Arizona · Tax credit · Deep-stack program
AZ Residential Solar Tax Credit
Reduces residential solar owners' tax liability in Arizona -- see the credit amount, who qualifies, and how it shortens payback below.
- 25% of cost, max $1,000
- stated benefit
- Residential
- eligible customers
- 10.3 yr
- Arizona baseline payback
- 4
- other Arizona programs
Deep-stack program · late directory
Arizona runs a 5-program DSIRE stack; this tax credit is one layer on a 10.3-year modeled baseline, not the whole story.
- Stack5 programs
- In-state #3/4
- Type #1/9
- Baseline10.3 yr
In-state directory place #3 of 4 (late alphabet). National tax credit directory #1 of 9. Amounts and eligibility change; verify with the official program page before relying on a dollar figure. Informational only - not financial advice. See our disclaimer.
Program description
State income tax credit of 25% for residential solar systems, up to $1,000 per year.
Program at a glance
- Program type
- Tax credit
- Eligible customers
- Residential
- Stated benefit
- 25% of cost, max $1,000
- State electricity rate
- 13.5¢/kWh
- Arizona solar score
- 61/100
Solar's trajectory in Arizona
The market this incentive operates in: total installed solar capacity in Arizona reported to the EIA.
Arizona's solar incentive stack
How this tax credit sits among Arizona's 4 tracked programs, by type
- Tax exemption
Tax exemption
1 programs
- Net metering
Net metering
1 programs
- Rebate
Rebate
1 programs
- Tax credit
Tax credit
1 programs
What this shows Arizona tracks 4 incentive types; 1 of them, including this one, are tax credits. Credits reduce what solar owners owe directly, on top of whatever the other stacked types provide.
How this tax credit layers inside Arizona's deep stack
The AZ Residential Solar Tax Credit is a state-level credit against what you owe, tracked as one of Arizona's solar incentives in the DSIRE registry. Eligibility is scoped to residential customers, with a stated benefit of 25% of cost, max $1,000. DSIRE lists no scheduled sunset, though enabling legislation and appropriations can still be revised year to year.
That baseline is slower than most states, which raises the stakes for every incentive on the table. Arizona averages 6.5 kWh/m²/day of usable sunlight and residential rates of 13.5¢/kWh, producing an estimated 11,388 kWh/year and $1,537 of annual utility offset on a typical 6 kW system costing $15,900. That baseline already implies a 10.3-year simple payback and a 25-year modeled net of roughly $22,525 before this incentive - every dollar this tax credit delivers compresses that payback further.
Arizona bundles a deep incentive stack, so this program rarely stands alone. Arizona has 5 solar incentive programs indexed in DSIRE, including adjacent options like AZ Solar Property Tax Exemption, AZ Net Energy Metering, APS Renewable Energy Incentive Program. The state's net-metering policy is classified as full, which governs how excess generation is credited and often decides whether a given program is worth claiming for a specific household.
Other Arizona incentives
Frequently asked questions
Where does the AZ Residential Solar Tax Credit sit in Arizona's deep program stack?
How does this tax credit work beside Arizona's other programs?
Who qualifies, and what does a late in-state directory place mean?
How does this incentive affect solar ROI in Arizona?
Which other Arizona programs stack with this one?
Incentive data from the DSIRE (Database of State Incentives for Renewables & Efficiency); state solar economics from NREL and the U.S. EIA. See our methodology · Arizona solar data · ROI calculator · All incentives.