2023 Solar Incentives Guide for Sun Lakes, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Sun Lakes.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2023 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Sun Lakes?
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
The phrase "solar incentives" refers to financial incentives designed to encourage the use of renewable energy by making the installation and use of solar panels more affordable. These incentives can include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are given by the federal government, some by the state of Arizona and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Rebates: Solar rebates might be offered by your local utility company, or by your state or county. These rebates work as cash back that is applied after you purchase a solar system and before tax credits are calculated.
- Tax Exemptions: Tax exemptions can come in one of two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the added value of your solar system when calculating property tax for your house.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you've signed a net metering agreement with your Sun Lakes utility company, it will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in other areas you may make back a percentage of the value.
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 originally covered 30% of the total cost of installing a solar system, although it has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006 on your primary or secondary residence. The residence must be owned by you and in the United States.
Your local Sun Lakes solar panel installer can give you more information about the ITC and how it may apply to your situation.
In August 2022, the ITC (now referred to as the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. For solar system installations that begin after January 1, 2022 and are completed by the end of 2032, homeowners can receive a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems with the new act.
Click here to learn more about the new Inflation Reduction Act. To better understand how the new Clean Energy Credit applies to you, get in touch with your local Sun Lakes solar installers.
State & Local Solar Incentives
Not all solar incentives are federal; rebates, tax credits and more are often offered at the state and local level. Certain incentives are offered for only a limited time, while others are ongoing. Your local solar incentives might come from your county or municipality, or from the Arizona government.
Next Steps for Installing Solar in Sun Lakes
There are a variety of solar incentives: those given by the federal government, those given by the Arizona government and those given by local utility companies, to name a few. The use of solar energy has increased tremendously in the last 15 years, thanks to these incentives. Your local Sun Lakes solar panel installer can provide you with more details about which incentives you might qualify for, and get you started on the path to switching to renewable energy today.
EcoWatch's Sun Lakes, AZ Solar Incentives FAQs
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.