Incentives and Rebates
Below is a list of the current incentives available for residential and commercial installations. Next to each is a link to the DSIRE website for full explanation and IRS documentation for each item listed below.
- Federal tax credit of 30% of initial cost
- NOW Un-Capped 30% credit for residential installations More Info...
- Credit for commercial installations are extended and at 30% as well! More Info...
- Arizona state tax credit of 25% up to $1,000 for residential installations More Info...
- Arizona state tax credit of 10% up to $25,000 for commercial installations More Info...
- Accelerated state and federal depreciation for commercial installations (solar considered a five-year asset)More Info...
- APS Rebates $1.95 per Watt for residential installations
- SRP Rebates $2.15 per Watt for residential installations (capped at $10,750)
- System cost is state sales tax exempt
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Additional Incentives
Solar Energy Property Tax Exemption
100% of increased value:
Arizona’s property tax exemption was established in June 2006 (HB 2429) and applies to “solar energy devices and any other device or system designed for the production of solar energy for on-site consumption.” For property tax assessment purposes, these devices are considered to add no value to the property.
A "solar energy device" for the purpose of this incentive is defined as "a system or series of mechanisms designed primarily to provide heating, to provide cooling, to produce electrical power, to produce mechanical power, to provide solar daylighting or to provide any combination of the foregoing by means of collecting and transferring solar generated energy into such uses either by active or passive means. Such systems may also have the capability of storing such energy for future utilization. Passive systems shall clearly be designed as a solar energy device such as a trombe wall and not merely a part of a normal structure such as a window."
Solar and Wind Equipment Sales Tax Exemption
100% of sales tax on eligible equipment:
Arizona provides a sales tax exemption* for the retail sale of solar energy devices and for installation of solar energy devices by contractors. The statutory definition of "solar energy device" includes wind electric generators and wind-powered water pumps in addition to daylighting, passive solar heating, active solar space heating, solar water heating, and photovoltaics. The sales tax exemption does not apply to batteries, controls, etc., that are not part of the system. More Info...
Income Tax Subtraction for Energy Efficient Residences
Arizona provides an individual income tax subtraction to the original owner of a new energy efficient home. The credit may be claimed in the year that the house is sold. It is equal to 5% of the sales price excluding commissions, taxes, interest, points, and other brokerage, finance and escrow charges and cannot exceed $5,000. Energy efficient residences include new single family-residences, condominiums, or town houses that exceed the 1995 Model Energy Code Threshold by at least 50% (90 points) as determined by an approved rating program. The subtraction is valid for taxable years beginning after December 31, 2001 and ending before December 31, 2010.
