It's a known fact that Arizona has abundant sunshine almost all year round, not to mention the state's spanning desert. Being ranked number one (1) as the sunniest state, according to the official list of the United States of America, going solar is an opportunity to take advantage. Former Governor Janet Napolitano herself said, "The Persian Gulf of solar energy" on Arizona future of solar energy. Combine generous, year-round sunshine with Arizona solar incentives, rebates, and federal solar tax credit, reasons why there's widespread homeowner participation in moving to solar in Arizona.
The Federal Investment Tax Credit (ITC) is available to Arizona property owners, and it will substantially influence property owners who purchase their solar panel systems outright. The ITC is undoubtedly a significant tax solar incentive for Arizona property owners. This credit currently amounts to 26% of your solar system's cost, and in 2023, the tax credits for installations will drop to 22%. This is one of many reasons why it makes sense to go solar without delay.
And if you invest in a solar panel by the end of 2032, the federal tax credit is 30% of the price of your solar panel system. This means 30% off the system's total cost, including equipment, labor, and permitting.
Sample Calculation: Assuming that your solar energy system costs $20,000, you would be eligible for a federal solar tax credit of $6,000, which represents 30% of the system's cost.
By 2033, the federal tax credit will fall to 26%.
The Renewable Portfolio Standards (IRPSs), also known as the Environmental Portfolio Standard (EPS)] which was embraced by the Arizona Corporation Commission (ACC), are remarkable in Arizona. These standards give utilities a deadline by which they must acquire a certain percentage of the state's power from renewable energy sources or pay a fee. In Arizona, wind, solar, biomass, and geothermal sources must account for 15% of the state's power production by 2025. Naturally, utilities in strong RPS states offer solar incentives for property owners to invest in solar panels instead of paying the fees. Arizona RPS mandates that 15% of all energy must come from renewable sources by 2025.
A solar carve-out is the portion of energy in a state that needs to come from solar by a specific date. It is incorporated in most RPS's since the scheme leans toward reducing renewable technologies' costs. RPS, above, is about all renewable sources, but the solar carve-out is a requirement for solar. In Arizona, the carve-out is 2.25% by 2025.
Arizona electric rates rank 18th in the country for high cost; 32 other states are cheaper. In one study comparison, Arizona State has the second-highest monthly electricity bill amounting to $131.40. Investing in solar energy will be more cost-effective, and Arizona expensive electricity prices create a more appealing incentive for investing in solar power.
According to the resolution issued by the Arizona Corporation Commission in 2016, the total retail net metering in Arizona is no longer compelled. The availability of full net metering in existing property owners with solar energy will be determined by their location and available utility. Property owners who have agreements before the 2016 resolution are entitled to retain the charges on their net metering for a specific time frame.
With the resolution, utilities in Arizona provide net billing, which serves nearly the same as net metering. Under this program, property owners acquire credit for the extra energy at an additional generation credit rate, which means less than the retail amount of electricity.
Property owners in Arizona who invest in solar panels acquire a residential solar incentives energy credit that allows them to save a bundle on their solar panel system. This state tax credit pays you back 25% of the system's cost, capping at $1,000. If the credit exceeds your total income tax owed the year you installed the system, you can take the credit forward for up to 5 years. That is an excellent addition to the 30% federal solar tax credit.
Arizona property owners who purchase solar panels receive a sales tax exemption. The exemption covers 100% of the sales tax on qualified equipment, which includes rooftop solar panels and solar water heaters for their homes. Property owners don’t need to worry about the tax exemption since it will be the responsibility of the solar company to enroll it with the Arizona Department of Revenue before the solar energy system is installed in your home.
The Energy Equipment Property Tax Exemption means you won't have to pay more property taxes on the value you add to your home by investing in a solar energy system. Property owners can make the most of this exemption by furnishing their district appraiser with records on procurement and installation. They should be presented at least six months before the issuance of property assessments for the year of installation.
With all the benefits a property owner can gain from switching to solar in Arizona, one of the greatest is the sunshine it offers. See which Arizona solar incentives you qualify for today!
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