Arizona Solar Tax Credits & Incentives
2026 Guide
Arizona is one of the few states with a direct state solar tax credit — plus property and sales tax exemptions and utility rebates.
Federal Solar Tax Credit Update — 2026
The 30% federal ITC expired for homeowner-owned systems on December 31, 2025.
If you installed solar by Dec 31, 2025, claim the 30% credit on your 2025 tax return. Arizona also offers its own 25% state tax credit up to $1,000 — one of few states with a direct solar credit.
Arizona Solar Tax Credits & Incentives
Every credit, exemption, and rebate available in AZ
Federal ITC Carryforward
30% of system cost
If you installed solar before 2026, claim the full 30% Residential Clean Energy Credit on your 2025 return.
Eligibility
- Installed solar/battery by December 31, 2025
- File 2025 tax return by April 15, 2026
- Nonrefundable — excess carries forward
Arizona State Solar Tax Credit
25% up to $1,000
Arizona offers a direct 25% state tax credit on solar system costs, capped at $1,000. This is one of the few true state solar tax credits in the country.
Eligibility
- Arizona resident homeowner
- Solar energy system installation
- Claimed on Arizona state income tax return
Property Tax Exemption
100% exemption
Solar additions are fully excluded from property tax assessments, protecting you from higher tax bills.
Eligibility
- Any Arizona homeowner with solar
- Residential property
- Automatic
Sales Tax Exemption
~$1,120 saved
Saves approximately 5.6% on system costs. On a $20,000 system, that's about $1,120 in immediate savings.
Eligibility
- Any solar system purchase
- Saves approximately 5.6% on system costs
- Automatic at purchase
Utility Rebate Programs
Varies by utility
SRP, APS, and TEP offer various rebate programs for solar customers. Arizona's solar access laws also protect homeowners from HOA solar restrictions.
Eligibility
- SRP, APS, or TEP customer
- Residential solar installation
- Check utility for current availability
Key Deadlines for Arizona Solar Owners
Don't miss these time-sensitive opportunities
April 15, 2026CRITICAL
Last day to file 2025 taxes and claim the 30% federal ITC
July 4, 2026
Deadline for third-party providers to begin construction for Section 48E credits
Net Metering in Arizona
Statewide net metering or comparable compensation available. APS transitioned to lower rates for new customers. Existing customers generally grandfathered under their original terms.
Frequently Asked Questions
Common questions about solar tax credits in Arizona
Does Arizona have a state solar tax credit in 2026?
Yes! Arizona offers a 25% state tax credit on solar system costs, capped at $1,000. This is one of the few direct state solar tax credits available in the country. You claim it on your Arizona state income tax return.
Can I still claim the federal solar tax credit in Arizona in 2026?
Only if you installed your system by December 31, 2025. You can claim the 30% federal ITC on your 2025 tax return (due April 15, 2026). New 2026 installations can only access federal credits through lease/PPA arrangements.
How much total can I save on solar taxes in Arizona?
Arizona offers a triple tax benefit: the $1,000 state tax credit, 100% property tax exemption, and ~5.6% sales tax exemption. Combined with the federal ITC carryforward (for pre-2026 installations), total tax savings can exceed $6,000.
What utility solar rebates are available in Arizona?
SRP, APS, and TEP each offer various rebate programs for residential solar. Programs and amounts change periodically — contact your utility directly for current offerings. Arizona's solar access laws also prevent HOAs from restricting solar panel installation.
How does net metering work in Arizona?
Arizona has statewide net metering or comparable compensation structures. APS has transitioned to a 'Resource Comparison Proxy' rate for new solar customers. Existing net metering customers are generally grandfathered under their original terms.
Solar Tax Credits in Arizona Cities
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