Solar Incentives and Financing in Arizona

Solar Incentives

What type of solar incentives are available?

Several types of incentives can help you go solar. This section covers the solar incentives available in the Arizona, but you can learn more about the national context of solar incentives on our national solar incentives page.

State tax credits

Arizona offers an individual tax credit of 25% of the cost of the installation of a solar energy system, worth up to $1,000. The credit can be claimed the year of the installation of your solar system. If your tax liability is under the amount of the credit, you can roll over the credit into subsequent tax years, up to five years from your installation. The credit is not available to taxpayers who lease solar systems or enter into power purchase agreements with third parties.

State property tax exemption

Installing solar adds value to your property. However, Arizona law exempts solar installations from increasing your property tax liability. Contact your county assessor for how and when to submit the proper paperwork to qualify for the exemption.

State sales tax exemption

Arizona offers a state sales tax exemption to registered sellers of solar and related equipment. City sales tax may still apply.

Utility programs

Arizona Public Service

Arizona Public Service (APS) has a solar communities program that installs solar for free on qualified homes of limited to moderate income. The program provides a $30 monthly credit on your electric bill for 20 years. APS will own the solar panels and all of the power generated. While this may help some customers with the upfront cost of solar, studies show utility-owned rooftop solar programs disproportionately benefit utilities when compared to self-ownership of solar by customers.

Salt River Project

SRP has a $250 rebate for systems, like smart thermostats, known as demand management systems. These can help you lower your energy use during times of high energy usage and in doing so, avoid expensive demand charges. The utility also offers incentives for installing solar hot water systems.

Tucson Electric Power

Tucson Electric Power does not currently offer any incentives for rooftop solar, but it does offer rebates for a variety of energy efficiency measures.

Local government incentives

The City of Mesa offers solar incentives worth up to $1,000 for residential customers of the city’s municipal electric utility. Incentives for commercial solar projects are worth up to $10,000.

The City of Tempe offers a residential rebate program to refund permitting and some related fees.

Solar Financing

Banks offering solar financing in Arizona

Marisol Federal Credit Union: https://www.marisolcu.org/loans/smart-e-solar-loans

Tucson Old Pueblo Credit Union: https://www.topcu.org/go-solar/

Credit Union West: https://www.cuwest.org/borrowing/home-improvement-loans/solar-financing