2024 Solar Incentives Guide for Phoenix, AZ - Tax Credits & Rebates

In this guide, we'll cover the latest solar incentives and rebates available in Phoenix.

You'll learn about:

  • Local & State Solar Incentives
  • Federal Tax Credits (Updated for 2024 and beyond)
  • Ways to optimize your solar investment

Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Phoenix solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated May 20, 2024

Why you can trust EcoWatch

We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

What Solar Tax Credits, Incentives, and Rebates are Available in Phoenix?

Solar and Wind Equipment Sales Tax Exemption

Incentive Type:
Sales Tax Incentive
100% of sales tax on eligible equipment

Residential Solar and Wind Energy Systems Tax Credit

Incentive Type:
Personal Tax Credit

Qualifying Wood Stove Deduction

Incentive Type:
Personal Tax Deduction
Total cost, exclusive of taxes, interest and other finance charges

Energy Equipment Property Tax Exemption

Incentive Type:
Property Tax Incentive
100% of increased value

SRP - Solar Water Heating Program

Incentive Type:
Rebate Program
$0.30/kWh for annual estimated energy savings (based on SRCC rating)

Federal Residential Renewable Energy Tax Credit

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

Source: https://www.dsireusa.org/


Solar incentives encourage people to switch their home over to renewable energy by providing financial incentives meant to lower the burden of solar panel installation and use. You may be eligible for several kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the Arizona government and others from the federal government. You might qualify for any of the following types of solar incentives:

  • Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the government. Tax credits differ from tax deductions.
  • Rebates: A rebate is a partial refund given after you've purchased your solar panels. These may be offered by your local utility company, your county or your state. The discount that rebates offer is normally applied to the price of solar panels before calculating tax credits.
  • Tax Exemptions: These could come in the form of property tax exemptions, which let you ignore the value of your solar system when paying taxes on your home. You could also look for exemptions on sales tax at the time of purchase.
  • Net Metering: Be sure to speak to your Phoenix utility company about signing a net metering agreement. This allows you to get a credit towards your monthly utility bill for the value of excess energy your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.

Best for Leasing

Sunrun

★★★★★
4.0
  • Expansive service area
  • Many financing options
  • Some reported issues with customer service
  • Some reported issues with door-to-door sales

Best Social Impact

Palmetto Solar

★★★★★
4.0
  • Expansive service area
  • Makes charitable contributions
  • Certified B Corp
  • No leases or PPAs
  • Quality of installation may vary by location

Best Technology

Tesla Energy

★★★★★
3.2
  • Price-match guarantee
  • Sleek, efficient, and durable solar panels
  • Best solar battery on the market
  • Some reported issues with customer service
  • Customer service varies by local dealer

Federal Solar Incentives

When thinking about solar incentives, federal incentives are likely the first thing that comes to mind. One of the incentives many people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a predetermined percentage of your solar system's cost.

The ITC applies to the value of a solar system installed on your primary or secondary residence in the United States. The solar panels must have been installed on a property you own after January 1, 2006, for you to claim the credit. The ITC originally paid out 30% of all costs (panels, equipment, accessories and labor), although the total amount has fluctuated over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

Wondering how the ITC applies to your specific situation? Reach out to your local Phoenix solar panel installation expert to get more information.

The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit runs until 2035. Solar installation projects started after January 1, 2022, and completed by the end of 2032 may qualify for a 30% tax credit. The amount will then decrease slightly on a yearly basis until the current program ends. The expansion also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To understand how the new Clean Energy Credit applies to you, reach out to your local Phoenix solar installers.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. As with federal incentives, these may include tax credits, rebates and more. These solar incentives — which may be given by your county or municipality, or by the state of Arizona — may be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Phoenix

Solar incentives might come from your local utility company, the Arizona government or the federal government. The growing number of solar incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. Call your local solar panel installer today to discover more about the various programs and to save the most money possible on a solar system for your Phoenix home.

EcoWatch's Phoenix, AZ Solar Incentives FAQs

How do I know if I qualify for different solar incentives?

It's a smart idea to get in touch with your local Phoenix solar installer for a better understanding of which incentives your project will qualify for. In most cases, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) between the dates specified by the incentive. Some incentives, such as those offered by the government of Arizona, may have other requirements.

I already have solar panels installed. Are there any incentives that I qualify for?

If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the exact installation date. Reaching out to the company that installed your system, or any local Phoenix solar installer, can help you learn what incentives you might want to apply for.

When does the federal solar tax credit end?

The Clean Energy Credit (previously called the federal solar tax credit, or the ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.

Can I qualify for incentives both towards the up-front cost of solar panels, and later as reimbursement?

The order in which incentives are applied may vary depending on which incentives you are claiming but typically yes, you can receive multiple types of incentives for your solar project. Get in touch with your solar installer or a local tax professional to verify you are claiming all the incentives you're eligible for and applying them in the correct order.

Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.

Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.

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