How To Save Money When Purchasing Rooftop Solar Panels

Background
Solar panels capture sunlight and convert the sunlight into electricity that powers your home. By installing solar panels and generating electricity on-site, you can expect lower monthly utility bills. According to the U.S. Department of Energy, solar is considered an upgrade to your home and can increase your home’s value by about $15,000. Pairing solar with a battery storage system will allow you to use solar-generated power at night and during power outages. In addition, as part of the federal Residential Solar Energy Tax Credit, you may be able to use a tax credit to purchase and install rooftop solar and another tax credit to add a battery storage system to your home (see below).

Federal Tax Credit and Requirements
1. Federal Residential Solar Energy Tax Credit
a. The tax credit for solar photovoltaic (PV) panels or cells is in effect through December 31, 2032. The tax credit may include labor costs for onsite preparation, assembly, or original installation of the property as well as wiring, inverters, and mounting equipment. In addition, the tax credit can be used for relevant permitting fees, developer fees, inspection costs, and sales taxes on eligible expenses.
b. The Residential Solar Energy Tax Credit is part of the Residential Clean Energy Tax Credit. The Residential Clean Energy Tax Credit equals 30% of the costs of new, qualified clean energy property. Each year that you install eligible property, you can claim the maximum annual credit up to your tax liability amount. Unused tax credit amounts can be carried forward and applied against future tax year liability. See www.savingenergytips.org for additional opportunities to save money and save energy with tax credits.
c. To claim your tax credit, you will need to file Form 5695.

2. IRS Requirements
a. The solar PV system must be installed between January 1, 2017 and December 31, 2034. The solar PV system needs to be located at your primary or secondary residence in the U.S. and you must either own the system or purchase a portion of an off-site community solar project.
b. For systems installed after December 31, 2022, energy storage devices must have a capacity rating of 3kWh or greater.
c. The solar PV system must be new or being used for the first time. Credit can only be claimed on the original installation of the solar equipment.

Arizona Related Benefits
1. Arizona Department of Revenue’s Income Tax Credit for Residential Solar Devices
a. The state tax credit is 25% of the cost of the system and installation or $1,000, whichever is less. If another system is installed in a later year, the cumulative credit cannot exceed $1,000 for the same residence.
b. The federal and state tax credit can be received without any reductions from filing for both.
c. The credit will not be given if you lease a solar system.

2. Utility programs
Arizona Public Service, Salt River Project, and Tucson Electric Power have solar related programs that may help their customers save money. See the website of your utility for details including eligibility requirements and potential tax credit impacts.

3. Non-profit resources
Arizona Solar Energy Industries Association (AriSEIA), Solar United Neighbors (SUN), and Vote Solar recorded a webinar and compiled a consumer-oriented guide that includes resource links and useful information such as finding a solar company, choosing an installer, and questions to consider before going solar. AriSEIA has a webpage that includes other helpful information.

If you or someone you know need help paying for utility bills or appliances — including air conditioning, you can contact Wildfire, a non-profit organization with partnerships across the state of Arizona. The Arizona Department of Economic Security (ADES), through the Low Income Energy Assistance Program (LIHEAP), offers additional help with utility bills for qualified households.

*Please note the above information taken from government and Arizona utility websites is subject to change. We recommend checking the relevant website(s) for updates as well checking out your local government’s website as they may also offer incentives for installing rooftop solar. Further, we recommend checking out our webpage for additional opportunities to save money and save energy: www.savingenergytips.org

For more information: [email protected] or (602)252-9227.