Federal Incentive Tax Credit
Installing home solar may qualify you for a Federal Incentive Tax Credit up to 26% of the total cost of your solar system. This credit is available through the end of 2020. After that, the percentage steps down each year until it expires at the end of 2021. As a credit, you take the amount directly off your federal tax payment, rather than as a reduction to taxable income. Other than the cost of the system, including installation, there’s no limit to the dollar amount of this credit.
Qualifying systems include solar systems that generate home electricity. This credit is only available for improvements made to primary and secondary homes you own. You cannot claim a credit for installing solar power at a rental property you own; provided, however, there is an exception if you live at the rental property for part of the year. You will be required to reduce the credit to reflect the time you’re not there. For example, if you live in your rental home for three months a year, you can only claim 25% of the credit.
You must file IRS Form 5695 as part of your tax return to claim this credit. You calculate the credit on form 5695, and then enter the result on your form 1040. If you end up with a bigger credit than you have income tax due, you cannot use the credit to get money back from the IRS. Instead, you can carry the unused credit over to the following tax year. Carryover amounts may expire after the solar credit expires.
Federal Incentive Tax Credit
Installing home solar may qualify you for a Federal Incentive Tax Credit up to 26% of the total cost of your solar system. This credit is available through the end of 2020. After that, the percentage steps down each year until it expires at the end of 2021. As a credit, you take the amount directly off your federal tax payment, rather than as a reduction to taxable income. Other than the cost of the system, including installation, there’s no limit to the dollar amount of this credit.
Qualifying systems include solar systems that generate home electricity. This credit is only available for improvements made to primary and secondary homes you own. You cannot claim a credit for installing solar power at a rental property you own; provided, however, there is an exception if you live at the rental property for part of the year. You will be required to reduce the credit to reflect the time you’re not there. For example, if you live in your rental home for three months a year, you can only claim 25% of the credit.
You must file IRS Form 5695 as part of your tax return to claim this credit. You calculate the credit on form 5695, and then enter the result on your form 1040. If you end up with a bigger credit than you have income tax due, you cannot use the credit to get money back from the IRS. Instead, you can carry the unused credit over to the following tax year. Carryover amounts may expire after the solar credit expires.
Arizona Incentive Tax Credit
Installing a solar energy system in your Arizona home may qualify you for an Arizona Incentive Tax Credit equal to 26% of your total system cost. The maximum credit in a taxable year cannot exceed $1,000, and the cumulative solar credits allowed for the same home cannot exceed $1,000. The maximum credit a taxpayer may take for solar energy devices installed in the same home cannot exceed $1,000 in the aggregate.
A taxpayer may claim the credit of up to $1,000 for a second home, but the maximum credit claimed for primary and secondary homes in a taxable year is $1,000. A taxpayer is not eligible for the credit on rental homes. If the allowable credit exceeds the taxes otherwise due, the taxpayer may carryover the credit for a period not to exceed five years.
An Arizona Incentive Tax Credit for installing solar systems generally does not reduce the Federal Incentive Tax Credit, and vice versa. If you receive an Arizona Incentive Tax Credit, the income you report on your federal tax return will be higher, because you now have less state income tax to deduct. You must complete Arizona Forms 301 and 310 to file a claim for this credit.
Other Incentives
Other Incentives
Other incentives for the purchase of residential solar may be available from your electric utility provider and others. Your AZ Sun Services Sales Advisor can assist you in the discovery of available incentives. Please note, incentives may be taxable and/or may reduce the amount of any federal or state tax credits.
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What Our Customers Are Saying
- Travis
Polite, professional and on time. I don’t write reviews very often, but these guys exceeded expectations on ALL fronts. I spoke to 3 different solar companies and AZ Sun Services was extremely competitive on price and knocked it out of the park with the level of service... read moreI spoke to 3 different solar companies and AZ Sun Services was extremely competitive on price and knocked it out of the park with the level of service they provided. John and Charlie were available for every random question I threw at them before, during and after installation. Charlie walked me through the process of submitting my request for solar with APS to ensure it was done right the first time. His attention to detail was flawless. APS installed the meter and approved the system in less than 2 weeks. My neighbor waited 4months!! Their installation team was on point. They were very thorough in telling me how the system worked and all the little things they did to ensure a top notch install. I would recommend these guys to anyone considering solar!! Thanks AZ Sun Services!!! read less
CaesarIf you want the job done quickly and professionally these guys are the ones you want to come out doing it. Courteous, prompt, and knowledgeable. They installed my 53 solar panels and it’s wiring and took the time to make sure the work was seamless and blend... read moreCourteous, prompt, and knowledgeable. They installed my 53 solar panels and it’s wiring and took the time to make sure the work was seamless and blended in with the home like it had already been there since it’s conception. Terry took us on a tour of the solar power system so we had an understanding of how the system worked and explained the difference between our system and our neighbors. I added pictures except I could not fully show my solar panels on the roof top because I’m short and it’s a 2 story house. They made sure that the work area was clean of debris after installation. Great bunch of hard working people that love what they do. I can’t stress this enough. If you want the job done quickly and professionally these guys are the ones you want to come out doing it. read less
