Solar Incentives in Arizona (2026)
The 30% federal Residential Clean Energy Credit expired on December 31, 2025, so homeowners who buy a system in Arizona in 2026 no longer receive a federal tax credit. That makes Arizona's state and utility incentives — and its net-metering rules — the main levers for lowering cost and shortening payback today.
Federal tax credit (ended for 2026 purchases)
The 30% federal credit (Section 25D) was repealed by the 2025 budget law and is no longer available for systems placed in service after December 31, 2025. If your system was installed and operating by the end of 2025, you can still claim the 30% credit on your 2025 return. The one remaining federal route in 2026 is a third-party-owned system: with a solar lease or PPA, the company that owns the panels can claim the separate business clean-energy credit (Section 48E, available through 2027) and may pass part of those savings to you through lower payments — though you won't own the system. Consult a tax professional for your situation.
Arizona state & utility incentives
| Incentive | What it offers |
|---|---|
| State solar tax credit | 25% of system cost, up to $1,000, against Arizona income tax. |
| Sales tax exemption | Solar equipment is exempt from state sales tax. |
| Property tax exemption | The added value from solar is exempt from property tax. |
Net metering in Arizona
Net billing — exports credited at an avoided-cost rate set by your utility (typically below retail), so self-consumption and batteries add value.
See solar panel costs near you
Compare local solar prices by city, then stack these Arizona incentives on top.
Solar panel cost by city →Frequently asked questions
- What solar incentives are available in Arizona?
- The 30% federal Residential Clean Energy Credit expired December 31, 2025, so homeowners who buy in 2026 no longer receive it. Arizona still offers State solar tax credit, Sales tax exemption, Property tax exemption, plus net metering. A lease or PPA can still capture a federal benefit through the installer.
- Is there still a federal solar tax credit in 2026?
- Not for homeowners who buy a system — Section 25D expired at the end of 2025 under the 2025 budget law. The only remaining federal route is a third-party-owned system (lease or PPA), where the installer claims the business clean-energy credit (Section 48E, available through 2027) and may pass part of the savings to you.
- Does Arizona have net metering?
- Net billing — exports credited at an avoided-cost rate set by your utility (typically below retail), so self-consumption and batteries add value.
Incentive programs change often — verify current details on DSIRE and with your utility before deciding.