Resources > Solar incentives and financing in Arizona

Solar incentives and financing in Arizona

• Factsheet

April 25, 2024

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

In July 2025, Congress voted to repeal tax credits for solar. Click here to contact your members of Congress and share your support for solar energy.

The residential solar tax credit expires at the end of 2025. If buying a system outright or through loan financing, homeowners will no longer be able to qualify for the credit. However, third party ownership models (solar leases and power purchase agreements) qualify under the commercial tax credit. This is still in effect through 2029. In these cases, the system owner would be eligible for the federal tax credit as long as certain requirements are met. Your solar installer will be able to let you know if your system qualifies.Nonprofits and small businesses use the commercial tax credit. Systems using this tax credit must be installed by the end of 2029 and follow certain rules about Foreign Entities of Concern requirements and when to start construction. IRS Elective Pay for nonprofits is still active. Your solar installer will be able to let you know if your system meets these requirements. Most of these requirements come into effect in 2026.

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
• Sustainable Home Improvement Loans of Arizona (SHILA)
• Groundswell Capital