3 Solar Incentives to Take Advantage of Before They’re Gone

Sabrina Lopez
March 19, 2018
3 min read

April is just around the corner, so it’s time to stop procrastinating and finally file our taxes away. While no one (to our knowledge) sincerely loves tax season, solar can make it fun and exciting. With federal and state tax credits, you can save on your taxes while reaping the benefits of clean, affordable energy.

There have been some changes and confusion surrounding the solar industry with the recent tariffs on certain imported panels. This recent blog post shows you our not-so-scary assessment of the tariffs.

Below are three of the main solar incentives available to anyone who adds solar to their home in Arizona. Some local utilities also offer rebates for implementing certain new technologies, although those are rare. For specifics in your utility district, It’s best to consult a local solar provider.

1. Federal Investment Tax Credit (ITC)

The ITC is a great way to make your solar energy system more affordable. With this incentive, you can take a tax credit off your personal income tax return for 26% of the solar system cost with no cap. This can be taken all in the first year or over five years.

The ITC is scheduled to ramp down again starting at the end of 2020, so this is the last year to take advantage of the higher credit while it lasts. This 26% credit is available through 2020 before it lowers to 22% in 2021 before ending permanently for homeowners in 2022. The ITC only applies to systems purchased with cash or through traditional financing. With a lease, the tax credit goes to the leaseholder rather than the homeowner. Consult your solar installer for details.


New ITC Graph

2. State of Arizona Tax Credit

At the state level in Arizona, not only is there no sales tax charged on purchasing a solar energy system, but you can also receive a state income tax credit of up to $1,000 for a solar purchase. Like the federal ITC, to qualify for the Arizona solar tax incentive, your system must be installed before the end of the tax year you wish to file for.

3. 0% down leasing options

Leases are great if you don’t want to commit to an initial down payment. Common to most capital leases, there are options for no money down or options with down payments that help reduce the monthly costs. Ultimately, the goal is to negotiate lower lease payments than your current utility payments.

For some retirees, leasing a solar energy system is an attractive option since you likely have minimal tax liability and would not benefit from the federal ITC (with a lease, the leaseholder receives the tax credit).

If you've been considering switching to solar, now is the time to act! With the 26% ITC ending, 2020 is surely the most important year for solar in more than a decade. Contact us below!