Arizona Solar Battery Backup Incentives—What You Need to Know

Renewable energy is starting to play a much larger role in how homeowners across the country are planning for a safer, sustainable, and more affordable future. After the large scale power outages that shocked the energy bills of homeowners in Texas, awareness of “demand response” charges has greatly increased (though the deregulated Texas electricity market is somewhat similar to how it works here in Arizona, homeowners in our neighborhoods won’t see energy bills in the tens of thousands). 

With solar energy storage options like solar power batteries, there are options for homeowners who are in the beginning stages of planning their solar installation and for those who already have solar panels installed on their homes to save excess electricity and keep the lights on during an outage. But are they worth the added expense, and are there any incentives available to reduce the upfront cost?  

Here is everything you need to know about reducing the cost of solar plus storage installation for your Maricopa, Pinal, Gila, or Yavapai County home.

Saving on Solar Battery Installation: How the Federal Solar Tax Credit Works

Perhaps the most well-known solar incentive is the Federal Solar Tax Credit, which allows those who have invested in solar to reduce their federal taxes by an amount equal to 26% of their total installation costs until the end of 2022 when it drops to 22%. 

Many have wondered if this tax deduction extends to solar energy storage—and it can! Though it must be under the following conditions:

You must own your system (no solar leasing) and solar batteries must derive 100% of their energy from an onsite solar array to qualify for the federal solar tax credit.

The Past, Present, and Future of the Federal Solar Tax Credit

The federal solar tax credit used to allow for a 30% reduction in federal taxes, which was reduced down to 26% in 2020 as the program began a step-down process. However, at the last minute, legislation was passed that extended the credit at its current rate for another two years, allowing more homeowners and businesses to save on the cost of solar installation. 

At present, the percentage will drop to 22% at the beginning of 2023 and is set to end entirely for residential systems from 2024 and beyond. However, there is optimism within the industry that this valuable incentive could be extended again before it starts to decline and expire. 

Solar Battery Incentives in Arizona

There are also ways to save on your solar plus storage through the rebate programs provided by Arizona utility companies:

SRP Battery Storage Incentive – Reserve your spot by April 30th! 

If you pay SRP for your residential electricity, you can sign up for a rebate of up to $3,600 to offset your solar battery costs, all depending on the size of your system ($300 per kWh-DC). This is on a first-come, first-served basis but you have to reserve your spot by April 30, 2021! You can sign up here and see how many spots are still available—but you must complete your reservation application by July 29, 2021.

ACC and APS Solar Battery Pilot Program – Launching 2021

Additionally at the end of last year, the Arizona Corporation Commission approved a new solar battery pilot program for the Arizona Public Service Company to offer homeowners a rebate of “$2,500 for the purchase and installation of at-home energy storage devices that can capture electricity from the grid or rooftop solar and dispatch it for later use.” 

This three-year pilot program would allow homeowners to receive an incentive between $300 to $500 per kilowatt and those already grandfathered in under old Arizona net metering rules will continue to be grandfathered, if they install a new solar energy storage system. 

This pilot program would be made available later this year. You can get more details here.

Wondering What Your Installation Costs Will Be? Get a Quote!

If you are wondering what all this can mean for you, including how many batteries you will need for your solar-powered system, you are probably going to want to find out what your total costs will be. With a free solar quote from SouthFace Solar & Electric, we can estimate the size of your future solar PV installation based on factors like your home’s location, the pitch and direction of your roof, and your current energy usage and needs. From there, we can put together a quote that includes all available incentives, giving you a clear picture of what your installation costs might look like should you choose to invest in a solar battery system or add energy storage to an existing system.

Want to save on a solar battery system that will protect you from demand response charges, keep your lights on, and reduce your carbon footprint? Schedule a free solar quote with SouthFace Solar & Electric at 480-405-6105 or get in touch here.