Incentives

Incentives

The investment tax credit (ITC), also known as the federal solar tax credit, allows you to deduct 26 percent of the cost of installing a solar energy system from your federal taxes. The ITC applies to both residential and commercial systems, and there is no cap on its value.

How the Federal Tax Credit Works

The Federal Government will give you a dollar-for-dollar tax credit in the amount of 26% of your total solar system cost when you file your taxes (Form 5695). However, you must have the tax liability to take advantage of the credit. This is a nonrefundable tax credit, meaning you will not get a tax refund for the amount of the solar tax credit that exceeds your tax liability. However, you can carryover any unused amount of the solar tax credit to the next tax year, for up to 5 years.

2021

26% tax credit for both residential and commercial solar panels.

2022

26% tax credit for both residential and commercial solar panels.

2023

22% tax credit for both residential and commercial solar panels.

2024

No tax credit for residential solar systems!

State Incentives:

 AZ: Arizona offers a 25% credit of total cost of buying and installing a qualifying solar system against annual personal income taxes owed, up to $1,000.