Panels for Arizona Part II

Arizona residents are fortunate when it comes to solar incentives. Besides the 30% of the system cost being covered by the 30% tax credit, Arizona has a net metering law so excess power exported to the grid is given a credit that is 1 for 1 with retail power rates on your electric bill. They also have a state tax credit of $1,000. Most states don't have any state level tax credit. Arizona has the highest level of solar irradiation in the country. Solar generates around 180% more than New York. With incentives and sun coverage this is a great opportunity for homeowners.

Rate plans and rate changes

How an electric company charges customers makes a difference in how much they can save with solar. Companies should help homeowners choose the appropriate plan from their utility based on how much power the solar panels will provide and use. For instance, SunHarvest Solar supports the use of a load controller for homes. It  prevents the air conditioning, and other devices to limit demand fees for customers. If a utility add new fees for solar customers, it affects the savings. It is true that rates and policies for solar customers are changing. For example, the credit that Arizona Public Service gives customers for their surplus solar energy will be recalculated and likely reduced based on market prices in the future (also see related tax credit information below).

This is a state program where homeowners can deduct 25 percent of the cost of their solar system. The official policy is the credit is allowed against the taxpayer's personal income tax in the amount of 25 percent of the cost of a solar or wind energy device, with a $1,000 maximum allowable limit, regardless of the number of energy devices installed. The credit is claimed in the year of installation. Even though it has a $1,000 limit, it is still a good program that helps homeowners in the state. 
 

Arizona does participate in net-metering, but the program is different than in other states. It is now state law the utilities buy back the power at an avoided cost rate, which means although the power company charges all its customers a retail rate, they buy back the extra power you generate at the wholesale cost they buy from other utilities and power generators. The only limit to the program is the customer cannot generate more than 125 percent of their usage. It is important to check with your local utility to see their individual programs. 

Saving potential

After 20 years, a homeowner who installed solar panels on their home could save approximately $35,447 in electricity costs. After you factor in both the state and federal tax credits, the payback is about four times what the panels cost.  Of course, all these prices and savings amounts can change slightly when different brands of solar panels and inverters are used, but the general point is solar power is affordable. 

Those panels also increase the value of the home, they pay for themselves in a little more than six years, the whole solar panel system can save a homeowner more than $35,000 in power costs, and the homeowners can use the air conditioning as much as they want. For more on this, click here.

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