What is the best way to finance solar in Arizona?

For most Arizona homeowners, a solar loan is the best option. You own the system (qualifying you for Arizona's 25% state tax credit up to $1,000), your monthly payment is typically less than your current electric bill, and you build equity. Cash is better if you have it — roughly 10–15% cheaper over 25 years.

What solar loan terms are available in Arizona?

Most solar lenders offer 10, 15, 20, and 25-year terms at rates ranging from 3.99% to 9.99% APR, depending on your credit score. Watch out for loans with a 'dealer fee' (often 20–30% of the loan amount) baked into the price.

Does a solar lease qualify for Arizona's tax credit?

No. With a solar lease or PPA, the installation company owns the system and claims any available tax credits. You receive none of Arizona's 25% state tax credit (up to $1,000).

What is a solar PPA and how does it differ from a lease?

A PPA charges you a per-kWh rate for electricity your panels produce. A lease charges a flat monthly fee. Both are third-party ownership arrangements where you don't own the panels.

How does solar financing affect selling my home?

Owned systems (cash or paid-off loan) add to home value and transfer smoothly. Solar leases and PPAs must be transferred to the buyer, which some buyers refuse — the most common complaint from homeowners with leased systems.

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Cost GuideUpdated June 2026

Arizona Solar Financing 2026: Loans, Leases, and PPAs Compared

Most Arizona homeowners don't pay cash for solar — they finance it. Here's what each option actually costs, which ones qualify for the state tax credit, and the hidden fees to watch out for before you sign.

$25K

Avg System Cost

before incentives

$1,000

AZ State Tax Credit

25% up to $1K cap

5–8%

Typical Loan Rate

APR for 720+ credit

10–15%

Loan vs Cash Diff

more expensive financed

The 4 Ways to Pay for Solar in Arizona

Each financing type has a different ownership structure — and ownership determines whether you qualify for Arizona's tax credit.

payments

Cash Purchase

Best long-term ROI

You

Ownership

Yes

AZ Tax Credit

6–8 years

Payback

+Lowest total cost — no interest paid

+Qualifies for AZ 25% state tax credit

+Full ownership from day one

+No monthly payment obligation

−Requires $20K–$35K upfront capital

−Ties up liquid assets

−No leverage on tax credit timing

account_balance

Solar Loan

Best for most homeowners

You

Ownership

Yes

AZ Tax Credit

7–10 years

Payback

+Own the system — qualifies for AZ tax credit

+Monthly payment often less than current bill

+No upfront cost

+$0-down options widely available

−Interest increases total cost vs cash

−Dealer fees can be 20–30% — ask for net price

−Credit score affects rate

handshake

Solar Lease

Low barrier to entry

Installer

Ownership

AZ Tax Credit

N/A (no ownership)

Payback

+$0 upfront in most cases

+Fixed monthly payment

+Maintenance typically included

+Easy to get approved

−No ownership — no AZ tax credit

−Annual payment escalators common

−Can complicate home sale

−No equity buildup

bolt

PPA

Pay per kWh produced

Installer

Ownership

AZ Tax Credit

N/A (no ownership)

Payback

+$0 upfront

+You pay for electricity produced, not a fixed fee

+Installer handles maintenance

−Annual escalator clause raises cost over time

−No tax credit or ownership

−Less common in Arizona

−Can complicate home sale

4 Things to Watch Out for in a Solar Loan

Solar loans from installers are convenient but not always the cheapest option. These are the most common ways homeowners overpay.

warning

Ask for the dealer fee

Installer-offered loans often include a 20–30% dealer fee rolled into the loan principal. On a $25,000 system, that adds $5,000–$7,500 in hidden cost. Ask: 'What is the dealer fee on this loan product?' Compare the cash price vs financed price.

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Watch for rate-change loans

Some loans start at a low 'promotional' rate that increases after 12–18 months if you haven't used your tax credit to pay down principal. This is a trap — the payment jumps significantly. Confirm whether your rate is fixed for the full term.

calculate

Get the APR, not just the monthly payment

A 25-year loan at $119/month sounds appealing, but at 8.99% APR on a $25,000 loan you'll pay ~$35,700 total — $10,700 in interest. Always compare total repayment cost, not just the monthly number.

verified

Credit unions often beat installers

Arizona Federal Credit Union, Desert Financial, and OneAZ Credit Union offer personal loans or home equity products that are often cheaper than installer-arranged financing. If your credit is strong (720+), get a quote from your bank before accepting the installer's loan.

info

Federal ITC Expired December 31, 2025

The 30% federal solar tax credit (ITC) expired at end of 2025. Arizona's 25% state tax credit (capped at $1,000) is still available for owned systems in 2026. Some installers may still advertise the 30% federal credit — that rate no longer applies. Verify any tax credit claims with your tax advisor before signing.

Which Financing Option Is Right for You?

If: You have cash available

arrow_forwardPay cash

Lowest total cost, fastest payback, simplest outcome.

If: You want to own but not pay upfront

arrow_forwardSolar loan

Qualifies for AZ tax credit, builds equity, $0-down available.

If: Your credit score is below 640

arrow_forwardLease or PPA

Easier to qualify; you give up ownership but get immediate savings.

If: You plan to sell in 2–3 years

arrow_forwardLoan or cash

Owned systems transfer cleanly; leases complicate home sales.

If: You want zero maintenance responsibility

arrow_forwardLease with maintenance included

Installer handles all upkeep under a lease agreement.

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Ready to Compare Quotes?

Browse vetted Arizona solar installers and ask each one for their cash price and financed price — the difference tells you the true cost of their loan product.

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