Solar Incentives: How Current Financial Incentives Cut Solar System Cost
Current solar incentives bring the cost of going solar into an affordable range for many home owners. Along with the numerous well-known benefits of going solar, homeowners pay less in out-of-pocket expenses as a result of utility rebates. In addition, government solar incentives, such as federal and state tax credits and property and sales tax exemptions, reduce the investment even further.
Local Utilities Support Solar Installations through Rebates
Arizona utilities throughout the state help promote solar installations through rebate programs. In the metro Phoenix and Tucson areas, Arizona Public Service (APS), Salt River Project (SRP) and Tucson Electric Power (TEP) all provide generous solar incentives at this time.
However, some programs have limited funds and the incentive amounts can be reduced over time. It's important for you to verify current program status and eligibility requirements.
At this point in time, APS, SRP and TEP offer the following programs:
Federal Tax Credits for Solar System and Installation Costs
The federal government allows homeowners to receive a 30% tax credit for qualified solar system and installation costs. The tax credit is claimed when you submit your taxes and is available from December 31, 2008 through December 31, 2016. The credit does not impose a maximum amount, so you can carry over in subsequent years up to the program's end in 2016.
Arizona's One-Time Tax Credits
When filing your Arizona state taxes, you can claim a one-time tax credit of $1,000. Your solar contractor must issue a certificate indicating your system is eligible for the state tax credit. If you install future solar devices, you will not be eligible to receive further tax credits.
State and Municipal Sales Tax Exemptions
When you work with a solar contractor registered with the Arizona Department of Revenue, you can exempt sales tax on your solar system purchase. Arizona statute allows registered solar energy providers to exclude sales tax on purchases up to $5,000.
Plus, all Arizona cities also eliminate local sales taxes on solar system purchases. It's important to check with your local municipalities to determine if the retail location and/or installation site qualifies for current solar incentives.
Rebates, tax credits, sales tax exemptions and other financial solar incentives greatly reduce your solar energy investment. A reputable solar contractor will help you understand all the financial benefits you can expect to receive. And, qualified contractors will keep pace with changes in incentive levels and qualification requirements.
Local Utilities Support Solar Installations through Rebates
Arizona utilities throughout the state help promote solar installations through rebate programs. In the metro Phoenix and Tucson areas, Arizona Public Service (APS), Salt River Project (SRP) and Tucson Electric Power (TEP) all provide generous solar incentives at this time.
However, some programs have limited funds and the incentive amounts can be reduced over time. It's important for you to verify current program status and eligibility requirements.
At this point in time, APS, SRP and TEP offer the following programs:
- APS' "Renewable Energy Incentive Program" allows an APS customer to receive a one-time incentive for each DC watt of solar energy installed. Current incentive levels are at $1.00 per watt. In addition, APS offers net-metering arrangements in which solar customers "sell" any excess energy their systems produce back to APS for future utility credits.
- SRP's "Earth Wise Solar Energy" program currently provides solar incentives of $1.20 per watt, up to 5 kilowatts for solar energy systems. As pre-established capacity levels are reached, SRP will reduce the incentive amount to $1.00 per watt.
- TEP provides solar incentives for residential solar photovoltaic systems up to 20 kilowatts AC. With a 20-year Renewable Energy Credit agreement, TEP customers receive a $0.75 per watt DC incentive for both on-grid and off-grid installations.
Federal Tax Credits for Solar System and Installation Costs
The federal government allows homeowners to receive a 30% tax credit for qualified solar system and installation costs. The tax credit is claimed when you submit your taxes and is available from December 31, 2008 through December 31, 2016. The credit does not impose a maximum amount, so you can carry over in subsequent years up to the program's end in 2016.
Arizona's One-Time Tax Credits
When filing your Arizona state taxes, you can claim a one-time tax credit of $1,000. Your solar contractor must issue a certificate indicating your system is eligible for the state tax credit. If you install future solar devices, you will not be eligible to receive further tax credits.
State and Municipal Sales Tax Exemptions
When you work with a solar contractor registered with the Arizona Department of Revenue, you can exempt sales tax on your solar system purchase. Arizona statute allows registered solar energy providers to exclude sales tax on purchases up to $5,000.
Plus, all Arizona cities also eliminate local sales taxes on solar system purchases. It's important to check with your local municipalities to determine if the retail location and/or installation site qualifies for current solar incentives.
Rebates, tax credits, sales tax exemptions and other financial solar incentives greatly reduce your solar energy investment. A reputable solar contractor will help you understand all the financial benefits you can expect to receive. And, qualified contractors will keep pace with changes in incentive levels and qualification requirements.
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