ends?
The Clean Energy Credit (formerly called the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I claim incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of your solar panels. Depending on precisely which incentives you are eligible for, they may apply in a different order. Be sure to talk to your solar installer or a local tax professional to confirm that you are claiming the correct incentives and getting the most money you can.
Can I use multiple types of renewable energy to power my home?
Yes, you can use multiple types of renewable energy to power your home, such as a combination of solar and geothermal. You can also combine renewable energy generation with a non-renewable backup source of energy. You should discuss the details of your plan with your local Sun City West solar panel installer, so that you understand what you'll need and what kinds of incentives you might or might not qualify for.
What if I want to add solar panels to a rental property, vacation home or commercial property? Will I still qualify for incentives?
While we recommend speaking 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 additional incentives available for commercial properties specifically, depending on the details.
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