Sunny Arizona has the capacity to excel in the solar industry. We’ve been making great strides to increase our renewable energy output, but there is still room to grow. More people are switching to solar every year, and it’s getting more and more affordable to harness this renewable and clean energy for your home or business. In the Valley of the Sun, there is infinite potential for solar power. Check out some numbers behind solar in our state, then get in touch to take the first step toward a brighter future!
It’s no secret that going solar can save you money on energy bills, but did you know it can also save you money on taxes? At both the state and federal levels, there are tax exemptions and credits that can help you save big after switching to solar power.
It’s no secret that homeowners can save big on their bills with solar panels, but there are a few ways to save even bigger with solar in Arizona. If you’re thinking about choosing solar for your home, check out these incentives and credits to increase your savings.
The federal solar tax credit
If you're considering solar for your home, read up on the federal Solar Investment Tax credit (ITC). All homeowners qualify for this huge federal incentive, which can save you thousands of dollars on your solar installation investment.
The ITC lets home and business owners subtract 30 percent of the cost of installing their solar energy system from their federal taxes. The best part? There is no cap on the value of the credit.
According to a report based on EnergySage’s marketplace data, the average solar tax credit is about $9,000. Numbers like that make a big difference when you’re trying to decide how affordable going solar really is for your home.
The ITC tax credit has helped solar power explode in recent years, making it more affordable for homeowners and businesses across the country to go solar.
In 2015, Congress approved an extension for the ITC credit, allowing solar customers to claim a credit on their solar installations as long as they are operational by December 31, 2023. However, you can only receive the 30 percent credit if your solar energy system is installed by December 31, 2019. The credit will decrease in value for systems installed in 2020, and will continue to decrease until 2023 when the extension ends.
For more information on how to cash in on you solar tax credit, visit this step-by-step guide from Energy Sage.
State property tax exemptions
Arizona offers a property tax exemption for rooftop solar customers, and there is no cap on the amount of equipment you can claim on this exemption. To qualify for the exemption, you must provide documentation of your purchase and solar installation to your county assessor within six months of the installation.
Net metering credits
Arizona solar customers can also save big with net metering perks. When your solar energy system isn’t using energy, it feeds that extra power back into the grid. Your electricity company measures that unused energy and returns it to you in the form of a credit on your bill. These savings have an important catch, though. A pending APS rate case may cut these net metering credits for future solar customers. You must install your solar energy system before July 1, 2017 to take advantage of the current net metering rates! Don’t wait!
To learn more about the APS case and why it matters for the future of solar in our state, check out our latest rate case blog post.
For more incentives and loan programs, visit this solar savings resource.
Don’t miss out on these huge savings! Contact us today to find the best solar options for your home, and we’ll help you start on the path to solar savings.
In March, the Arizona Corporation Commission will cast a critical vote on the pending APS rate request case. This case is a huge deal for solar customers in our state, and will impact the future of solar in Arizona.
APS filed a request with the ACC in June of this year, proposing new demand fees on monthly bills. The proposed rate plan would reduce the amount of compensation rooftop solar customers receive for energy they send back to the grid, and the net metering credit could drop. The plan also requires solar customers to be on the two highest demand rates.
If approved, these new rate charges would only apply to new rooftop solar customers after next summer’s effective rate date (July 1, 2017).
This decision will be crucial in determining how we value solar in Arizona. APS says this change is necessary to accommodate the growth of solar in our state, but the demand for rooftop solar could take a drastic hit in the wake of a reduced net metering credit. Paired with the increased demand charge, making the choice to go solar may seem far less attractive to customers.
APS is offering a 20-year grandfathering clause to existing solar customers and customers who begin their solar installation before July 1, 2017. This clause will ensure that the existing net metering rules will apply to any systems installed before this date.
If you are considering solar for your home, start your solar installation as soon as possible to ensure this potential hike does not affect your solar energy system rates. Now is the time to take advantage of the 20-year grandfathering clause and ensure your investment aligns with more solar-friendly policies. Again, the potential rate hike would only apply to new solar customers after July 1, 2017. Contact us today to learn more about which solar options are best for your home.