Arizona solar incentives are small, but they are written into state law. You get a state income tax credit of up to $1,000, and two rules keep sales tax and property tax off your system. The larger question is what your utility pays for the solar power you do not use yourself. Each utility sets its own rate. At APS, TEP, UNS Electric and Trico, the rate on the day you apply stays fixed for 10 years. SRP can change its rate every year.
Recently changed: the APS rate for new applications fell from 6.171 cents per kWh to 5.554 cents per kWh on September 1, 2026. Since October 1, 2026, new applications get 5.51 cents per kWh at UNS Electric (was 6.12 cents per kWh) and 4.62 cents per kWh at TEP (was 5.13 cents per kWh). The state tax credit (A.R.S. 43-1083) and the sales tax rule (A.R.S. 42-5061(M)) are both still in state law.
What does Arizona give a home that goes solar in 2026?
Five things count. Three are state law and apply everywhere. Two depend on which utility sends your bill.
Incentive | What it is worth | Who can use it | What you must do | End date |
|---|---|---|---|---|
State tax credit | 25% of your cost, up to $1,000 per home | Arizona residents who buy a system. Not leases. | File Arizona Form 310 with your state tax return | None in the law |
Sales tax rule | No state or city sales tax on solar equipment | People who buy or lease | Use a seller registered with the state as a solar energy retailer | None in the law |
Property tax rule | Solar adds nothing to your home’s taxable value | Homes with a system built mainly for their own use | Nothing to file | None in the law |
Credit for extra power | 1.87 cents per kWh to 5.554 cents per kWh, by utility | Homes with new solar | Your installer applies to connect the system | New applicants get a new rate each year |
Battery payments | APS: $110 per kW a year. TEP: $120 per kW per season. | APS and TEP homes with a supported battery | Sign up in your battery maker’s app | APS: a five-year pilot |
The federal tax credit for home solar ended for systems finished after December 31, 2025.
APS, SRP, TEP or another utility: who buys your extra solar power?
The name is at the top of your electric bill. Open yours to see its rate, its rules and its battery program.
APS (Arizona Public Service)Much of metro Phoenix, plus Flagstaff, Prescott and Yuma.Extra power: 5.554 cents per kWh, fixed for 10 years
What you can get with APS (Arizona Public Service)
- Credit for extra power5.554 cents per kWh
For applications sent in from September 1, 2026 through August 31, 2027, then fixed for 10 years from the day your system is connected. Example: 1,000 extra kWh earn $55.54.
- Battery payment (APS Storage Rewards)$110 per kW a year
A bill credit for the average power your battery gives on up to 60 busy evenings from May 1 through October 31. Example: an average of 3 kW earns $330. You sign up in your battery maker’s app. It is a five-year pilot with room for 5,000 homes.
Your bill credits
Power your panels make that your home does not use at that moment goes to the grid. APS pays for it as a credit on your monthly bill. A credit you do not use moves to the next bill. After your December bill, APS sends a check if more than $25 is left.
You must be on an APS time-of-use plan: a plan where power costs more from 4 p.m. to 7 p.m. on weekdays. One version adds a demand charge: a fee based on the hour in which you use the most power in that window. APS says a solar home’s bill also includes a grid access charge. Ask APS for the amount.
Watch out: Your rate follows the date of your interconnection application: the request your installer sends APS to connect the system to the grid. You keep it only if the system is installed and approved within 180 days of that date (270 days if APS or another party causes the delay).
Also for every Arizona home: the state tax credit and sales tax and property tax.
SRP (Salt River Project)Much of the Phoenix area. SRP is a public power district and sets its own prices.Extra power: 1.87 cents per kWh, can change each May
What you can get with SRP (Salt River Project)
- Credit for extra power, main plans1.87 cents per kWh
On SRP price plans E-16 and E-28, the two plans SRP lists as open to homes with solar. Example: 1,000 extra kWh earn $18.70. SRP sets a new rate each May, for every home on these plans.
- Credit on the older export plan (E-13)3.45 cents per kWh
Example: 1,000 extra kWh earn $34.50. SRP ends this plan in November 2029 and moves its customers to plan E-28. Ask SRP whether it still takes new customers.
- Battery paymentNone found
SRP’s price book lists no payment for home batteries.
Your bill credits
SRP credits your bill for every kWh your system sends to the grid. It does not promise to keep the rate for 10 years. Its price book says every plan, and the credit rate, can change.
Plan E-16 has a demand charge: a fee based on the power you use at your busiest moments on weekday evenings. Plan E-28 has none.
Watch out: The state agency that sets APS and TEP rates does not set SRP’s prices. No APS or TEP number applies to an SRP home.
Also for every Arizona home: the state tax credit and sales tax and property tax.
