Phoenix, Arizona boasts 300 sunny days, making it an ideal city to harness solar energy. Whether you’re a homeowner or business owner in the city, a switch to solar is a smart investment. Solar power in Arizona could offer 100% savings in electricity with the help of solar incentives. Better still, you cut reliance on fossil fuel-powered fuel which is a great win for the environment.
For a long time, the biggest barrier to the adoption of solar energy has been the high cost of the technology. Arizona overcomes this challenge by offering excellent Solar incentives to lower the overall cost of solar energy projects. If you plan to switch to solar in Phoenix, you can now leverage these solar incentives to cut the cost of solar power installation.
Read on to find out different solar incentives and other programs to reduce the cost of your solar energy project.
1. FEDERAL SOLAR INVESTMENT TAX CREDIT (ITC)
How would you like some tax credit? If you buy and install solar panels in Arizona in 2021, you can now earn a 26% federal tax credit. This enticing tax credit will drop to 22% in 2022 and will end in 2024. If you haven’t started the switch to solar, it’s time to talk to a solar panel installer in Phoenix, AZ.
You’ll get credit for your income taxes to lower your tax bill. To appreciate how much you can save with the residential ITC, consider that an average 5-kilowatt (kW) solar system comes to around $18,925. When you apply for the tax credit, the cost comes down to $14,005.
2. ENERGY EQUIPMENT PROPERTY TAX EXEMPTION
Are you worried that your home’s solar energy project will lead to higher property taxes? You need not worry because Arizona’s Energy Equipment Property Tax Exemption considers your situation. When you install solar panels on your home, you increase the value of the property by about 20x the annual electricity savings.
This is a huge increase in value and in ordinary circumstances, it translates to higher property taxes. Luckily, the energy equipment property tax exemption ensures this increase in home value is exempt from property tax assessments.
This is one of the most popular solar incentive programs and it saves you the cost of additional property tax on renewable electric energy. If you’ve installed solar panels on your property, you get property tax exemption on the value added to your home.
3. Residential Arizona Solar Tax Credit
Homeowners in Phoenix can take advantage of the Arizona solar tax credit. Under this system, every resident who installs solar panels gets reimbursed 25% of the cost of the hardware against your personal income taxes owed in that year up to $1000. This is a great incentive by the government to promote solar projects in the state. If you plan to install solar panels in Phoenix, talk to your installer to learn how you can qualify for this tax credit.
4. Solar Equipment Sales Tax Exemption
While the cost of solar equipment continues to fall, it’s still high for most homeowners. An average 2,500 square foot home in Phoenix, Arizona would require about 25, 300-watt solar panels. Buying all these solar panels and paying for the installation cost is a huge expense for property owners. That’s why the solar equipment sales tax exemption comes in handy. The solar equipment you buy in the state is exempt from sales tax which translates to savings in your project.
Using the Right Solar Installer
Your solar energy project is only as good as the installer you choose. If you want to maximize these solar incentives, work with a licensed and reputable solar installation company in Phoenix, AZ. Total Solutions have the expertise and technology to deliver safe and reliable solar installations.
Talk to our Solar Phoenix team at Total Solutions today for all your solar needs in Phoenix, AZ. We are also available in Columbus.