Arizona solar incentives in 2026, in one line: no federal credit for a system you buy, but a 25% state tax credit (up to $1,000), sales and property tax exemptions and top-tier sun still make Arizona a strong solar state. Last updated: 16 October 2026.
Arizona Solar Incentives 2026 at a Glance
| Incentive | Status in 2026 | What it is worth |
|---|---|---|
| Federal residential credit (Section 25D) | Ended 31 Dec 2025 | $0 on a 2026 cash or loan purchase |
| Federal Section 48E (lease / PPA) | Claimed by the system owner, not you | Indirect – may show up as a lower lease or PPA rate; tightens after 2027 |
| Arizona residential solar tax credit | Active | 25% of system cost, up to $1,000 per residence; unused credit carries forward up to 5 years |
| Sales tax exemption | Active | Solar equipment is exempt from state sales tax |
| Property tax exemption | Active | The value solar adds is not assessed |
| APS / TEP export credit (RCP) | Active | Exports credited at a set rate – about 6 cents per kWh for recent APS applicants, locked for 10 years |
| SRP customer-generation plans | Active | Lower export credits and demand-based pricing – batteries help |
Looking at solar in Arizona? Here is every incentive and rebate you can stack in 2026, and the headline has changed: the 30% federal tax credit expired at the end of 2025, so Arizona’s own programs are what is left. Arizona has some of the best sun in the country plus its own state solar tax credit, making it a top solar state.
Arizona Solar Incentives in 2026
- No federal tax credit on a 2026 cash or loan purchase - Section 25D expired 31 December 2025. See solar tax credit 2026.
- Arizona state solar tax credit - 25% of the cost, up to $1,000.
- Sales tax exemption on solar equipment.
- Property tax exemption on the added home value.
- Net billing - exports are credited at a set export rate that varies by utility.
What Solar Costs in Arizona
Arizona's sun hours are among the highest in the U.S. A typical 7 kW system runs about $21,000 before incentives. There is no federal tax credit in 2026, so only Arizona programs reduce that. Use the calculator above for your estimate.
Is Solar Worth It in Arizona?
Yes for most Arizona homeowners, with the state credit and top-tier production speeding payback. See our full breakdown: Is Solar Worth It in 2026?
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Arizona Solar Incentives FAQ
What solar incentives does Arizona offer in 2026?
The state solar tax credit (25% up to $1,000), a sales tax exemption, a property tax exemption and utility export credits. There is no federal credit for a system you buy.
How much is the Arizona solar tax credit?
25% of the system cost, capped at $1,000 per residence. Unused credit can carry forward for up to 5 years.
Does Arizona have net metering?
Not in the old 1-for-1 form. APS and TEP credit exports at a Resource Comparison Proxy rate (about 6 cents per kWh for recent APS applicants, locked for 10 years and reset yearly for new customers). SRP uses customer-generation price plans. Using more of your own solar power, or adding a battery, improves the numbers.
Are there solar rebates in Arizona?
No statewide rebate. The value comes from the state tax credit, the tax exemptions and strong production. Some utilities run battery or demand-response programs.
Can I combine Arizona and federal incentives?
There is no federal credit left to stack on a 2026 cash or loan purchase - Section 25D ended 31 December 2025. Arizona incentives still stack with each other. With a lease or PPA, the system owner may claim Section 48E - see solar tax credit 2026.
Related
- Solar incentives by state
- Solar tax credit 2026: what changed
- California solar incentives
- Texas solar incentives
- Colorado solar incentives
- Net metering explained
- Solar panel cost
- Is solar worth it?
General 2026 guidance, not tax advice. Verify current Arizona program rules before purchasing.