Federal Solar Investment Tax Credit (30%) Buy a new home solar system, and you will be eligible for the 30% federal tax credit. A tax credit is a dollar-for-dollar reduction in the amount of income tax you would otherwise owe. This credit also applies to energy storage systems that are charged by your solar system.

Residential Solar Tax Credit Arizona’s Residential Solar Energy Credit is available to individual taxpayers who install solar at their residences. The credit is worth up to 25% of the cost of a solar system with a $1,000 limit.

Net Metering Net metering is a program that requires your electric company to purchase excess electricity your solar panels produce. For example, your system may produce more electricity on a typical sunny day than your home consumes. When solar production exceeds usage, the utility meter will “spin” backward and provide you with credits. These credits can then be used when the solar system is not producing electricity, such as at night. Arizona has a net billing structure in which utilities are not required to provide customers with the full retail rate for excess electricity production. Instead, they pay an avoided cost rate, which differs depending on your utility.

Property Tax Exclusion Adding a solar energy system to your home will not increase your property taxes.

Sales Tax Exemption In Arizona, no sales tax will be added to the purchase of your solar system.

This guide provides an overview of the different federal, state, and local incentives available to those interested in residential solar. It does not constitute professional tax advice or other professional financial guidance. This overview should not be used as your only source of information. Other sources should be consulted when making purchasing, investment, and tax decisions; or while executing other binding agreements.