Solar Panel Initiatives, Tax Breaks and Deductions

    Anyone’s who’s visited Arizona for even a day knows that the sun shines just a tad bit brighter on the Grand Canyon State than others. With that in mind, federal, state and local governments have taken steps to give residents and businesses incentives for harnessing the power of the Sun via qualified energy devices. Here’s a brief list of some active incentives and tax credits available in and around Arizona:

    –          City of Chandler: Expedited Plan Review for Green Buildings: Adopted in 2008, this resolution established incentives for building green/LEED structures in the private sector. To be eligible, architectural teams must include a LEED-certified professional or hire a consultant with similar qualifications.


    –          Residential Solar and Wind Energy Systems Tax Credit: Established in 1995, this credit is made available to taxpayers who implement wind and/solar energy devices in their homes. The credit is allowed for up to 25% of the taxpayer’s total costs with a maximum credit of $1,000. Qualifying technologies include, but are not limited to:

    • Water heaters, photovoltaic phones and street lights, solar day lighting systems and wind-powered pumps.

    –          Energy Equipment Property Tax Exemption: To qualify for this exemption, residents or business owners have to show proof to the county tax assessor the installation of any qualified energy efficient building components. Documentation must be submitted no less than six months before notice of full cash value.

    –          Solar and Wind Equipment Sales Tax Exemption: To secure this tax exemption, a solar energy retailer or a solar energy contractor has to register with the Arizona DOR before selling or installing any solar devices in your home of place of business. This exemption is set to expire on Dec. 31, 2016.

    –          APS – Multifamily Energy Efficiency Program: a utility rebate program, this allows for multi-family residential areas and qualified construction sites to receive a free energy assessment and qualify for rebates by adhering to APS energy efficiency standards. This rebate program was put in place in an attempt to meet Arizona’s 22% energy reduction by 2020.

    –          Qualifying Wood Stove Deduction: This incentive, established in 1994, deducts the cost of converting any existing wood fireplace into a qualifying wood stove. The $500 maximum deduction applies to both the purchase and installation of the new stove. It is also tax deductible. This deduction only applies to taxable years after Dec. 31, 1993.

    Could you qualify? To find out and view a complete list of tax initiatives, visit the Database of State Incentives for Renewables & Efficiency website.

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