Solar in Arizona

Solar panels in Arizona: cost, incentives, and quotes

A typical residential solar system in Arizona costs $15,500-$22,000 installed in 2026, with no federal tax credit available for customer-owned systems (Section 25D ended December 31, 2025). Arizona uses the Resource Comparison Proxy (RCP) framework rather than 1:1 retail net metering, with export rates roughly 25-40% below retail. Arizona offers a 25% state tax credit (capped at $1,000) plus a property tax exemption. With 6.0-7.5 peak sun hours daily, typical payback runs 9-13 years.

$15.5K–$22K
Avg. system cost
25% (cap $1,000)
State tax credit
6.0–7.5 hrs
Avg. daily sun hours
9–13 yrs
Avg. payback period

Solar incentives in Arizona

Federal context

Federal credit status (post-OBBBA, 2026 forward)

The 30% federal residential solar tax credit (Section 25D) ended December 31, 2025 under the One Big Beautiful Bill Act (Public Law 119-21). For solar systems placed in service after that date, customer-owned installations (cash or loan) receive no federal credit. The commercial Section 48E credit remains available through 2027-2030 deadlines for third-party-owned systems (leases and PPAs); the installer typically passes some benefit through as lower monthly payments. Consult a qualified tax advisor about how the current rules apply to your specific situation.

State tax credit

Arizona Residential Solar Energy Credit

Arizona offers a 25% state income tax credit for residential solar installations, capped at $1,000 per home. The credit is claimed on Arizona Form 310 and can be carried forward for up to five years if your tax liability is insufficient to use it in a single year. Consult a qualified tax advisor about how the credit applies to your situation.

Property tax benefit

Arizona property tax exemption

Arizona exempts the added home value from a solar installation from property tax assessment. The exemption is automatic; no application is needed.

Utility export structure

Resource Comparison Proxy (RCP) net billing

Arizona regulated utilities (APS and TEP) use the Resource Comparison Proxy framework rather than 1:1 retail net metering. Export credits are set annually by the Arizona Corporation Commission and run roughly 25-40% below retail. The export rate is locked in at the time of interconnection for a 10-year period (grandfathered).

Incentive details change. Verify current rules with your installer or a qualified tax advisor before making financial decisions.

Frequently asked questions about solar in Arizona

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Solar Savings Compare is a comparison marketplace, not a solar installer. Cost estimates are averages and vary by system size, roof type, usage, and local installer pricing.