Solar incentives in Arizona
Federal tax credits, Arizona rebates, utility programs, and Net billing / export rate riders net metering - everything that lowers your solar payback.
Incentives & rebates
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Federal Residential Clean Energy Credit (Section 25D) - ENDED
The 30% federal Residential Clean Energy Credit (IRC Section 25D) expired for property placed in service after December 31, 2025, under the One Big Beautiful Bill Act. Homeowners who purchased and installed solar by year-end 2025 can still claim it on their 2025 return. Cash and loan purchases made in 2026 receive no federal tax credit.
Federal Commercial ITC (Section 48E) - via Lease / PPA
Section 48E (the commercial Clean Electricity Investment Credit) survives at 30% and is still available to third-party owners of residential systems under solar leases, PPAs, and similar TPO structures. The TPO company claims the credit and typically passes the savings through to the homeowner. To qualify, projects must begin construction by July 4, 2026; otherwise they must be placed in service by December 31, 2027.
Arizona Residential Solar Energy Tax Credit (ARS §43-1083)
State personal income tax credit equal to 25% of the cost of a solar energy device installed on the taxpayer's residence, capped at $1,000 per taxpayer as a lifetime limit (tracked since 1995). Unused credit can be carried forward up to five years.
Solar Equipment Sales Tax Exemption
Arizona exempts the retail sale of qualifying solar energy devices from state transaction privilege (sales) tax.
Solar Property Tax Exemption
Arizona excludes the added home value of a qualifying residential solar energy system from the property's assessed value, so going solar does not raise your property tax bill.
Net metering: Net billing / export rate riders
Arizona retired full retail net metering. Major utilities now use net billing with an export (or resource-comparison-proxy) rate that credits exported solar below the retail rate and steps down over time. This raises the value of self-consumption and makes battery storage increasingly attractive.
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