Glendale, AZ Solar Panels

The Arizona 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 provided source materials don’t specify the exact dollar amount or percentage of the credit available. To understand the specific financial benefit and eligibility requirements, you’ll need to review Form 310 and its instructions, which are available through the Arizona Department of Revenue. The credit applies to solar energy devices installed at your primary or secondary residence located in Arizona, and you must be the individual who installed the system to claim it.

Arizona’s Property Tax Exemption for renewable energy equipment protects homeowners from paying additional property taxes when they install solar panels or other renewable energy systems. When you add solar to your home, the increased value it brings to your property is exempt from property tax assessment. This means your property taxes stay the same as they were before installation, even though your home is now worth more.

This exemption applies to solar photovoltaic systems, solar thermal systems, and other qualifying renewable energy equipment installed on residential properties. The exemption continues for as long as you own the equipment, providing ongoing savings throughout your system’s lifetime. To benefit from this exemption, your renewable energy equipment must be properly reported using the Arizona Department of Revenue’s Renewable Energy Equipment Property Tax Form. This state-level benefit works independently of other incentives and helps make solar more affordable by ensuring you won’t face higher annual property tax bills after going solar.

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 the standard Arizona sales tax (currently 5.6% at the state level) on the cost of solar panels, inverters, mounting equipment, wind turbines, or the contractor’s labor to install these systems. For a typical residential solar installation costing $20,000, this exemption could save you approximately $1,120 in state sales tax.

This exemption is available to all Arizona homeowners who purchase qualifying solar or wind energy devices and applies automatically at the point of sale—you don’t need to file any additional paperwork or applications. The exemption has no expiration date and remains in effect under current Arizona law. Keep in mind that while the state sales tax is exempted, local city or county sales taxes may still apply depending on where you live, so your total savings may vary by location.

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 electricity rate, net billing programs credit exports at a lower, predetermined rate set by your utility company. This means you’ll save the most money by using your solar energy as it’s generated rather than sending it to the grid.

The financial benefit varies significantly depending on your utility provider. Arizona Public Service (APS) customers receive $0.06857 per kilowatt-hour (kWh) for exports with a 10-year rate lock, though there’s also a Grid Access Charge of $0.242 per kW DC monthly. Salt River Project (SRP) customers earn between $0.02-$0.06/kWh depending on season and time-of-use rate plan selected. Tucson Electric Power (TEP) credits exports at $0.0633/kWh with a 10-year lock, while UNS Electric customers receive $0.0755/kWh (also locked for 10 years) but pay a $2.23 monthly distributed generation fee. Cooperative customers with Mohave Electric receive $0.0353/kWh (subject to annual changes), and Trico Electric customers get $0.0368/kWh with a 10-year rate lock.

Most Arizona utilities require solar customers to switch to a time-of-use (TOU) rate plan, which means your electricity costs vary based on the time of day you use power. Export credit rates for new solar customers can change annually at most utilities, so the rate you receive depends on when you interconnect your system. Most utilities conduct an annual true-up, typically in September or December, where excess credits above a certain threshold (usually $10-$25) are paid out and your account resets to zero. It’s important to understand your specific utility’s program details, as rate structures, fees, and credit rollover policies differ across Arizona’s service territories.