Arizona is one of the sunniest states in the U.S., making it a perfect place for homeowners to switch to solar. Whether you’re tired of rising electricity bills or want to take advantage of Arizona’s generous incentives, going solar here can be one of the smartest financial moves you make.

In this guide, we’ll break down the main Arizona solar incentives, federal tax credits, and financing options so you can make an informed decision.

Abundant Sunshine – Arizona gets over 300 sunny days a year, making solar panels extremely efficient.

High Electricity Rates – Utility prices in Arizona have been rising steadily, meaning more savings when you generate your own power.

State & Federal Incentives – You can stack Arizona’s state rebates with the 30% federal solar tax credit.

1. Arizona Residential Solar Energy Tax Credit.

The state offers a 25% tax credit for the cost of your solar installation, up to $1,000. This is a direct credit against your state tax liability.

Type: State tax credit

Value: 25% of system cost (max $1,000)

Eligibility: Arizona homeowners installing solar systems on their primary residence.

Available to all U.S. homeowners, this federal incentive lets you deduct 30% of your solar installation cost from your federal taxes.

Type: Federal tax credit

Value: 30% of total system cost

Eligibility: Homeowners who own their solar system (purchase or financed)

When you buy solar panels and equipment in Arizona, you don’t pay sales tax, saving you around 5–10% upfront.

Type: Sales tax exemption

Value: 100% sales tax waived on eligible solar equipment

Installing solar increases your property value — but Arizona ensures your property taxes won’t go up because of it.

Type: Property tax exemption

Value: 100% of the added solar value excluded from property tax assessments

While traditional net metering is limited in Arizona, many utilities (like APS and Tucson Electric Power) offer export credits for excess energy you send back to the grid.

Type: Utility credit program

Value: Varies by utility; typically credited at a fixed export rate per kWh

With the combination of federal and state tax credits, plus no sales tax on equipment, Arizona homeowners can save thousands upfront. On average, a typical 6kW solar system in Arizona can pay for itself in 7–9 years, after which the energy is essentially free.

1. Get a Solar Quote – Find a licensed Arizona solar installer to assess your roof and energy needs.

2. Install Your System – Ensure your installer files all required paperwork for tax credits and utility programs.

3. Apply for Incentives – Claim the Arizona tax credit on your state return and the federal ITC on your federal return.

4. Enroll in Export Credit Program – Contact your utility to set up your credit account for excess solar energy.

If you live in Arizona, the combination of 300+ sunny days, generous state incentives, and the 30% federal tax credit make going solar a no-brainer. The sooner you install, the faster you start saving.

Thinking of going solar and want help quantifying your savings? Get our free eBook on "How to Slash Your Energy Bills with a Solar Generator (Even If You Rent)". Here!