In fact, Arizona’s renewable portfolio standard mandates that the state is required to acquire 15% of its energy from renewable sources by 2025. Of that 15%, 30% of that renewable energy must come from places like homes and businesses.
Because of this, Arizona has implemented a tax incentive plan to help encourage residents to make the change to solar energy.
That brings us to the first available credit.
Residential Solar Energy Credit
To help encourage homeowners to make the change over to solar energy, Arizona offers the Residential Solar Energy Credit to make the transition more affordable. This credit offers homeowners 25% back of the total cost of the solar energy system (at a maximum of $1,000). If the credit exceeds the taxes that you owe, you’re able to carry it over for a maximum of five years.
Sales and Property Tax Exemptions
When you purchase a solar energy system for your home, you’re exempt from sales tax. Since solar energy systems can be quite expensive upfront, not having to pay sales tax saves you a hefty chunk of money. Also, you’re exempt from paying any additional property taxes. Thus, you aren’t penalized for the value that you add to your home with the solar system.
Federal Solar Tax Credit
In addition to the money that you save with the Arizona tax credits and benefits, people who purchase solar energy systems for their homes outright are also eligible to save money with the Federal Investment Tax Credit (ITC).
After taking away the money that you save on your system through your state initiatives, you then save an additional 30% of the cost of your system. With that said the value of this credit will begin to drop at the end of 2019. At the beginning of 2020, the credit drops to 26%. It then drops even further in 2021 to 22%.
With all of the available tax credits, the time to purchase a solar energy unit is now. If you wait too long, you may miss out on some of these great opportunities.
