Chandler, AZ

Arizona’s Credit for Solar Energy Devices is a state tax credit that helps homeowners save money when they install solar panels on their Arizona residence. This nonrefundable tax credit reduces the amount of state income tax you owe, dollar-for-dollar, making solar energy more affordable for Arizona families.

To qualify for this credit, you must be an individual taxpayer who installs a solar energy device at your primary or secondary residence located in Arizona. The credit is nonrefundable, which means it can reduce your Arizona state tax liability to zero, but any unused credit amount cannot be refunded to you as cash. You’ll need to file Form 310 with your Arizona state tax return to claim this benefit.

While the official source doesn’t specify the exact credit amount or percentage, this incentive has been available for many years and continues to be offered for recent tax years through 2024. The credit applies to solar energy devices installed at your Arizona home, helping offset the upfront costs of going solar while supporting the state’s clean energy goals.

Arizona’s Property Tax Exemption for renewable energy equipment allows homeowners to exclude the added value of their solar panel system from their property tax assessment. This means that while your solar installation may increase your home’s overall value, you won’t pay additional property taxes on that increased value. The exemption applies to the full value of qualifying renewable energy equipment, including solar panels, inverters, and related components.

To qualify for this exemption, your renewable energy system must be installed on residential property in Arizona and meet state requirements for renewable energy equipment. Property owners must file the appropriate forms with the Arizona Department of Revenue to claim this exemption. The exemption continues for as long as you own the qualifying renewable energy equipment, providing ongoing tax savings throughout the life of your solar system. This incentive helps make solar more affordable by ensuring homeowners don’t face higher property tax bills simply for investing in clean energy technology.

Arizona’s Solar and Wind Sales Tax Exemption removes state sales tax from the purchase and installation of solar and wind energy systems for your home. This means you won’t pay the standard Arizona sales tax rate on both the equipment itself and the contractor’s installation services, providing immediate savings at the time of purchase.

The financial benefit varies based on your system’s total cost, as you’ll save Arizona’s state sales tax percentage on the entire project. This exemption applies to all qualifying solar panels, wind turbines, inverters, batteries, and related equipment, as well as professional installation costs. The program is available statewide with no income restrictions or application deadlines, making it accessible to all Arizona homeowners who choose to install qualifying renewable energy systems. Since this is a sales tax exemption rather than a rebate, the savings are automatic when you purchase from participating contractors who properly apply the exemption at the point of sale.

Arizona’s Net Billing program allows homeowners with solar panels to receive credits for excess electricity they send back to the power grid. Unlike traditional net metering where you get full retail credit, net billing pays you a lower export rate for the solar energy you don’t use in your home. The credit rate varies by utility company, ranging from about 3.5 cents to 6.9 cents per kilowatt-hour depending on your electric provider.

The financial benefits depend on which Arizona utility serves your home. For example, Arizona Public Service (APS) customers receive 6.9 cents per kWh for exported solar energy and are locked into that rate for 10 years. Salt River Project customers get between 2-6 cents per kWh depending on the season and time of day. Most utilities require solar customers to switch to time-of-use rate plans, and some charge additional monthly fees ranging from $2.23 to higher grid access charges.

To participate, you must install solar panels and interconnect with your utility company. Most utilities lock you into your export credit rate for 10 years from when you connect your system. However, the export rates for new customers can change annually, so timing your installation matters. At the end of each year, most utilities will either pay out excess credits above a certain threshold (typically $10-25) or reset your account to zero, though some allow credits to roll over indefinitely.