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Steve is the Owner of Phoenix Solar Panel Systems and a Phoenix, AZ native. He practiced as a trial attorney in Arizona for seven (7) years and has been helping customers in the solar industry for five (5) years. Steve has helped thousands of customers go solar and has trained thousands of solar consultants. He has written hundreds of expert articles on solar energy, including every page on this website. Check out the Arizona Solar Education, Arizona Solar FAQ, About, Services, and Customers sections for more of his work.
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There are several Arizona solar incentives and Arizona solar rebates available. The Grand Canyon State in the sunniest state in the country, which means it’s a great place to install a solar panel system. If you have a high electricity bill, you could save thousands of dollars by switching to solar.
Here we will list all of the Arizona solar incentives and rebates.
Arizona Solar Tax Credit
Arizona Revised Statutes (A.R.S.) Title 43 Section 1083 is called the Credit For Solar Energy Devices. This state tax credit is equal to 25% of the total system cost. It can be claimed in more than one year, but the credit has a lifetime maximum of $1,000 per residence.
If the homeowner owes less taxes than the amount of the tax credit, he can carry it over for a maximum of five years. Spouses who file separate returns are entitled to one-half of the tax credit.
Other technologies that are eligible for the credit are:
- Solar Water Heaters
- Passive Solar Space Heaters
- Solar Space Heaters
- Wind Energy Devices
- Solar Ovens
- Solar Cooling
- Solar Pool Heating
- Biomass Devices
Arizona Solar Property Tax Exemption
A.R.S. Title 42 Section 11054 covers the Arizona solar property tax exemption. It states that any device designed to produce solar energy for on-site consumption is considered to add no value to the home for property tax purposes.
Some other equipment that produces energy from renewable resources also qualifies for the exemption:
- Wind
- Forest Thinnings
- Agricultural Waste
- Biogas
- Biomass
- Geothermal
- Low-Impact Hydropower
Arizona Solar Sales Tax Exemption
A.R.S Title 42 Section 5061 covers the solar tax exemption for Arizona. It states that the 5.6% Arizona state sales tax is waived on the sale of solar energy devices. This helps Arizona residents save immediately on the cost of solar panels.
Federal Solar Investment Tax Credit (ITC)
The government provides a 30% Federal Solar Tax Credit for residential solar systems called the Residential Clean Energy Credit.
The House of Representatives Bill 5376 (”H.R. 5376”), also known as the “Inflation Reduction Act of 2022”, became law on August 16, 2022. It updated the Residential Clean Energy Credit, which contains the Tax Credit for residential solar panel systems. The Tax Credit on residential solar panel systems was extended to December 31, 2034 and increased to 30%.
This is the Tax Credit step down program:
- After December 31, 2021, and before January 1, 2033, the Tax Credit will be 30 percent;
- After December 31, 2032, and before January 1, 2034, the Tax Credit will be 26 percent; and
- After December 31, 2033, and before January 1, 2035, the Tax Credit will be 22 percent.
For more information, view our pages on the Tax Credits and Solar Tax Credit Extension.
Arizona Commercial Solar Tax Credit
A.R.S. § 41-1510.10 established the Arizona Solar Energy Tax Incentives for commercial solar projects. From 2005 to 2018, Arizona businesses received a tax credit of 10% of the total solar system cost. The credit was limited to $25,000 per building and $50,000 per year for each business.
The Arizona commercial tax credit expired on December 31, 2018 and has not yet been renewed.
Mohave Electric Cooperative Sunwatts Renewable Energy and Rebate Program
The Mohave Electric Cooperative provides energy to the areas surrounding Kingman and Bullhead City, Arizona. Rebate funds are provided to residential and small commercial members that install solar energy systems, wind, or solar water heating systems at their home or business.
The incentive for solar systems is a five cent rebate per watt. The maximum system size allowed is 50 kW with a maximum incentive of $2,500. Customers that lease their solar systems are not eligible.
Mohave also offers a rebate of $500 for each solar battery purchased. The battery must meet the following requirements:
- Minimum 5 kWh storage capacity
- Must have programmable controls and/or wi-fi capabilities
- Must not be charged during On-Peak periods
APS Residential Battery Pilot Rebate
You can receive up to $3,750 in rebates when you purchase a home battery and enroll in the APS Battery Pilot program. This program is designed to help APS learn about battery performance in a variety of conditions.
The customer agrees to give APS access to data associated with the battery system and share up to 80% of the battery system’s capacity for a maximum of 100 events a year. The customer is eligible for an incentive of $500 per installed kW (up to $2,500 per home) for installed battery capacity plus an additional $1,250, with a maximum incentive of $3,750 per home.
As of November 1, 2022, APS only has $566,890 left in their budget for this program, so schedule a free consultation today to take advantage of this rebate!
Generac and APS Battery Rebate
Generac and Arizona Public Service (APS) are offering a $4,000 rebate on 18 kilowatt-hour (kWh) Generac batteries. Phoenix Solar Panel Systems is one of the few solar companies that Generac and APS has chosen to offer this rebate. If you’re interested, Schedule a Free Consultation with us today because the rebate is only available for a limited time.
Net Metering and Net Billing
The Arizona Public Service (APS) utility offers a net billing program that is similar to net metering. APS pays homeowners per kWh for excess energy they export to the grid. This results in a credit on the customer’s electricity bill and rolls over to the following months.
As energy is drawn from the APS grid, the credits are consumed instead of the customer being charged. Credits are paid out annually if the customer has a credit balance at the end of the year.
The Salt River Project (SRP) utility offers a net billing and net metering program, depending on which solar plan is chosen. With the net metering plans, the amount of energy drawn from the grid and the amount of energy sent to the grid is totaled at the end of the billing cycle. If the customer sent more energy than they drew, SRP pays them per kWh for the difference. If the customer drew more than they sent, SRP charges them per kWh at the normal rate.
