Arizona Solar Incentives 2026
The complete guide to every tax credit, exemption, and utility program available to Arizona homeowners going solar in 2026 — including what changed when the federal ITC expired.
Last updated: May 2026
Arizona Residential Solar Tax Credit
Arizona's Residential Solar Energy Credit (A.R.S. §43-1083.01) is the most significant remaining incentive for Arizona homeowners going solar in 2026. The credit equals 25% of the total installed cost of your solar system, capped at $1,000 per tax year.
If your Arizona income tax liability is less than $1,000 in the year you install, you can carry the unused credit forward for up to five additional tax years — meaning you'll eventually claim the full amount as long as you owe Arizona state taxes.
How to claim it
File Arizona Form 310 with your state income tax return for the year your system was interconnected. Your installer provides the system cost documentation needed to complete the form.
Arizona Solar Property Tax Exemption
Under A.R.S. §42-11054, the added value of a solar energy system is fully excluded from your home's assessed value for property tax purposes. Solar typically adds $15,000–$25,000 to a home's market value — in Arizona, none of that increase affects your property tax bill.
This exemption is permanent — there's no expiration date, no annual renewal, and no application required. It applies automatically when your system is permitted and interconnected.
Arizona Solar Sales Tax Exemption
Arizona waives its 5.6% Transaction Privilege Tax (sales tax) on the purchase and installation of residential solar systems. The exemption covers solar panels, inverters, battery storage, racking hardware, and installation labor.
On a $25,000 system, this saves approximately $1,400 upfront. Your installer applies the exemption automatically — no action required from you. Note that some cities and counties levy their own local sales taxes that may still apply; confirm with your installer.
Arizona Utility Net Billing Rates (2026)
Arizona's major utilities have transitioned from net metering (retail-rate credits) to net billing (below-retail-rate credits). The rate you receive for excess solar exported to the grid depends on your utility — and it directly affects how you should size your system.
| Utility | Service Area | Export Credit | Lock-In | Battery Program |
|---|---|---|---|---|
| APS | Phoenix metro, Scottsdale, Glendale, Peoria, Surprise, Flagstaff | $0.0617/kWh | 10 years | Battery Pilot up to $3,750 |
| SRP | East Valley: Mesa, Chandler, Gilbert, Queen Creek, San Tan Valley | $0.0345/kWh | None | No current rebate |
| TEP | Tucson metro, Marana, Oro Valley, Sahuarita | Variable (Solar Connect) | Program-based | Energy Storage Rewards ~$720/yr |
| Mohave Electric | Kingman, Bullhead City, Lake Havasu area | Net billing credits | Varies | $0.05/watt, up to $2,500 |
Export rates are subject to annual adjustment. APS Tranche 2025 rate applies September 1, 2025 – August 31, 2026.
What Happened to the Federal 30% Tax Credit?
The federal Residential Clean Energy Credit (Section 25D) — commonly called the "30% solar tax credit" — expired for residential solar installations completed after December 31, 2025. Homeowners who finalized their installation and received interconnection approval by that date can still claim it on their 2025 federal tax return.
For installations in 2026, no federal tax credit applies to residential solar panels or residential solar-wind hybrids. Battery storage systems may still qualify for a federal credit if the battery has a capacity rating of at least 3 kWh and is charged at least 40% by the solar system — consult a tax professional for your specific situation.
The remaining Arizona state incentives — the 25% state tax credit, property tax exemption, and sales tax exemption — are not affected by the federal ITC expiration and remain fully available in 2026.
Arizona Solar Incentives — FAQ
Frequently Asked Questions
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Every Arizona city has different utility rates and installer pricing. Compare vetted local solar companies to get quotes that reflect the actual incentives and rates in your area.
Find Solar Installers Near YouArizona Solar List Editorial Team
This guide is researched and maintained by the Arizona Solar List team. We cross-reference Arizona Registrar of Contractors records, utility interconnection data, and installation pricing across 22 Arizona cities. Content is updated when programs, rates, or market conditions change.
Last reviewed: May 2026