Tax credits and utility rebates are confusing issues facing people wanting to take the next step to energy independence. Since we are in the business of educating people, we have made it one of our focus’ has been staying up on these important issues. But as with anything, we always advise that you seek guideance from your tax professional, to see how everything applies to your particular tax situation. Click the title of any section below to open the specific website in a separate window.
Federal Tax Credit
A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is on a new home, the "placed in service" date is the date of occupancy by the homeowner. Expenditures include labor costs for onsite preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year.
Arizona State Tax Credit
Arizona's Solar Energy Credit is available to individual taxpayers who install a solar or wind energy device at the taxpayer's Arizona residence. The credit is allowed against the taxpayer's personal income tax in the amount of 25% of the cost of a solar or wind energy device, with a $1,000 maximum allowable limit, regardless of the number of energy devices installed. The credit is claimed in the year of installation. If the amount of the credit exceeds a taxpayer’s liability in a certain year, the unused portion of the credit may be carried forward for up to five years.
APS Rebate
Through the Renewable Incentive Program, Arizona Public Service (APS) offers customers who install various renewable energy sources the opportunity to sell the credits associated with the energy generated to APS. Previously, APS only provided incentives for solar technologies, but they expanded the list of qualified renewables in 2008 to include all technologies eligible for Arizona's Renewable Energy Standard (RES). The solar technologies eligible for a rebate include photovoltaic (PV), solar hot water, solar HVAC and solar daylighting systems. Up-front incentives for PV may be de-rated based on expected performance.