ArizonaSolar Incentives 2026: Tax Credits, Rebates & Net Metering

Arizona offers a 25% state income tax credit on residential solar installations, capped at $1,000. The credit applies to panels, inverters, mounting hardware, and labor. It is non-refundable but can typically be carried forward to subsequent tax years if your liability in the install year is too low to absorb the full credit.

The Arizona state credit stacks with the federal 30% Residential Clean Energy Credit. On a typical $24,000 installation, that combination returns roughly $8,200 in combined credits.

Arizona requires investor-owned utilities to offer net metering on residential solar systems. The credit rate is a modified rate (typically retail rate minus a small grid utilization fee).

In practice, this means a properly sized Arizona system can drive net annual electricity costs to within tens of dollars of zero. Top utilities operating under AZ net metering rules include APS, SRP, TEP.

3 major utilities operate in Arizona: APS, SRP, TEP. Specific rebate availability varies year to year and is typically distributed first-come, first-served until annual budget caps are reached.

Before scheduling any installation, verify current rebate status directly with your utility — programs open and close throughout the year. Most Arizona installers will pull up-to-date rebate data during a site assessment.

Arizona excludes the added value of a residential solar system from property tax assessments. A homeowner whose property gains $15,000 in assessed value from a solar install pays no additional property tax on that increase, saving roughly $250 to $400 annually depending on local mill rates.

Arizona also exempts solar equipment from state sales tax, removing roughly 4% to 7% from the up-front cost of panels, inverters, and racking depending on local rate.

Compare Arizona's solar incentive package side-by-side with adjacent states to see whether you live in a relatively high- or low-incentive market.