2023 Solar Incentives Guide for Tucson, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Tucson.
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 September 15, 2023
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What Solar Tax Credits, Incentives, and Rebates are Available in Tucson?
Solar and Wind Equipment Sales Tax Exemption
Residential Solar and Wind Energy Systems Tax Credit
Qualifying Wood Stove Deduction
Energy Equipment Property Tax Exemption
Trico Electric Cooperative - SunWatts Incentive Program
Sulphur Springs Valley EC - SunWatts Rebate Program
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" covers a wide range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You may be eligible for several kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Arizona government and others from the federal government. Categories of solar incentives include:
- Tax Exemptions: Tax exemptions may 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 exclude the added value of your solar system when calculating property tax for your home.
- Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. Any rebates you receive will usually come off the total price before any tax credits are calculated.
- Net Metering: Net metering factors in after your solar panels are up and running. If you've signed a net metering agreement with your Tucson utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other places you may receive a refund equivalent to a percentage of the value.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (This is different from a tax deduction.)
Federal Solar Incentives
When people think of solar incentives, federal incentives might be the first thing that comes to mind. You might have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit equal to a predetermined percentage of the money you spend on your solar system.
The ITC applies to the total cost of solar system installation, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. 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 claim amount.
Contacting your local Tucson solar panel installer is the best way to learn more about how the ITC applies to you.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as retitling it the Clean Energy Credit). The Clean Energy Credit has increased the current credit up to 30% for solar installation projects started after January 1, 2022 and completed by the end of 2032. At this point, the percentage will see a slight decrease annually until the program expires in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. Your local Tucson solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit applies to you.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these may include rebates, tax credits and more. Incentives may be given by the state of Arizona, or by your county or municipality. Certain incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Tucson
The variety of solar incentives available has helped tremendously increase the use of solar power nationwide over the past 15 years. You can get solar incentives from your local utility company, the Arizona government or the federal government. Speaking with your local Tucson solar panel installation expert is the best first step towards getting the most money possible when you switch to solar energy.
EcoWatch's Tucson, AZ Solar Incentives FAQs
How much will solar panels save me annually on my electric bill in Tucson?
Generally, Tucson homeowners who install solar panels save around $1,310.90 per year, or around $24,907.01 over 20 years after they make the switch.
Who installs solar panels near me?
To discover the best solar panel installation companies near you, read our article on Tucson's best solar panel companies.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any credits I can get?
The recently passed Inflation Reduction Act introduces several incentives meant to reward homeowners who make eco-friendly upgrades. Some of these incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I apply for incentives both towards the up-front 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 which incentives you are claiming, they may apply in a different order. Be sure to speak with your solar installer or a local tax professional to confirm that you are claiming the correct incentives and that you're getting the most money possible.
Can I use both solar and another type 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 wind power. You can also combine renewable energy generation with a backup source of non-renewable energy. You should discuss the details of your plan with your local Tucson solar panel installer, to make sure you know 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.