RudyAZ Sun Services is the best solar company we found. My husband and I talked to a few solar companies, and found those companies didn’t tell the truth and skirted our concerns, and left out information i... read moreMy husband and I talked to a few solar companies, and found those companies didn’t tell the truth and skirted our concerns, and left out information in their presentation. We never completely understood their answers to our questions, or sometimes our questions were never completely answered. How many of us fully understand the solar business. For example what type of panels are being installed, how efficient are they, will they be placed on the roof for the most efficiency, and will your current service panel supply the necessary voltage required for the system you are looking for. We found all these answers prior to signing any contract with a solar company. AZ Sun Services was up front with us and they answered all our concerns. After the completed installation any additional question we had was fully addressed. After researching, we found APS has AZ Sun Services on a short list of solar companies that use standards and guidelines which puts them above other solar companies. And yes APS is on board with residential solar being installed. My husband and I are very pleased with AZ Sun Services. We highly recommend anyone considering solar, make AZ Sun Services a company you look into. We feel we have a company we can trust. We thank John Campbell and his entire staff for a job well done. read less
- Ashlie
AZ Sun Services was so easy to work with and made our solar process stress-free. Our sales guy was knowledgeable, electrician was on time and the installers were efficient, friendly, respectful and cleaned up after themselves. This... read moreOur sales guy was knowledgeable, electrician was on time and the installers were efficient, friendly, respectful and cleaned up after themselves. This company is very professional and trustworthy. read less
SharronI would absolutely recommend working with AZ Sun Services who made the process quick and painless for me! I have spoken to a bunch of different solar companies in the past and everyone made it sound extremely confusing. I had no idea which company had the ... read moreI have spoken to a bunch of different solar companies in the past and everyone made it sound extremely confusing. I had no idea which company had the best rates, equipment, etc. I was lost! Then I met with Charles who is the owner of AZ Sun Services and he explained everything in a way I could understand. He was incredibly helpful and made sure I was getting the best deal. Charles matched me with the best company to do my financing through as well as arranged the permits, installation, and activation. I would absolutely recommend working with AZ Sun Services who made the process quick and painless for me! read less
HeidiCharles DeFelice and his team at AZ Sun Services have blown us away with their customer service, caring, and kindness. We were taken advantage of and left with an incomplete and no longer functioning system from the previous company we were working with. Charles came ... read moreWe were taken advantage of and left with an incomplete and no longer functioning system from the previous company we were working with. Charles came in and picked up the pieces for us to help get us back up and running. He and his team worked closely with the manufacturer Enphase to right our situation.
We couldn’t possibly recommend them with any higher marks! We will be life long customers of AZ Sun Services for all of our solar needs. Thanks guys! read less - Kate
There were zero issues with installation or passing inspection! Before going solar we had done a TON of research. We received quotes from many different companies in the valley for many different sized systems, and... read moreBefore going solar we had done a TON of research. We received quotes from many different companies in the valley for many different sized systems, and ultimately decided to go with AZ Sun Services. We opted for the largest system we could possibly get (14.4 kw), along with the panel upgrade and extended warranty, and no one else could beat their pricing. I had another company trying very hard to poach our business, but after showing them the pricing we were getting, the competitor agreed that we were getting a really good deal. The system took a few months to become operational, but there were zero issues with installation or passing inspection! In order to install the new service panel, which was larger than our old one, they had to cut out a decorative archway that was made out of stucco in order to make the new panel fit. They took care of all wall/stucco repair associated with it, and it looks great! Our sales rep, Nathan, has always been reachable at all hours, including giving us his personal cell number. We ended up financing the system through Dividend, and have had a pleasant experience with them as well. With that being said, if you’re in the market for a solar system, I highly suggest getting the largest system you can get and contacting AZ Sun Services for a quote. read less
MonicaNathan and his team did an amazing job from start to finish and beyond. They were available to answer all my questions and had my system up and running very quickly. I installed in October and APS already owed me a nice chunk of change. I interviewed 5 different companies and I know I made the right choice with AZ ... read moreI installed in October and APS already owed me a nice chunk of change. I interviewed 5 different companies and I know I made the right choice with AZ Sun Services. read less
RobertAZ Sun Services was able to meet all of our needs at a very affordable price. Their service is impeccable as well. My wife and I recently selected AZ Sun Services to install solar panels on our house. We also needed a new asphalt roof and an upgraded solar-ready 20... read moreMy wife and I recently selected AZ Sun Services to install solar panels on our house. We also needed a new asphalt roof and an upgraded solar-ready 200 amp main electrical panel.
We had received quotes from 3 competing solar companies and 3 roofers. AZ Sun Services was able to meet all of our needs at a very affordable price. Their service is impeccable as well. AZ Sun Services is a small family owned business that has been in solar since 2012 (prior to that they were – and still are – an electrical service contractor). Their solar installers are NABCEP certified. AZ Sun Services uses the latest technology power inverters from SolarEdge, which includes online, real-time panel monitoring.
Best of all, 100% of the work – including a new roof, new electrical main, permitting, solar installation, and final APS meter installation – was completed in 4 weeks! An added bonus is a free aerial photo of the installed system via a drone mounted camera.
After sale service has also been excellent. John, Jason, Charlie, Joe, Mark and Terry treated us very well. read less - Frank
Everything is working and installed to great satisfaction. The panels are streamline and aesthetically pleasant. The main panel installation was well placed and the tie in to my existing electric panel was smo... read moreThe panels are streamline and aesthetically pleasant. The main panel installation was well placed and the tie in to my existing electric panel was smooth and seamless. Solar energy is being produced as planned and my electric bills are significantly lower. read less