There is an average of 299 sunshine days per year in Arizona, quite ahead of the national average of 205. This is good news for homeowners in the state who are considering making the switch to solar energy. Not only is solar energy environmentally friendly, but it can also help homeowners save thousands of dollars on their energy bills.
There is more good news for homeowners interested in installing solar panels, in the form of solar incentives. In addition to the 26% federal solar tax credit, residents in The Grand Canyon State can also avail of a state tax credit of up to $1,000.
Let’s take a closer look at everything you need to know about Arizona solar incentives.
What Is the 26% Federal Solar Tax Credit?
Put simply, it is a way to greatly reduce the upfront costs of installing a solar panel system on your property.
This tax credit was introduced in 2006 (originally it covered 30% of the costs) and is due to finally expire at the end of 2023. We recommend that you avail of the tax credit this year as it will drop to 22% after 31st December 2022.
The tax credit covers the following expenses:
- Solar panels
- Balance-of-system equipment
- Labor costs
- Energy storage devices
- Sales tax on eligible expenses
In order to claim your federal tax credit, you need to complete IRS Form 5695 and add the amount that you are eligible for to Form 1040.
What Is the Arizona State Tax Credit?
In addition to the federal solar tax credit, residents in Arizona are entitled to a state tax credit. This covers 25% of the total system cost, up to a value of $1,000.
In addition to the state tax credit, net metering is offered within Arizona (though it differs by utility provider). Effectively it means that you can sell your excess solar energy to the main grid. You will then receive credits on your account, allowing you to access grid electricity when the sun isn’t shining, such as at night.
After applying the available incentives, the average cost of a solar panel system in Arizona is between $10,533 and $12,874. A 6.1 kW solar system in Maricopa County has a net profit (25-year savings minus the system cost) of $26,954 to $32,943. This highlights the long-term value of installing solar panels in this most-sunniest of states.
Click here to learn more about the amazing benefits of going solar in Arizona.
What You Need to Know About Arizona Solar Incentives
Thanks to the available federal and state incentives, Arizona residents can save significantly on the upfront costs of installing solar panels. Over the 25-plus year lifespan of a solar system, they stand to save tens of thousands of dollars on their home’s energy bills.
In addition to the cost savings, solar energy is an environmentally friendly energy resource.
Like this blog post on Arizona solar incentives? Be sure to check out our other informative articles on a wide range of interesting topics.
Like this blog post on Arizona solar incentives? Be sure to check out our other informative articles on a wide range of interesting topics.
Like this blog post on Arizona solar incentives? Be sure to check out our other informative articles on a wide range of interesting topics.
