One of the best solar incentives in Arizona is the Energy Equipment Property Tax Exemption. This incentive promotes clean energy adoption by waiving 100% of the value added to your property after installing solar panel systems and other sustainable equipment.
Arizona’s Energy Equipment Property Tax Exemption offers significant financial benefits for property owners investing in renewable energy systems.
Understanding Property Taxes in Arizona
Property taxes are calculated as a yearly percentage of your property’s market value. Home improvements that increase a home’s value can also increase annual property taxes. Because energy equipment can significantly boost your home’s value, this would normally result in increased property taxes.
Overview of the Energy Equipment Property Tax Exemption
The Arizona Energy Equipment Property Tax Exemption waives any addition to your property taxes based on the added value of installing renewable energy systems. Based on the Arizona Revised Statutes § 42-11054, the purpose of this exemption is to promote adoption of sustainable energy throughout the state of Arizona. The tax incentive was introduced in June 2006.
Eligible Energy Equipment
What renewable energy equipment is included in the property tax exemption?
- Solar energy devices and systems (panels and inverters)
- Geothermal systems
- Heat pumps
- Hydroelectric systens
- Energy storage systems
Qualification Criteria
To qualify for the Arizona Energy Equipment Property Tax Exemption, you must own a residential, commercial, or industrial property and provide documentation that the approved systems have been installed. Installations must meet local building codes and conform to standard use of your chosen sustainable energy system. Documentation provides proof of installation and value submitted to the county assessor.
Application Process
In order to access the property tax exemption form, you can download form TY2025 on the Arizona Department of Revenue website. Submit this form and your installation documentation to the county assessor’s office before the end of the year.
Financial Benefits
The tax savings for a residential solar system will depend on the size of system you install and the total market value added to your house. The long-term financial impact can equal thousands of dollars in discounted property taxes while also enjoying the cost-saving advantages of solar power generation. The tax exemption adds to your solar ROI and helps earn back your investment through savings even faster.
Steps to Take Advantage of the Exemption
You can get the most out of the Arizona Energy Equipment Property Tax Exemption after your solar panel installation with the four following steps:
- Assess your property’s suitability for renewable energy
- Consult with renewable energy installers
- Obtain necessary certifications
- File for the exemption
Conclusion
Arizona’s Energy Equipment Property Tax Exemption is designed to help you save on renewable energy installations, from battery storage to full solar panel systems. Each time you improve the value of your home with sustainable energy upgrades, you can save on the property tax by submitting the right forms and documents before the end of the year. This can make achieving solar even more affordable for Arizona residents. Explore renewable energy options for your home. Contact us today to get a free quote on a solar panel system.
