Solar Incentives

At SouthFace Solar, helping our fellow Arizonans save on their solar installation costs is included in our job description. We consider it a job well done when we have helped you save the maximum amount through the following solar incentive programs.

One of the biggest hurdles to solar energy is the upfront cost of installing solar panels. However, since solar energy is a positive for the homeowner, the local Arizona climate, and the global environment, there are many incentives and tax credits available to those looking to invest in their future energy costs and reduce their carbon footprint.

Here at SouthFace Solar, helping our fellow Arizonans save on their solar installation costs is included in our job description. We consider it a job well done when we have helped you save the maximum amount through the following solar incentive programs.

The Federal Solar Investment Tax Credit

Of the many solar incentives available, the federal solar tax credit (known as the Investment Tax Credit, or the ITC), can offer big savings on the cost of going solar. Good news for homeowners and businesses as the tax credit was extended for a decade in August of 2022 with the passage of the Inflation Reduction Act (IRA).  Under the new schedule, the federal solar tax credit allows you to reduce the amount of federal taxes you owe by 30% of your total installation costs until 2032. And if that 30% is larger than what you owe in taxes, you can roll the remainder over for another year!

Plus—while your solar battery system could previously only qualify for the tax credit as long as it received 100% of its energy from renewable sources—starting in 2023, stand-alone solar battery storage systems will also qualify for the tax credit. 

To be eligible to claim the solar tax credit, you must own your solar panels (no leasing), have sufficient taxable income, and own the property where the solar energy system is being installed. 

The Arizona State Tax Credit

The Arizona State Tax Credit for solar has expired as of January 1, 2021. This state solar incentive offered one-quarter of your total solar installation costs (25%) with the max benefit capped at $1,000. SouthFace Solar & Electric continues to monitor the local state policy developments for any reinstatement of the solar tax credit or further extension. If you have any questions about the state solar tax credit, please get in contact with us.

Additional Solar Tax Exemptions

On top of these more lucrative solar panel tax credits, you don’t have to worry about paying sales tax on your solar installation costs, and though installing solar panels can increase the resale value of your home, you won’t have to pay any additional property taxes thanks to the Energy Equipment Property Tax Exemption.

Commercial Solar Savings: MACRS Depreciation

Considering installing solar to help reduce operating expenses of your Arizona business? Under the Modified Accelerated Cost-Recovery System (MACRS) tax law, you can take a first-year “bonus” 100 percent depreciation, or opt for a 5-year MACRS schedule. This decreases the payback period for your commercial solar installation costs, meaning you can turn your solar production into profit that much faster!