Arizona solar rebates and tax credits calculator

Solar incentive

Federal ITC 26% (tax credit)

State tax credit: Yes ($1,000)

Net metering (by utility)

Calculate for your home's location

There can be solar tax credits and incentives available at the federal, state and local levels. The calculator above will show you the value of all incentives your home is eligible for.

Summary of Arizona solar incentives 2022

Arizona is one of the sunniest states in the country. Just because of this fact alone, you can save a lot of money here with solar. Arizona’s renewable portfolio standards require utilities to generate a portion of their renewable output from distributed energy technologies -- 30% to be exact. Half of this requirement must be derived from residential installations.

Luckily for you, this requirement can be fulfilled by residential solar systems, but it is not limited to just solar panels. These conditions have created the right environment for utility companies in Arizona to offer residential solar incentives.

In addition to reading on to see what incentives you qualify for, use our calculator above to see how much you can save with solar.

On this page, you can:

  1. Learn what solar incentives are available to Arizona homeowners

  2. See what Arizona solar incentives you qualify for based on your utility company and city

  3. Find out how much these incentives and/or Arizona solar tax credits will reduce your cost to go solar and add batteries

Federal solar investment tax credit

The federal solar investment tax credit will have the biggest impact on the cost you will face to go solar in Arizona

This perk is commonly known as the ITC, short for “Investment Tax Credit”. If you install your photovoltaic system in 2020, the federal tax credit is 26% of the cost of your solar panel system. This is 26% off the entire cost of the system including equipment, labor and permitting.

Example: If your solar energy system costs $20,000, your federal solar tax credit would be $20,000 x 26% = $5,200.

The federal tax credit falls to 22% at the end of 2022.

Net energy metering in Arizona

With net metering in some states, you get full retail rate credit for the amount of electricity you send back into the grid with your solar panels.

Net metering policy lets you store the extra solar energy you produce and aren’t able to use at home with the utility. They then credit your bill at night when the sun ain’t shining. So, no batteries needed.

While Arizona’s net metering policy is not as strong as other states, you can still save quite a bit of money even with the extra fees on solar owners and reduced payments for your electricity that APS has successfully lobbied for.

There are a whole host of confusing solar rate plans offered by the three major utility companies here, which sound like they are an exceptional deal for solar owners. However, the average net metering rates for APS, SRP, and TEP are about $0.03/kWh, significantly less than your retail rates, but at least it’s something.

If anything, this low net metering rate encourages solar owners to store more energy onsite with home battery systems.

Arizona solar rebates

With its strong renewable portfolio standard, Arizona once had a great variety of solar panel rebate programs offered by nearly all the state's electric utilities. However, many of those generous solar panel rebate programs have been exhausted because utilities are getting close to meeting their requirements for off-site solar electricity production.

The good news is some rebates still exist for certain homeowners. The bad news is that they only exist for customers of a handful of rural electric co-ops. If you're a customer of any of the co-ops listed below, you're in luck.

Home energy storage rebate

SRP offers a battery storage incentive program that offers direct rebates to homeowners who install solar batteries. The current incentive offers $300 per kWh of storage, up to $3,600 maximum. At $300/kWh, this accounts for about half of the cost of the battery itself (not including installation).

At that price, home batteries begin to make a lot more sense, especially given their ability to eliminate your daily peak usage and reduce demand charges associated with net metering rates.

Arizona solar tax credit

Every resident in Arizona who installs solar panels gets a State Tax Credit of 25% of the total system cost, up to $1,000, to be used toward State income taxes.

That is a nice bonus to add to the 26% Federal Solar Tax Credit. There's no cap on the federal tax credit and it can be claimed over multiple years if necessary.

Solar sales and property tax exemptions in Arizona

Your solar installation will increase your property value by an average multiple of twenty times your annual electricity savings. In Arizona, that can amount to an average amount north of $30,000. Luckily, that home value increase is exempt from property tax assessments.

Moreover, solar equipment is also exempt from sales taxes, so you save more upfront here by avoiding that.

Cost of solar panels in your part of Arizona after all applicable solar incentives

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Prices based on a 8.3kW system, after 26% federal tax credit

Solar prices near you

Cost range of local prices


Payback period

7.3-8.9 years

Net profit (savings less system cost)


Average size system installed in AZ in 2022


Solar panel cost calculator

Best 10 solar companies in Arizona

110 solar companies in Arizona provide pricing on SolarReviews. Here are the best rated companies near you.

Solar guides for your Arizona city

For more information about going solar near where you live, check out the following resources:

Find local city information


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