Solar incentives and financing in Arizona
- Factsheet
What type of solar incentives are available?
There are several types of financial incentives available that can help you go solar. This section primarily covers the solar incentives available in Arizona, but you can learn more about national solar incentives here.
State tax credit
Arizona offers an individual tax credit of 25% of the cost of the installation of a solar energy system, capped at $1,000. The credit can be claimed when filing state taxes for the year when the installation occurred. If your state 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.
Federal tax credit
Homeowners who pay federal income tax are eligible for the federal Investment Tax Credit worth 30% of the cost of installing solar if the installation occurs between 2022 and 2032. (The credit decreases in 2033 before being phased out by 2035). This is a one-time nonrefundable credit that you receive when you file your federal taxes for the year you had your solar installed. For those with a federal tax liability less than the amount of the credit, the credit can be rolled over for as long as the credit is in effect (through 2034) to reduce future tax liability. Learn more about the federal tax credit and other national incentives here.
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.
Local government incentives
The City of Mesa offers net metering for customers of the city’s municipal electric utility.
The City of Tempe offers a residential rebate program to refund permitting and some related fees.
Solar Financing
These banks offer solar-specific loans to finance solar installations in Arizona.
- Marisol Federal Credit Union: Smart E Solar Loans
- Credit Union West: Solar Panel Financing
- Tucson Old Pueblo Credit Union: Go Solar
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