Solar in Arizona: Maximum Sun, Minimum Export Rates, One Lifetime Credit
Arizona pairs the best solar production in the country with some of its lowest export rates. The state still offers a rare income tax credit, but the number that decides your math is which utility serves you and when you locked your export rate.
Solar incentives in Arizona
State, utility, and local programs that can lower the cost of going solar here. Availability and amounts change, so verify each before counting on it.
| Program | Type | What to know |
|---|---|---|
| State income tax credit (A.R.S. 43-1083) | Income tax credit | 25 percent of system cost up to $1,000, claimed on Form 310, with unused credit carried forward up to five years. The $1,000 is a cumulative lifetime cap per residence: later additions cannot earn a second credit at the same home. |
| Property tax: adds no value (A.R.S. 42-11054) | Property tax | Solar devices are treated as adding no value to the property for assessment. Submit installation cost documentation to the county assessor on the statutory timeline. |
| Sales tax (TPT) exemption | Sales tax | Retail sales of solar energy devices are deducted from the state transaction privilege tax base when bought from a registered solar retailer, making qualifying equipment effectively state sales tax free. |
Net metering in Arizona
Net billing at the regulated utilities; SRP plays by its own rules. Arizona ended retail net metering in 2017. APS and TEP customers earn the Resource Comparison Proxy export rate, which can step down up to 10 percent a year but locks for 10 years at your interconnection: APS credits 6.171 cents for 2026, and TEP runs roughly 5.1 to 5.7 cents depending on the current rate year. SRP, a self governed public power district, pays a flat 3.45 cents on its export plan, and its legacy solar demand charge plans sunset in November 2029. The application date, not the panel brand, decides a decade of export value here.
Going solar in Arizona: what shapes the numbers
The local factors that move payback and savings most.
The clock on the export rate
Because the RCP steps down most years and locks for 10 at interconnection, waiting costs real money at APS and TEP. Earlier applicants keep richer rates for a decade.
Production covers a lot of sins
Arizona panels produce near the national maximum, and summer cooling loads line up with production hours, which pushes self consumption up without lifestyle changes.
SRP and APS are different worlds
The same house on the other side of a Phoenix street can face a different export rate, different plan structures, and a different regulator. Identify your utility before comparing any quotes.
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Local considerations for Arizona homeowners
Conditions and rules that tend to come up when going solar in this state.
- HOA restrictions that impair a solar device are void under A.R.S. 33-1816, and a homeowner who substantially prevails in court must be awarded attorney fees
- Solar installation requires an Arizona Registrar of Contractors license with a solar classification; installers must file a compliant solar warranty
- Solar customers at the regulated utilities are billed on time of use style plans, so model the plan you will actually be on
- The state credit is claimed once per residence up to $1,000 lifetime, so phasing an install across years does not add credit
- No federal residential credit applies to homeowner purchases placed in service after December 31, 2025
Before you sign a Arizona solar contract
Questions worth asking any installer before you commit:
- Which utility serves my address, and what exactly is its current export rate?
- When does my interconnection application lock my rate, and what is the rate today versus after the next step down?
- Is the installer ROC licensed with the solar classification, and is the statutory solar warranty on file?
- Has the $1,000 lifetime state credit already been used at this residence?
- Does the quote avoid subtracting a federal credit for a 2026 homeowner purchase?
- If I am on SRP, which price plan applies and what happens to legacy plans by November 2029?
Related solar guides
Solar in Arizona: frequently asked questions
Does Arizona still have a state solar tax credit?
Yes. The credit is 25 percent of the system cost up to $1,000, claimed on Form 310 with a five year carryforward. The cap is cumulative for the residence: combined credits for the same home can never exceed $1,000 no matter how many devices you add.
What does APS pay for exported solar in 2026?
The Resource Comparison Proxy export rate, 6.171 cents per kWh for 2026, down from 12.9 cents when the system began in 2017. The rate you get at interconnection locks for 10 years, and the published rate can step down up to 10 percent each year.
Is SRP different from APS for solar?
Very. SRP is a self governed public power district outside Arizona Corporation Commission jurisdiction. Its export plan pays a flat 3.45 cents with no 10 year lock, and its legacy solar plans, including the demand charge plans, sunset in November 2029.
Do solar panels raise property taxes in Arizona?
No. State law treats solar energy devices as adding no value to the property for tax assessment, and qualifying retail purchases are also effectively free of state sales tax when bought from a registered solar retailer.
Can my HOA block solar in Arizona?
No. A.R.S. 33-1816 voids HOA restrictions that effectively prohibit a solar device or impair its function, allowing only reasonable placement rules, and it awards attorney fees to homeowners who substantially prevail in court against a violating HOA.
Solar in other states
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