Harnessing Solar Energy in Arizona: A Comprehensive Guide

Arizona- a best state for solar energy, renowned for its vast deserts and abundant sunshine, is a prime location for solar panels Arizona. With an average of 6.5 peak sun hours daily and over 300 sunny days annually, the Grand Canyon State offers ideal conditions for harnessing solar power. This potential has led homeowners, businesses, and utilities across the state to increasingly turn to solar energy, making Arizona a leader in this clean, renewable resource. Some of the world’s largest solar installations are located here, underscoring its commitment to sustainable energy.

Is Solar Worth It in Arizona?

Are solar panels worth in Arizona, absolutely! Given the state's abundant sunshine and the numerous incentives available, installing solar panels in Arizona is highly beneficial. Solar energy reduces reliance on fossil fuels, significantly lowers energy bills, and contributes to a more sustainable environment. With over 300 sunny days a year, solar panels in Arizona generate ample electricity, making them a worthwhile investment for both homes and businesses.

Do Solar Panels Increase Home Value in Arizona?

Yes, they do. Installing solar panels in Arizona can significantly increase your home’s value. Studies show that homes with solar panels sell faster and at higher prices than those without. Additionally, Arizona's property tax exemption ensures that homeowners benefit from the increased value without additional taxes. This makes solar panels an excellent investment for increasing property value while contributing to energy efficiency.

How Much Do Solar Panels Cost in Arizona?

The cost of solar panels in Arizona can vary based on system size, installation complexity, and other factors. On average, the cost ranges from $10,000 to $30,000 before incentives and rebates. However, with federal and state tax credits, property and sales tax exemptions, and other incentives, the overall cost can be significantly reduced. This makes solar energy a cost-effective option for many Arizona residents.

Arizona Solar Incentives

Federal Solar Tax Credit

Arizona residents can benefit from a 30% federal solar tax credit, significantly offsetting the initial cost of solar installation. This credit will decrease to 26% in 2033 and 22% in 2034, before expiring in 2035 under the Inflation Reduction Act.

Arizona State Residential Solar Income Tax Credit

The state offers a solar tax credit equal to 25% of installation expenses, capped at $1,000. This credit is available to homeowners during state tax filing but excludes those who lease solar systems or participate in power purchase agreements (PPAs).

Property Tax Exemption

Installing a solar power system can increase home value, but Arizona’s property tax exemption ensures that homeowners do not pay taxes on this added value. This exemption applies not only to solar panels but also to other energy-efficient upgrades like solar water heaters and thermal systems.

Sales Tax Exemption

The Arizona Department of Revenue offers a sales tax exemption for solar energy equipment and its installation, provided the work is done by approved contractors. This exemption, however, does not cover accessories like solar battery storage.

Net Metering

Most rooftop solar installations in Arizona are eligible for the net billing program, allowing homeowners to receive credits for excess energy produced by their solar systems. Though credited at a non-retail rate, this system helps reduce overall electricity costs.

Commercial Solar Incentives

Commercial ITC

Businesses in Arizona can also benefit from the 30% federal solar investment tax credit for installing solar energy systems, applicable to both photovoltaic (PV) and solar thermal systems.

Modified Accelerated Cost Recovery System (MACRS)

The MACRS allows businesses to recover the cost of solar energy equipment through depreciation deductions, offering significant tax savings.

Commercial Solar Energy Credit

Arizona provides a state tax credit for commercial solar installations, equal to 10% of the system cost, up to $25,000 per installation.

Solar Grants and Incentive Programs

Various utility companies and organizations in Arizona offer grants and incentive programs to assist businesses in offsetting solar installation costs.

Ready to Go Solar?

SolarSME, a leading solar installation company in Arizona, is dedicated to delivering high-quality solar solutions tailored to the needs of homeowners and businesses. Contact SolarSME today to schedule a consultation and learn more about custom solar solutions designed for Arizona’s unique climate and energy needs. Harness the power of the sun and start saving with solar energy now.