As one of the sunniest states in the country, Arizona is a paradise when it comes to solar power. So it’s no surprise that it consistently ranks in the top 10 solar states in the U.S. While generous sun is the biggest factor, Arizona’s solar incentives and the federal solar tax credit help to contribute to its competitive solar capacity.
Arizona home solar system owners are eligible for a credit worth 25% of their system cost or up to $1,000, whichever is less. If the credit exceeds the taxes you owe, you can continue to carry it over for up to five years.
Homeowners understand the value of property tax exemptions, so it’s good news that Arizona is offering an Energy Equipment Property Tax Exemption. And since purchased solar systems may increase the value of your home by up to $15,000 on average, you’ll get even more bang for your buck if you decide to move.
Arizona’s Solar and Wind Equipment Sales Tax Exemption is a welcome addition to the incentives available in the Grand Canyon State. That means you can pocket the extra 5.6% state sales tax you would normally pay when you buy a home solar system and battery.
In addition to Arizona’s solar incentives, you’ll be eligible for the federal solar tax credit if you buy your own home solar system outright. The federal solar tax credit gives you a dollar-for-dollar reduction against your federal income tax. The 30% tax credit applies as long as the home solar system is installed by December 31, 2019. Starting in 2020, the value of the tax credit will step down to 26%, and then again to 22% in 2021. After 2021, the tax credit for residential solar ends. Learn more about federal solar incentives.