The federal government extended its solar energy system credit in the Emergency Economic Stabilization Act of 2008, which allows taxpayers who install a solar energy system to receive a credit on their federal tax return for 30% of the system’s cost. Similarly, in Arizona, homeowners can claim a 25% tax credit on up to $4,000 of solar devices installed on a residence. See A.R.S. § 43-1083. Arizona businesses can also receive a tax credit for installing a solar energy system. The tax credit is equal to 10% of the installed cost of the solar energy device, not to exceed $25,000 in credits for one building in a single tax year and $50,000 total credits per business per tax year. See A.R.S. §41-1510.01.
Being “Green” is good! But, if you live in a community governed by Covenants, Conditions, and Restrictions (CC&Rs) that prohibit installing solar panels and other solar devices, are you precluded from going “Green” to take advantage of the tax incentives? No, you are not.
Arizona has enacted two statutes which protect homeowners who wish to use solar energy in their homes. One (§33-439) voids any covenant, restriction or condition in a deed, contract, security agreement or other similar document prohibiting use of solar energy. The other (§33-1816), expands individuals’ solar rights protection by disallowing homeowner’s associations (HOAs) from prohibiting the installation and use of solar energy devices. HOAs may not restrict the placement of solar panels if the restriction impairs the functioning of the device, restricts its use, or adversely affects the cost or efficiency of the device.
So, even if you live in a community governed by CC&Rs and managed by a homeowners’ association, any restrictions in the governing documents that conflict with these statutes no longer apply to prevent your plans of going solar and taking advantage of the tax incentives to do so.
MCR wishes to thank Christina Morgan for her contributions to this article.