TEP (Tucson Electric Power)Tucson and the surrounding area.Extra power: 4.62 cents per kWh for applications since October 1, 2026
What you can get with TEP (Tucson Electric Power)
- Credit for extra power4.62 cents per kWh
For applications sent in since October 1, 2026, fixed for 10 years from the day your system is connected. Example: 1,000 extra kWh earn $46.20. Applications sent in before that date keep 5.13 cents per kWh.
- Battery payment (Energy Storage Rewards)$120 per kW per season
A bill credit for the average power your battery gives during up to 100 events a year. It is paid for the summer season and again for the winter season. TEP says a typical battery earns about $360 per season, or up to $720 per year.
Your bill credits
TEP pays for the power your system sends to the grid as a credit on your monthly bill. A credit you do not use moves to the next bill. If more than $10 is left, TEP pays it out on your October bill.
You must be on a TEP time-of-use plan: a plan where power costs more at busy times of day.
Watch out: TEP’s web page about this rate still showed an older rate when we checked. The rate sheet, called the Statement of Charges, is the one that counts. Ask your installer to write the rate and your application date in the quote.
Also for every Arizona home: the state tax credit and sales tax and property tax.
UNS Electric, Trico or another utilityUNS Electric serves Mohave and Santa Cruz counties. Trico is a co-op near Tucson. Other co-ops and city utilities cover the rest.Extra power: 3.124 cents per kWh to 5.51 cents per kWh, or your utility’s own rate
What you can get with UNS Electric, Trico or another utility
- UNS Electric: credit for extra power5.51 cents per kWh
For applications sent in since October 1, 2026, fixed for 10 years. Example: 1,000 extra kWh earn $55.10. Earlier applications get 6.12 cents per kWh. You must be on a time-of-use plan: a plan where power costs more at busy times of day.
- Trico: credit for extra power3.124 cents per kWh
Fixed for 10 years from the day your system is connected. Example: 1,000 extra kWh earn $31.24. Solar members pay a data charge of $3.38 a month, and a minimum bill of about $25 even when the system covers all their use.
- Other co-ops and city utilitiesOwn rate
Ask for the rate per kWh in writing, how long it is fixed, and any monthly charge for solar homes.
Your bill credits
UNS Electric and Trico pay for extra power as a credit on your bill. Neither pays for battery power. TEP’s battery program is closed to UNS Electric homes.
Watch out: Some guides list solar or battery rebates from a rural co-op. We could not confirm one on a co-op’s own page, so none is listed here. Ask your co-op before you sign.
Also for every Arizona home: the state tax credit and sales tax and property tax.
The state tax credit and the tax rules below apply to every Arizona home.
How the Arizona Credit for Solar Energy Devices works
Arizona takes 25% of what you paid for your solar system, including installation, off your state income tax. The credit stops at $1,000. The rule is A.R.S. 43-1083, and it has no end date.
Almost every full system reaches the limit. Example: a typical 7.21 kW system costs $17,232, and 25% of that is $4,308. You get $1,000, so your cost after the credit is $16,232. A small job is different: 25% of a $3,000 add-on is $750.
You claim it on Arizona Form 310, together with Form 301, with your state tax return for the year the system is installed. Your seller must give you a statement of what you paid.
- It lowers tax, it is not a check. If you owe less Arizona income tax than the credit, the rest moves to later years, for up to 5 years.
- It is $1,000 per home, for good. If you already claimed part of it at this address, only the rest remains.
- You must buy the system. Cash or loan both count. A lease or a PPA does not. In both, a company owns the panels on your roof and you pay it each month. A battery bought as part of the system counts toward the cost.
Watch out: Use the newest Arizona Form 310 for the tax year your system was installed.
Request quotes from installers near you
Your ZIP code starts a quote request. APS, SRP, TEP, UNS Electric and Trico pay different rates, so ask each installer which one its savings figure uses.
- Your utility sets the rateWhat extra power earns depends on who bills you.
- No cost, no pressureYou are never obliged to sign.
- Your data is protectedShared only with installers you are matched with.
Is solar equipment taxed in Arizona, and will it raise your property tax?
Arizona’s sales tax is called transaction privilege tax. Under A.R.S. 42-5061(M), the sale of solar equipment is taken out of that tax, for the state and for cities. Leased equipment is covered too. There is one condition: the seller must be registered with the Arizona Department of Revenue as a solar energy retailer.
Ask your installer whether the quote includes any transaction privilege tax, on the equipment or on the installation labor.
Property tax is simpler. Under A.R.S. 42-11054, a solar system built mainly to power your own home adds no value to the property. The county assessor, the office that values your home for tax, should not raise your value because of it. There is no form to file.
Watch out: Check the notice of value your county sends after the install. If the solar system was counted, contact your county assessor. In a lease, the company that owns the panels reports them to the county, not you.
What each Arizona utility pays for extra solar power, and for how long
Arizona no longer gives new solar homes net metering, where each kWh you send to the grid cancels one kWh you buy. New solar homes get a set price per kWh instead. At four utilities, the price on your application date stays with your system for 10 years, and each new year of applicants gets a lower price, by up to 10%. So the date your installer applies matters more than the date you sign.
