It may not be the Sunshine State, but Arizona gets more than its fair share of brilliant, cloudless days. This makes investing in a solar panel system particularly attractive to local homeowners. After all, who wouldn’t like to enjoy a limitless source of free, environmentally friendly energy in their home? But solar panel systems cost money, and many homeowners find themselves wondering whether they can even afford the cost of one of these systems before enjoying its benefits.
If you’ve found yourself musing over going solar, you’ll be happy to learn that Arizona residents qualify for several different tax credits that can help cover the cost of one of these systems. Together, these credits can make investing in solar energy resources surprisingly affordable. For example, you can expect to make use of the:
Federal Solar Investment Tax Credit (ITC)
One of the most popular incentives for going solar in the United States is the Federal Solar Investment Tax Credit (ITC). When you invest in a new solar panel system for your home, you can apply for this credit to recoup 26% of your system’s cost in your federal income tax payment. This tax credit applies to all solar systems installed before December 31, 2022.
Arizona Residential Solar Energy Tax Credit
Of course, the federal government isn’t the only organization offering a tax break for your new solar panel system. The Arizona state government will also allow you to enjoy a tax credit in your state income tax amounting to 25% of the cost of your home solar system (up to $1,000). This is on top of the savings offered by the ITC. And, unlike with the ITC, there is no deadline for installation.
Solar Energy Equipment Property Tax Exemption
Every time you perform a significant improvement project at your home, your property value increases. This is one of the reasons why homeowners can make a profit when reselling their property down the road. Of course, an increase in property value inevitably results in an increase in property taxes.
You may assume that investing in a solar panel system would result in higher-than-average property taxes moving forward. However, the Arizona government offers a solar energy equipment property tax exemption. Simply put, when you invest in a solar panel system, your increase in property value won’t result in increased property taxes.
Solar Equipment Sales Tax Exemption
Only four states in the United States don’t collect sales tax, and Arizona (unfortunately) isn’t one of those states. But lucky for you, the government offers a sales tax exemption of 5.6% on solar energy systems. This means that your purchase of solar panels, a solar inverter, and any other solar resources you might need won’t be taxed at the time of purchase.
Of course, tax credits aren’t the only way you can save when buying solar panels for your Arizona home. Many local companies offer convenient financing options to qualifying homeowners. This can help you enjoy net savings almost immediately after your system is installed.
If you’re looking to maximize your energy savings after going green, it helps to partner with a solar panel company you can trust. FOR Energy is that company. Contact us today to learn more.