If you’ve expressed interest in solar on the internet, odds are you’re currently bombarded with ads encouraging you to go solar. While some of the information presented is accurate, many ads present hyperbolic claims designed to make you leap before you look. Read on to learn what’s true, what’s distorted, and how you can plan to install solar on a schedule most beneficial to you and your family or business.

Federal Tax Credits

Solar electric systems currently qualify for a 30% tax credit on the total purchase price. This means you’ll receive a credit on any taxes owed. If you don’t owe enough in one year, you can carry this credit forward to another year.

So what’s the urgency? While residential solar electric systems placed in service in 2019 receive the full 30% tax credit in 2019, the credit is being phased out over the next two and a half years.

For home systems, the tax credit is as follows:

⚫ 30% for systems placed in service in 2019

⚫ 26% for systems placed in service in 2020

⚫ 22% for systems placed in service in 2021

⚫ 0% for systems placed in service in 2022 and beyond

For businesses, the tax credit is similar, except a 10% credit remains in 2022 and beyond.

Detailed information on federal residential and business credits can be found on the DSIRE website.

So if you plan to go solar within the next 4-5 years, you’ll receive the most benefit if you have solar installed in 2019, or if you need more time to plan, in 2020.

Arizona Tax Credit

Although it’s always hard to tell what the Arizona legislature might do, there are no planned changes to the Arizona tax credits for renewable energy systems.

For residences, the credit is 25% of system cost, up to a maximum of $1,000 per home.

For businesses, the credit is only 10% of system cost, but it has a higher cap of $25,000.

Detailed information on Arizona residential and business credits can be found on the DSIRE website.

Utility Rates for Solar

In Arizona, solar electric systems connected to a utility grid now use export rates. This means that you’ll be paid only 50-90% of retail rates when you send electricity back to the grid, depending on your specific electric utility.

For a detailed discussion of export rates, and how to estimate savings, see our article Is Your Arizona Solar Installer Telling You the Whole Story?

When you install solar, that export rate is locked in for ten years. But once each year, the export rate for new solar customers will drop up to 10%. The deadline varies by utility, but the sooner you install solar, the sooner you lock in a higher export rate.

To lock in an export rate, your solar installer will need to complete an interconnection application that must be signed by you. Before we can begin that application process, you’ll need a site visit with one of your estimators, we’ll need to provide you a proposal and contract, and you’ll need to sign a contract and provide a deposit. This process can take 1-4 weeks, depending on how busy we are.

Fortunately, the system will not need to be installed by the deadline to qualify for the current export rate, but it must be completely installed by 180 days from the time the utility accepts your completed interconnection application.

At the time of this post, the deadlines for southern Arizona utilities are as follows:

Given this information, the advice in the last section holds—the best option is to have solar installed this year, while the second best option would be to get a utility interconnection application completed and approved this year before the applicable application deadline, and have your solar electric system installed early next year, within the 180-day installation deadline.

Installation Prices

Over the past decade, prices for solar installation have consistently fallen. This is from a combination of lower prices for equipment, more efficient equipment, and improved installation efficiency.

Although we’re still working aggressively to improve our installation processes, and keep our overhead costs low (those of you who have visited our warehouse/office know we’re serious!), we can’t control our major equipment costs.

Over the past eighteen months, the Trump tariffs have had a significant impact on the prices of the solar modules, microinverters, racking, and other components. Although we’ve been able to avoid significant increases in our installation prices by working to be more lean at each stage of our processes, our prices have not consistently decreased, as they have in the past.

This is a trend across the residential solar industry. Energy Sage’s article How the 2018 U.S. Solar Tariff Will Impact the Price You Pay does a great job laying out the details. It seems unlikely that these tariffs and price trends will significantly change over the next eighteen months.

A Good Time to Go Solar

Often, clients ask us what we’d recommend, if we were in their shoes. In this case, based on the federal and Arizona tax credits, utility rates, and installation price trends, we believe that the best time to go solar is now. Installing solar in 2020 can also be a reasonable option.

In fact, over the past couple years, several of us at Net Zero Solar have either upgraded our solar electric systems on our homes, or installed solar on recently purchased homes.

We’d encourage you to read more about the process of going solar, learn about accurate solar savings estimates, and then, get in touch!

Questions or comments? Please share them below!