Solar power is an increasingly popular choice for homeowners and businesses in Arizona, and for good reason. The state’s abundant sunshine makes it an ideal location for harnessing solar energy. Understanding the incentives available in Arizona can help you make an informed decision about whether solar power is right for you. 

Here’s a straightforward look at what the state has to offer.

Federal Solar Investment Tax Credit (ITC)

The most significant incentive for solar power across the United States, including Arizona, is the Federal Solar Investment Tax Credit. This program allows you to deduct a portion of your solar system’s cost from your federal taxes. 

The percentage varies based on when you install your system, but it’s a substantial benefit that reduces the overall cost of going solar.

Net Metering

Net metering is another key incentive in Arizona. 

It allows you to send any excess electricity your solar panels produce back to the grid. In return, you receive credits on your utility bill. 

This means that on days when your system produces more power than you use, you’re effectively storing that energy in the grid for later use.

Solar Equipment Sales Tax Exemption

In Arizona, when you purchase a solar energy system, you’re exempt from paying sales tax on the equipment. This can lead to significant savings, especially considering the initial cost of solar panels and related equipment.

Property Tax Exemption for Solar Installations

Installing a solar system can increase the value of your property. In Arizona, however, this increase in value won’t affect your property taxes. The state offers a property tax exemption for the added value that solar installations provide, making it a financially savvy move.

Utility Company Incentives

Various utility companies in Arizona offer their own incentives for solar power. These can include rebates, performance-based incentives, or other financial benefits. 

It’s worth checking with your local utility company to see what they offer.

Solar Financing Options

While not direct incentives, various financing options available in Arizona make solar more accessible. These include solar leases, power purchase agreements (PPAs), and solar loans. 

Each has its benefits and drawbacks, so it’s worth exploring to find what best suits your needs.

Local Government and Community Programs

Some local governments and community organizations in Arizona offer additional incentives or support programs for solar installations. These can vary widely, so it’s a good idea to check what’s available in your specific area.


Arizona offers a range of incentives that make solar power an attractive and viable option for many. From tax credits and exemptions to utility company programs, there are numerous ways to save money while making a positive impact on the environment. 

That said, you have to keep in mind that solar incentives can change, so it’s always a good idea to get the latest information before making a decision. With these incentives, going solar in Arizona is not just environmentally friendly; it’s also financially smart.