Over the past few years, the cost of electricity in Arizona has been rising steadily. With the new Arizona Public Service (APS) rate, many households are likely to feel the squeeze. Fortunately, sustainable energy sources can help to reduce your reliance on the grid. Switching to solar, in particular, provides many benefits. This includes offering you cheaper power and protecting you from future increases in electricity costs.
When Does the APS Rate Take Effect?
In October 2022, APS, the largest electric utility in the state, proposed a new rate formula to the regulators. This application included a request to approve a rate increase, the largest in the last few decades. The APS rate came into effect in December 2023.
This move leads to an increase of up to 20 percent for the most common rate plans, which can greatly impact Arizona residents who already use more energy than other states. Fortunately, you can take steps to protect yourself from the impending financial impact.
Ways To Prepare for Arizona’s Rising Electricity Costs
The type of energy source you use has a big impact on your cost of electricity. Solar is a great option if you are looking to reduce or eliminate your electric bills.
If you’re worried about the high upfront investment associated with solar panels, rest assured that there are ways through which you can reduce this financial burden. Arizona has some of the best solar incentives nationwide, which pair greatly with federal incentives.
Federal Solar Tax Credit
The federal solar tax credit is an investment tax credit offered by the federal government. This incentive allows you to claim up to 30 percent of the total cost of your solar system. That way, the credit reduces the federal income taxes you owe, effectively saving you money and making your solar installation more cost-efficient.
State Solar Tax Credit
Besides the federal solar tax credit, Arizona offers a solar tax credit of 25 percent of the total cost of a solar system, with a maximum $1,000 tax deduction. Residents who install solar panels can use the credit toward state income taxes. Also, the purchase of solar equipment in Arizona is exempt from sales tax, meaning you get to save money immediately after you buy the equipment.
Property Tax Exemption
Solar panels can add to the overall value of your property. Ordinarily, an increase in the value of your property causes you to pay more in property taxes. Fortunately, Arizona has a solar property tax exemption. This means that you have the right to exclude the value added due to a solar system installation from the valuation of your home for taxation purposes.
Overcome Higher Energy Bills With Solar
Are you planning to go solar to combat the rising cost of electricity in Arizona? Solar Optimum can help. With years of experience, we offer the knowledge and quality you need for your Maricopa County and the Greater Phoenix area home. Contact us today to discover more advantages of going solar and learn how to get started.
