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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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated March 14, 2023
Why you can trust EcoWatch
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
The phrase "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. Various kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, might be available to you. Certain incentives may be provided via the state of Arizona, by your utility company or by county or municipality, while other incentives are federal. Categories of solar incentives include:
- Rebates: Solar rebates may be offered by your local utility company, or by your state or county. These rebates are essentially partial refunds that are applied after you purchase solar panels and before tax credits are calculated.
- Tax Credits: Tax credits reduce, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.
- Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you have a net metering agreement in place with your Tucson utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other places you may be refunded a percentage of the value.
- Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the value added by your solar system when calculating property tax for your home.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when thinking about solar incentives. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a predetermined percentage of the money you spend installing solar panels.
The ITC can be applied to the total cost of solar system installation, including the panels themselves as well as accessories, equipment and labor. 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. The tax credit ranges from 26-30% of total costs depending on when your project was completed. There is no maximum claim amount.
Have questions about how the ITC applies to your specific situation? Reach out to your local Tucson solar panel installer to get more information.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit ends in 2035. Starting in 2023, the expansion will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. To understand how the new Clean Energy Credit applies to you, talk to your local Tucson solar installers.
State & Local Solar Incentives
There are more than just federal solar incentives; tax credits, rebates and more might also be offered at the state and local level. Some incentives are ongoing, while others are offered for only a limited time. Your local incentives could come from your county or municipality, or from the Arizona government.
Next Steps for Installing Solar in Tucson
There are many types of solar incentives: those offered by the federal government, those offered by the Arizona government and those offered by local utility companies, to name a few. The use of solar energy has grown enormously in the last 15 years, partially due to these incentives. It is a good idea to talk to your local Tucson solar installer to learn more about these incentives and to make sure that you're getting all of the money you can for your solar panels.
- Price-match guarantee
- Sleek, efficient, and durable solar panels
- Best solar battery on the market
- Some reported issues with customer service
- Customer service varies by local dealer
Best Warranty Coverage
- Industry-leading warranty coverage
- Expansive service area
- Some reported communication issues
- No leases or PPAs
EcoWatch's Tucson, AZ Solar Incentives FAQs
What if I am planning to add solar panels to a vacation home, rental property or commercial property? Do I still qualify for incentives?
Many solar incentives apply to a property located within the United States that you own, and most secondary residences will fall under this distinction. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend speaking with your local solar installer and/or tax professional to better understand what incentives will apply to your specific situation.
If I already have solar panels, can I still claim incentives?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Talking to the company that installed your solar system, or any local Tucson solar installer, can help you learn what incentives you can apply for.
How much can I save annually on my electric bill if I add solar panels to my Tucson home?
When you add solar panels to your Tucson home, you can expect to save around $1,310.90 per year, or around $24,907.01 over 20 years.
Who installs solar panel systems near me?
To find the best solar panel installers near you, read our article on Tucson's best solar panel companies.
If I trade in my appliances for ones that utilize solar energy, are there credits I can claim?
Under the new Inflation Reduction Act, there are a variety of new financial incentives to encourage you to make eco-friendly improvements to your home. More details about these incentives, including information about incentives for purchasing new appliances, can be found 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.