Incentives are available for residential solar hot water systems installed in 2012 can cover over 70% of system costs, significantly improving the return on investment.

Federal Tax Credit

The federal solar tax credit is a 30% credit off income taxes. There is a $2,000 cap for residential systems. The credit is currently set to expire December 31, 2016. This credit can be taken in addition to the federal tax credit for solar electric systems.
www.dsireusa.org

State Tax Credit

The Arizona state income tax credit is 25% and is capped at $1,000 per residence. The unused portion of the tax credit may be carried forward for up to five years. This credit must be shared with other qualifying solar devices. There is also a sales tax waiver for solar systems, so you pay no state sales tax on your system. The expiration date for the residential state tax credit is December 31st, 2016.
www.dsireusa.org
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TEP Incentive

Tucson Electric Power offers incentives for solar hot water systems. The residential incentive is $0.50/kWh saved in year one, up to $1750 for SRCC OG-300 rated systems.  www.greenwatts.com

TEP will issue a 1099 for the utility incentive.  Customers will therefore have to count the TEP rebate as miscellaneous income on their income tax form and pay taxes on the utility rebate.

TRICO Incentive

TRICO offers incentives for solar water heating systems. The rebate is $.75/kWh based on the SRCC rating capped at 30% of the total system cost.   TRICO

State Property Tax Increase Exemption

Arizona state law dictates that your property taxes will not increase as a result of installing a solar hot water system.
AZ state property tax law, see 42-11054.C.2
www.dsireusa.org

State HOA Law

Arizona state law A.R.S. § 33-439 protects private property solar access by nullifying Home Owners Association covenants restricting solar energy systems. See DSIRE website.

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