Arizona: A Guide to Residential Solar Energy
The Arizona Supreme Court has made it much more affordable for homeowners to turn to solar paneling to power their homes. In a recent ruling that affects anyone leasing solar panels in 2019 and beyond, the court “spared tens of thousands of homeowners who lease rooftop solar panels from paying property taxes to the state on that equipment,” according to USA Today’s azcentral.com. Homeowners who bought or financed their solar panels haven’t had to pay taxes on those investments since 2006.
That is just one of the ways in the installation of solar panels in Arizona has seen a positive response and rise in recent years. As of the end of 2018, the Solar Energy Industries Association (SEIA) ranked the state third in the country — nearly 7 percent of the state’s energy comes from solar. Additionally, SEIA ranks Arizona seventh in the nation in projecting its growth over the next five years.
Indeed, increased competition in the state since 2012—and the nature of the market on a national scale—means residents are primed for home value increases if they install solar panels in Arizona. And when it comes to home value, researchers project the value of a home increases up to $15,000 on average, according to the Berkley Lab, one of the federal government’s national renewable energy laboratories. That doesn’t even take into consideration the massive savings solar paneling affords homeowners—or seasonal price fluctuations that make winter a possibly perfect time for your solar home improvement project.
Like every other state, Arizona has a unique set of incentives, benefits, and challenges when it comes to investing in solar panels for houses. Read our residential guide to understand what you should know as a homeowner as you look for the best contractor to install solar panel systems under the Grand Canyon State’s nourishing sun.
A well-informed and reliable contractor will go over each detail of your installation with you, from expected savings to increases in home value. At Modernize, we frequently speak to homeowners about their home improvement projects. In our recent interviews, 90 percent of homeowners requested a checklist to help them find and vet contractors. Modernize now offers homeowners a free, digital Contractor Checklist as a simple, step-by-step guide to assist with your solar panel project.
Phoenix, AZ: Solar Energy Success Stories
Melisa Camp makes it her business to know Arizona house values: She’s been a realtor for nearly a decade.
“There [are] more homes being sold with solar panels now because we can actually track the data,” Camp told her local TV station Fox 10, and explained that since 2013, the market share for houses powered with solar panels has been growing. “… Every single year that we have been able to measure how many homes are being sold, every year that number is increasing.”
Camp, an expert in the field, installed her own panels in 2010, “an investment she says has already paid for itself and can pay off for others as well,” Fox 10 reported, “but both sellers and buyers have to be armed with knowledge.”
Indeed, solar panels have a sizeable effect on utility bills. Arizona residents can expect to save nearly close to $17,000 over 20 years.
Keep in mind this data serves as guidance for your journey to home improvement. Use it during your conversation with contractors in your area. Ask for this level of detail in your estimates and if jargon or complex wording seems confusing, ask for clarification.
A trusted contractor will be glad for the opportunity to explain what everything means and, more importantly, what it specifically means to you. For example, Arizona Homeowner Associations cannot prohibit you from installing solar panels — although they can certainly sometimes give you a headache.
When it comes to Arizona’s solar energy, existing financial incentives (and policy) only make it more lucrative for you to sustainably increase your property value.
Arizona Solar Panels: Incentives, Rebates, and Other Savings
There are currently nearly more than 115 incentives for homeowners to increase the value of their property by installing solar panels for houses in Arizona. Find details about each program at the state’s Database of State Incentives for Renewables & Efficiency (DSIRE).
Unlike many other states, Arizona discontinued its net metering policies in 2016, but that’s had little effect on the growing number of solar panel installations across the state, according to the Phoenix Business Journal.
“We believe with smart, stable policies in place, the Arizona solar market can continue to grow,” SEIA’s VP for State Affairs Sean Gallagher told the Journal. “And we anticipate energy storage becoming an important component of the Arizona market as the transition to post net metering occurs.”
Solid contractors installing solar panels in Arizona will be able to provide a list of applicable costs savings measures and help you navigate applying for and getting the most out of them. Learn enough to have a foundational understanding of these programs to best talk to your contractor about them once you’ve vetted and chosen one.
Residential Solar and Wind Energy Systems Tax Credit
Installing solar paneling for homes will increase property value for homeowners who have invested in their houses, and Arizona is investing right back in them. Each year, Arizona homeowners can get up to a $1,000 credit per residence, available to taxpayers who install solar panels for their houses. More specifically, you get 25 percent back on your purchase in the form of a tax credit, up to $1,000. So if your purchase was $4,000, a quarter of that would come back to you.
Find all the details at DSIRE’s profile for the program.
Energy Equipment Property Tax Exemption
Since 2006, the Arizona Department of Revenue has exempted homeowners from paying taxes on the added value of their property caused by installing any solar energy devices, equipment, or components.
In order to qualify, you must provide your county assessor with documentation affirming the actual purchase and installation of the eligible equipment. Be sure your experienced contractor has a grasp of what that process entails. Ask who will be filing the paperwork and handling the process to completion.
Find all the details at DSIRE’s profile for the program.
Other Arizona-specific solar energy programs include:
- Solar and Wind Equipment Sales Tax Exemption
- Town of Buckeye – Green Building Incentive
- City of Scottsdale – Green Building Policy for Public Buildings
- Solar Water Heating Program
- Sulphur Springs Valley Residential Energy Efficiency Rebate
- Residential Energy Efficiency Rebate Program
- Duncan Valley Rebate Program
- Residential Efficiency Program
Of course, you want to get the most out of local programs as well as federal ones, like the temporary Residential Renewable Energy Tax Credit, which applies to up to 30 percent of your installation. It is important to note that this federal credit is for systems placed in service by 12/31/2019. Solar Energy International reports that a typical five-kilowatt solar system installation in September 2018 would’ve dropped from $15,428 to $10,800 after the rebate is applied—but keep in mind its value is dropping and the credit could be completely gone by the early 2020s. Consult your contractor about this and other available credits and incentives to ensure your investment in the long-term value of your property is as easy on your current assets as possible.
That’s why you’ll want to find a contractor you can trust—a local professional who can get the job done and assist you with navigating local policy and regulation. The Modernize Contractor Checklist will help you vet a trusted contractor, so you can relax knowing your solar panel project is in good hands.