The Ultimate Guide to Arizona Solar Tax Credits & Incentives in 2026
Spoke ArticleArizona1 min readVerified Q1 · 2026

The Ultimate Guide to Arizona Solar Tax Credits & Incentives in 2026

SBI Editorial DeskUpdated Q1 · 20263 sections

Arizona provides an incredibly strong foundation for homeowners looking to go solar. By combining massive federal tax incentives with state-level credits and complete tax exemptions, transitioning to clean energy in the desert is highly profitable.

01

The 30% Federal Investment Tax Credit (ITC)

The 30% Federal ITC is the largest financial driver of your solar investment. This program allows you to deduct 30% of your total solar and battery system cost directly from your federal income taxes. If your gross system cost is $30,000, you are eligible for a $9,000 tax credit. There is no maximum limit, and the credit applies to both solar hardware and battery storage installations.

02

The Arizona Residential Solar Energy Tax Credit

On top of the federal credit, Arizona offers a state-level income tax credit. You can claim 25% of your total solar system expenses against your Arizona state income taxes, up to a maximum of $1,000. This provides a direct, dollar-for-dollar reduction in your state tax liability for the year you install the system.

03

100% Property and Sales Tax Exemptions

Arizona completely exempts residential solar equipment from the state's 5.6% sales tax (local sales taxes are also typically waived), giving you an immediate discount at the point of sale. Furthermore, under the Energy Equipment Property Tax Exemption, the added market value your solar system brings to your home is 100% exempt from property tax reassessments. You enjoy the increased home equity without higher property taxes.

End of report · SBI Editorial← All Arizona reports
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