If there’s one thing Arizona has no shortage of, it’s sunshine. That makes our state one of the best places in the country for a rooftop solar installation. However, adding solar power to your home is a big investment. So big, in fact, that some homeowners dismiss the possibility, believing it too costly.
What they may not know, though, is that there are numerous tax credits and rebate programs that apply to solar. The trouble is that the programs aren’t always straightforward to understand. To address this, here’s an overview of the solar power incentives available to homeowners in Camp Verde, AZ.
Energy Company Solar Programs
If you live in Camp Verde, Arizona Public Service (APS) is likely your electrical service provider. If you install solar power on your home, you will be eligible to participate in APS’s net billing program. Net billing requires the installation of a special electrical meter that can run bidirectionally.
When your solar system produces more power than you’re using, it will operate in reverse. As it does, APS applies a credit to your account for the electricity you feed into the grid. At the end of each billing period, you receive a bill for the electricity you used beyond your solar output. If your solar panels produced more energy than your home used, you may have a negative balance on your APS bill. Under the terms of the APS net billing program, you can even receive a check for any credit balance above $25.
You should know that APS had a dedicated solar rebate program called the APS Solar Partner program. It provided homeowners with a $30 monthly bill credit after the installation of a rooftop solar system. The program’s purpose was to help the utility understand the impact of added residential solar on grid stability. Unfortunately, the APS solar rebate program is no longer accepting applicants, and new installations will no longer qualify.
State Sales Tax Exemption
In the state of Arizona, there’s a 5.6% sales tax levied on the sale of most goods. However, there’s an exemption in place that makes the sale of solar power equipment tax-free. That may not sound like a big deal, but it can add up to some significant savings. That’s because the solar panels, wiring, and inverter equipment needed for your system represent the bulk of your upfront costs. Therefore, the sales tax exemption will meaningfully reduce the cost of your solar installation project.
Solar Property Tax Exemption
It’s also worth knowing that a new solar system won’t increase your home’s property taxes. Typically, major capital improvements to your home will cause an increase in your property’s assessed value. That, in turn, increases the amount of property taxes you’ll owe. However, solar power equipment is exempt from value assessment in Arizona. That means it will increase the potential resale value of your home, but not its assessed tax value.
State Income Tax Credits
The state of Arizona also extends a state income tax credit to offset the cost of installing a solar power system. It allows you to deduct up to 25% of the cost of your solar installation from your income tax bill. The credit has a maximum value of $1,000 and is nonrefundable. That means it only applies to any income tax you owe to the state. However, you can carry forward the value of your credit for up to five years. So, you can use the Arizona solar tax credit to eliminate up to $200 in tax liabilities every year until you exhaust it.
Federal Tax Credits
Currently, the federal government offers the single largest solar power incentive available anywhere. It lets you claim a tax deduction worth up to 30% of the cost of your solar installation. That credit began with the passage of the Inflation Reduction Act (IRA) in 2022. Like the state tax credit, the federal credit is also nonrefundable.
However, you can carry forward the remaining value of your credit for even longer, until 2034. That’s good news, since the tax credit itself has no maximum allowable value. You can even maximize your credit’s value by adding battery storage to your setup, which also qualifies.
Unfortunately, there’s been some recent bad news regarding the federal solar tax credit. It’s that the recently passed One Big Beautiful Bill (BBB) contains a provision that ends the credit completely. According to the new law, you’ll have to act fast if you want to take advantage of the federal credit. You must place your new solar equipment in service by December 31, 2025. The good news is that the changes to the credit don’t include eliminating its carry-forward eligibility. So, as of the time of this writing, you can still claim your full 30% credit between now and 2034.
Due to the significant changes made to the federal tax credits in recent months, you’d be wise to consult a tax expert before proceeding. They may advise you to make changes to your filing or tax withholding to maximize the benefits of the credit while it is still applicable. They should also have a far more up-to-date understanding of how the BBB changes impact homeowners.
Energy Efficient Mortgages
Finally, there’s a great program available that can help you finance the costs of installing a solar system. It is available through the Federal Housing Authority’s (FHA) Energy Efficient Mortgage (EEM) program. You can take advantage of the program in two ways. One is to include the cost of installing a new solar power system in the mortgage of a home you plan to buy.
Notably, the program modifies the underwriting guidelines for your potential mortgage. It excludes the part of your loan earmarked for a solar installation from your debt-to-income and housing expense-to-income calculations. In other words, you can qualify for the added funds, even if your income level would ordinarily disqualify you.
You can also use an EEM as a vehicle to refinance an existing mortgage while adding the expense of a solar installation to your loan. Under the program, the FHA insures your mortgage for its principal and added solar funds. That can help you qualify for a loan refinance that you may otherwise not have qualified for.
There is only one significant thing you must do to participate in the program. You must have a qualified residential energy efficiency inspector determine the estimated monthly energy savings your project should yield. Their estimate helps determine how much additional funding you qualify for based on your existing financial qualifications.
Camp Verde Solar Power Experts
As the leading residential solar power company in Camp Verde, Pur Solar and Electrical is the local authority on solar power. Our team of experts can provide you with detailed guidance on maximizing the available Camp Verde solar incentives. We’ve served locals since 1974, so you won’t find a more experienced solar company in the area. We are also Better Business Bureau accredited with an A+ rating.
So, if you’re interested in adding solar power to your Camp Verde home, call Pur Solar and Electrical today!
