2023 Solar Incentives Guide for Valencia West, AZ - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Valencia West.
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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What Solar Tax Credits, Incentives, and Rebates are Available in Valencia 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
Trico Electric Cooperative - SunWatts Incentive Program
Federal Residential Renewable Energy Tax Credit
Solar incentives mitigate the cost of installing a solar panel system on your home. Financial incentives like these are designed to encourage more Americans to make the switch to renewable energy. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are handled federally, while others are handled by the Arizona government or your specific utility company, county or municipality. Categories of solar incentives include:
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Net Metering: Net metering is an incentive you can get once your solar system is up and running. If you have a net metering agreement in place with your Valencia West utility company, they will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other places you might receive a refund equivalent to a percentage of the value.
- Rebates: Solar companies may help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually be deducted from the total price before any tax credits are calculated.
- Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to exclude the value added by your solar system when calculating property tax for your house.
Federal Solar Incentives
Federal incentives are the kind of incentives that you are most likely to have heard of. The Federal Solar Investment Tax Credit, or ITC, is the most well-known federal solar incentive. The ITC offers a tax credit for a predetermined percentage of the cost of your solar system.
The ITC can be applied to solar systems installed after January 1, 2006 on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost — for panels, accessories, labor and equipment — although it may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the amount you can claim.
Speaking with your local Valencia West solar panel installer is the best way to understand how the ITC could apply to your situation.
The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now receive a credit of 30% of the total costs of solar system installation for projects started after January 1, 2022 and completed before the end of 2032. The percentage will then decrease yearly until the Clean Energy Credit ends in 2035. Beginning in 2023, it will also be easier to claim credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. Your local Valencia West solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Rebates, tax credits and more might be provided at multiple levels. Along with federal solar incentives, there are often state and local ones, too. These incentives may be provided by your county or municipality, or by the Arizona government. Certain incentives are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Valencia West
The large number of available solar incentives has helped tremendously increase the nationwide adoption of solar energy over the last 15 years. You may receive solar incentives from your local utility company, the federal government or the Arizona government. Your local Valencia West solar panel installer can help you learn more about which incentives you should apply for, and get you on track to switch to renewable energy today.
EcoWatch's Valencia West, AZ Solar Incentives FAQs
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