If you have been waiting to go solar in the Grand Canyon state, now is the time! With an annual sunshine rate of over 85%, Arizona ranks #2 in the nation for solar energy potential.
Furthermore, Arizona is one of a few other states that offer several solar incentives and other state-specific rebates. Such incentives significantly offset the cost of installing and maintaining a solar system at your residence.
How Solar Works in Arizona
Most solar installations in Arizona can be part of their utility’s net billing scheme. Just like net metering, net billing gives you credits on your electricity bill for any surplus solar energy you generate and don’t use. The exact amount that you’ll be credited varies depending on your utility provider, but you can expect to earn 70% to 95% of the retail rate of electricity for any excess power you send back to the grid.
Here are the latest net billing figures for Arizona’s major utility companies in 2023:
- Arizona Public Service: Excess generation credit rate $0.09 per kWh, retail rate $0.12 per kWh
- Tucson Electric Power: Excess generation credit rate $0.08 per kWh, retail rate $0.15 per kWh
- UNS Electric: Excess generation credit rate $0.08 per kWh, retail rate $0.11 per kWh
The good news is that your excess generation credit rate is locked in for 10 years when you go solar in Arizona, so you’re protected against future drops in the net billing rates.
Types of Solar Incentives and Tax Credits Available in Arizona
There are plenty of additional financial incentives for residential solar installations in Arizona. These include:
Federal Solar Tax Credit
The Residential Clean Energy Credit, also known as the Federal Solar Tax Credit, is the largest incentive scheme available in Arizona. You could get a federal income tax credit of up to 30% of the total cost of installing your solar system.
The incentive applies to not only solar panels but also batteries. This is why it makes more sense to invest in battery storage when going solar as well.
Arizona State Residential Solar Tax Credit
Besides getting the federal solar tax credit, most Arizona homeowners can also receive the state’s solar tax credit. This credit is valued at a quarter of the total cost of your solar system, with a maximum amount of $1,000.
Energy Equipment Property Tax Exemption
Installing solar power can significantly raise your home’s value. Solar panels qualify for a property tax exemption in the Grand Canyon state. Other than solar panels, this tax break also applies to:
- Solar thermal electric
- Solar water heaters
- Passive solar technology
- Solar thermal process heaters
- Solar pool heaters
- Solar space heaters
- Other solar-powered appliances
Solar Equipment Sales Tax Exemption
Solar energy devices in Arizona are also eligible for a sales tax exemption. Given that your new solar system could cost thousands of dollars, this exemption can really add up.
We Will Help You Go Solar in Arizona
Solar Optimum is one of Arizona’s most reputable residential solar installation companies. We can help you with everything solar, from assessing your home’s energy needs to guiding you on how to claim your tax credits after installing solar power. Contact our solar experts today to take the next steps in becoming a clean energy champion.
