Chandler, AZ Solar Panels

Arizona’s Credit for Solar Energy Devices is a state tax credit that rewards homeowners who install solar panels at their Arizona residence. This is a nonrefundable credit, which means it can reduce your state tax liability to zero, but you won’t receive any excess credit as a refund.

Unfortunately, the information provided doesn’t specify the exact dollar amount or percentage of the credit available. To understand the specific financial benefit you may qualify for, you’ll need to review Form 310 and its instructions on the Arizona Department of Revenue website, or consult with a tax professional. The credit is available to individual taxpayers who install qualifying solar energy devices at their primary or secondary residence located in Arizona. Keep in mind that as a nonrefundable credit, you can only benefit from this incentive if you have Arizona state tax liability to offset.

Arizona’s Property Tax Exemption for renewable energy equipment ensures that installing solar panels or other renewable energy systems won’t increase your property taxes. When you add solar equipment to your home, Arizona law prevents county assessors from including the added value of that equipment when calculating your property’s assessed value for tax purposes. This means you can enjoy the benefits of clean energy and increased home value without paying higher property taxes on your solar investment.

All residential solar installations in Arizona are eligible for this exemption, and it applies to the equipment itself including solar panels, inverters, batteries, and related hardware. The exemption continues for as long as you own the renewable energy equipment. You’ll need to report your renewable energy equipment using the state’s Property Tax Form (Form 82054REE) to ensure the exemption is properly applied. This is a permanent benefit with no expiration date, making solar energy more affordable for Arizona homeowners over the long term.

Arizona’s Solar and Wind Sales Tax Exemption removes the state sales tax from the purchase and installation of solar and wind energy equipment for your home. This means you won’t pay Arizona’s sales tax when you buy solar panels, wind turbines, or related equipment, and you also won’t pay sales tax on the contractor’s labor to install these systems. This exemption applies at the point of sale, providing immediate savings on your clean energy investment.

The financial benefit depends on the total cost of your system and your local sales tax rate. Arizona’s state sales tax rate is 5.6%, though your total rate may be higher when including county and city taxes. For example, on a $20,000 solar installation, you could save $1,120 in state sales tax alone, with additional savings possible depending on local tax rates. There are no income requirements or other eligibility restrictions—any Arizona homeowner purchasing qualifying solar or wind equipment can benefit from this exemption. The exemption has no expiration date and applies to both the equipment and installation services, making it a reliable way to reduce the upfront cost of going solar.

Net Billing in Arizona is a compensation structure where solar homeowners receive credits for the excess electricity their solar panels send to the grid. Unlike traditional net metering where exports are valued at the full retail rate, net billing credits exports at a lower, fixed rate set by your utility company. This means you’ll save the most by using your solar energy as it’s generated rather than sending it back to the grid.

The financial benefit varies significantly by utility provider. Arizona Public Service (APS) credits exports at $0.06857/kWh and requires customers to switch to a time-of-use rate, plus pay a Grid Access Charge of $0.242/kW DC per month. Salt River Project (SRP) offers credits between $0.02-$0.06/kWh depending on season and rate plan chosen. Tucson Electric Power (TEP) provides $0.0633/kWh, while UNS Electric credits at $0.0755/kWh with a $2.23/month distributed generation fee. Cooperative utilities like Mohave Electric, Trico Electric, and others offer rates ranging from $0.0353 to $0.0755/kWh. Most utilities lock customers into their export rate for 10 years upon interconnection, providing rate stability.

All solar customers in Arizona must move to a time-of-use rate plan when installing solar. At the end of each year (typically after your September or December bill, depending on your utility), any excess credits over $10-$25 are paid out and your account resets to zero. If credits don’t exceed this threshold, you’ll need to request a check or they’ll roll over to the next year. It’s important to understand that these export rates are significantly lower than what you pay for electricity from the grid, so maximizing self-consumption of your solar energy—by using power during the day or adding battery storage—will provide the greatest financial benefit.