Utility | Rate for new applications | 1,000 extra kWh earn | Fixed for | Next change for new applications |
|---|---|---|---|---|
APS | 5.554 cents per kWh | $55.54 | 10 years | After August 31, 2027 |
UNS Electric | 5.51 cents per kWh since October 1, 2026 | $55.10 | 10 years | Each October 1 |
TEP | 4.62 cents per kWh since October 1, 2026 | $46.20 | 10 years | Each October 1 |
Trico | 3.124 cents per kWh | $31.24 | 10 years | When regulators approve a new rate |
SRP, plans E-16 and E-28 | 1.87 cents per kWh | $18.70 | Not fixed | Reset each May |
Compare these with the 15.72 cents per kWh the average Arizona home pays for power. A kWh you use at home saves your full price. A kWh you send out earns the rate above. If you later add more than 10% or 1 kW of panels, whichever is greater, APS and TEP move you to the newer rate.
Who misses out on Arizona’s solar money
- You lease the system or sign a PPA. The $1,000 state credit is only for systems you buy.
- This home already used its $1,000. The limit is per home across all years.
- Your APS system is approved too late. If approval takes longer than 180 days, you lose the rate tied to your application date.
- SRP sends your bill, but the quote uses an APS or TEP rate. SRP pays 1.87 cents per kWh on its main solar plans and does not fix the rate for 10 years.
- Your quote still subtracts a federal tax credit. It ended for systems finished after December 31, 2025. Ask for a new quote.
From quote to Form 310: the Arizona steps in order
- Get the rate in writing. The quote should name your utility, its rate for extra power and the application date the rate depends on. Ask if the seller is registered with the state as a solar energy retailer.You, with your installer.
- Send your plans to your homeowners association. Under A.R.S. 33-1816, an association in a planned community cannot ban solar panels. It can set reasonable rules on where they go.You, if your home is in an association.
- The interconnection application goes in. This is the request to connect your system to the grid. At APS, TEP and UNS Electric, its date sets your rate for 10 years.Your installer.
- Install, pass inspection, get permission to run. At APS this must happen within 180 days of the application. A battery can be enrolled with APS or TEP after this step.Your installer and your utility.
- File Arizona Form 310 with your state tax return. Use the return for the year the system was installed. Add Form 301 and keep the seller’s cost statement.You or your tax preparer.
Compare Arizona quotes that name your utility rate
Enter your ZIP code to request quotes from installers in your area. Ask each one to write down the rate your utility pays for extra power, and the date that rate depends on.
The form asks about your home first, then your contact details. EcoGen or its installer partners may contact you.
- Free, no-obligation quotesYou decide if you go ahead.
- Questions first, details lastName, email and phone only at the end.
- Check before you signCompare the rate and the tax credit in each quote.
More Arizona solar guides
Arizona solar incentive questions
Does Arizona Have a Solar Tax Credit?
Yes. Arizona gives a state income tax credit of 25% of the cost of a solar system you buy for your home, up to $1,000 per home. You claim it on Arizona Form 310. Leased systems do not qualify.
Is the Federal Solar Tax Credit Still Available in Arizona?
No. The federal credit for home solar ended for systems finished after December 31, 2025. The Arizona credit of up to $1,000 is separate and still in law.
Does Arizona Have Net Metering?
Not for new solar homes. New customers get a set price for each kWh they send to the grid. APS homes that had net metering before September 1, 2017 keep it for up to 20 years from the day they were connected.
What Do APS and SRP Pay for Solar Power in 2026?
APS pays 5.554 cents per kWh for applications sent in from September 1, 2026 through August 31, 2027, fixed for 10 years if the system is approved within 180 days. SRP pays 1.87 cents per kWh on price plans E-16 and E-28, resets that rate each May and does not fix it.
Do Solar Panels Raise Property Taxes in Arizona?
No. Under A.R.S. 42-11054, a solar system built mainly for use at your home adds no value for property tax, and there is no form to file.
Sources (17)
- A.R.S. 43-1083, solar tax credit: azleg.gov
- Arizona Department of Revenue, Form 310: azdor.gov
- A.R.S. 42-5061(M), sales tax: azleg.gov
- A.R.S. 42-11054, property tax: azleg.gov
- A.R.S. 33-1816, HOA rule: azleg.gov
- APS, Rate Rider RCP: aps.com
- APS, Understanding Solar: aps.com
- APS, Rider EPR-6: aps.com
- APS, Storage Rewards: aps.com
- SRP, Standard Electric Price Plans: srpnet.com
- TEP, Statement of Charges: tep.com
- TEP, Rider R-14: tep.com
- TEP, Beyond Net Metering: tep.com
- TEP, Energy Storage Rewards: tep.com
- UNS Electric, Statement of Charges: uesaz.com
- Trico, Schedule NM1: trico.coop
- IRS, Residential Clean Energy Credit: irs.gov
