What the credit is
Short answer: Arizona's solar tax credit equals 25% of your solar system cost, capped at a lifetime $1,000 per residence. Because 25% of a real home system is well above $1,000, almost every homeowner receives the full $1,000. It is nonrefundable and claimed on Arizona Form 310.
Arizona offers a Residential Solar Energy Credit for homeowners who buy and install a solar energy device at their Arizona home. The credit equals 25% of the device cost, with a maximum of $1,000. Because 25% of a real home system is well above $1,000, in practice almost every homeowner lands on the full $1,000. That cap is a lifetime limit tied to your residence, so adding a second system later does not reset it. It is a nonrefundable credit, meaning it can reduce your Arizona income tax to zero but does not pay out beyond what you owe.
It runs alongside the property-tax and sales-tax treatment Arizona gives solar equipment, and for 2026 it stands on its own as the headline state-level homeowner incentive. The figures here come from the Arizona Department of Revenue's Form 310 instructions; rules can change, so confirm current details before you file.
Who qualifies
- You own the solar energy device. Leases and power-purchase agreements do not qualify, because you do not own the equipment.
- The device is installed at your Arizona residence.
- You have Arizona income tax to offset (or you carry the unused credit forward, see below).
How to claim it
- Keep your purchase and installation paperwork for the year the system is placed in service.
- Complete Arizona Form 310, Credit for Solar Energy Devices. You enter the device cost, take 25% of it, and apply the $1,000 limit.
- Include Form 310 with your Arizona personal income tax return.
- If the credit is larger than your tax that year, carry the remainder forward for up to five years.
We design and manage solar projects; we are not tax advisors. Treat this as a plain-English overview and confirm your specifics with a qualified tax professional.
How it fits your real savings
The $1,000 credit is a nice down-payment on the math, but it is not where most of your money comes from. The durable saving is no longer buying as much power from APS or SRP at a rate that keeps rising. The credit shortens your payback; the avoided utility bills are what add up over the life of the system. See how that plays out on the Arizona electric rates page, or put your own bill through the savings calculator.
Curious about the now-closed 30% federal credit? We cover exactly what changed for 2026 on the federal solar tax credit page, and how residential solar in Arizona still pencils out without it.
Arizona solar tax credit: common questions
How much is the Arizona solar tax credit?
For any real home solar system it is effectively a flat $1,000. The credit is technically 25% of the cost of your solar energy device, capped at $1,000, and since 25% of a real system far exceeds $1,000 you get the full $1,000. The $1,000 is a lifetime cap per residence, so it applies regardless of how many solar devices you install. You claim it on Arizona Form 310 with your state income tax return.
Is the Arizona solar tax credit still available in 2026?
Yes. Unlike the federal residential credit, which ended on December 31, 2025, the Arizona state credit has no expiration date and remains available for new installations in 2026. It is a nonrefundable credit against your Arizona personal income tax.
What if my credit is bigger than the tax I owe?
If the credit is larger than your Arizona tax for the year, you do not lose the rest. The unused portion carries forward for up to five consecutive years until it is used up.
Do I qualify if I lease my solar panels?
No. The Arizona credit requires that you own the solar energy device. Leases and power-purchase agreements do not qualify you for this credit, because a third party owns the equipment. This is one of the practical reasons owning your system usually beats leasing it in the long run.
How do I actually claim it?
Complete Arizona Form 310, Credit for Solar Energy Devices, and include it with your Arizona return for the year your system is placed in service. Keep your purchase and installation documentation. We are a solar installer, not a tax preparer, so confirm the details with a qualified tax professional for your situation.