2025 Solar Incentives Guide for Tucson, AZ - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Tucson?

Source: https://www.dsireusa.org/

Solar incentives are intended to encourage homeowners to switch their home over to renewable energy by offering financial incentives meant to lower the burden of solar panel installation and use. You may be eligible for different kinds of incentives, including discounts, cash back 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 state of Arizona and others from the federal government. Types of solar incentives might include:

• Tax Credits: Tax credits lower, dollar-for-dollar, the amount of income tax you owe the government. Tax credits differ from tax deductions.
• Net Metering: Net metering factors in once your solar system is up and running. If you have in place a net metering agreement with your Tucson utility company, it will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other places you may make back a percentage of the value.
• Rebates: A rebate is a partial refund credited to your account after you've paid for 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.
• Tax Exemptions: Your solar panel system may qualify for exemptions on both sales and property tax. Sales tax exemptions are applied at the time of purchase. Property tax exemptions let you exclude the value added by your solar panels when calculating property taxes on your house.

Federal Solar Incentives

Federal solar incentives are likely the first thing that you think of when thinking about solar incentives. The solar incentive that you may be most familiar with is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a percentage of your solar system's cost.

The ITC applies to the total cost of installing a solar system, including the panels themselves as well as accessories, labor and equipment. You can claim this credit for panels installed after January 1, 2006, on a primary or secondary residence that you own and that is located in the United States. 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.

Wondering how the ITC applies to your specific situation? Get in touch with your local Tucson solar panel installation expert to get more information.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Under the new program, solar installation projects that are completed between 2022 and 2032, might qualify for a 30% tax credit. This percentage will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems with the new act.

Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit applies to you is to get in touch with your local Tucson solar panel installation expert.

State & Local Solar Incentives

Some solar incentives are often also offered at the local or state level. Like with federal incentives, these may include tax credits, rebates and more. The incentives — which may be handled by the state of Arizona, or by your county or municipality — might be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Tucson

You can qualify for solar incentives from the Arizona government and the federal government, as well as from your local utility company. Growing availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Reaching out to your local Tucson solar panel installer is an excellent first step towards getting all the incentives you qualify for when you switch to solar energy.