Solar Water Heating – Tax Credits, Rebates & Incentives
Many of Arizona’s utility companies offer financial incentives for the installation of residential solar electric systems. In addition, tax credits and sales tax exemptions may be obtained.
Currently, there are four levels of incentives for residential systems in Arizona: utility rebates, federal tax credits, state tax credits, and state and county sales tax exemptions.
Utility Rebate – Each utility company offers a different rebate amount that is paid after the system is installed and turned on.
Federal Tax Credit – This is now up to 30 percent of the system cost.
State Tax Credit – The state tax credit is $1,000. This can be carried forward for up to 5 years if your tax liability is low enough. For example, if you owe $500 in state tax, you would pay the State of Arizona $0 for the next 2 years – until you have reached a total of $1,000 in credits.
Local Sales Tax Exemptions – These exemptions save over 8 percent off the cost of each system.