Is solar still worth it in Arizona in 2026? It can be, but the math changed. The 30% federal Residential Clean Energy Credit ended for systems completed after December 31, 2025, according to the IRS. What's left: Arizona's 25% state credit, capped at $1,000, a sales-tax deduction on qualifying equipment, and a rule that solar adds no assessed value for property taxes.
What decides the payback now? How much power you use on site versus export. SRP's Time-of-Use Export plan credits exports at 3.45¢ per kWh, and APS's 2026 export rate is $0.05554 per kWh. The more of your solar you use during the day, the stronger the case.
Data note: Tax rules come from the IRS, A.R.S. 43-1083, 42-11054 and 42-5061, and Arizona Department of Revenue Form 310 instructions. Export rates come from SRP and APS's Resource Comparison Proxy rider (effective Sept. 1, 2026). Installed costs and payback periods vary by home and aren't estimated here. No market statistics are included.
Solar in Arizona at a Glance (2026)
- Federal 25D credit: ended for expenditures after Dec. 31, 2025
- Arizona credit: 25% of cost, max $1,000 per residence
- Sales tax: solar device sales by registered retailers are deducted from the tax base
- Property tax: solar is considered to add no value
- SRP export credit (TOU Export plan): 3.45¢/kWh
- APS export credit (2026 tranche): $0.05554/kWh, locked 10 years
What Happened to the Federal Solar Tax Credit?
The Credit Ended for New Systems
Under the One, Big, Beautiful Bill, the IRS says the 25D credit isn't allowed for expenditures made after December 31, 2025. An expenditure counts as made when installation is completed, so a system paid for in 2025 but finished in 2026 doesn't qualify.
Carryforwards Still Count
If you installed before the deadline and couldn't use the whole credit, the IRS says unused credit can still carry forward to future years.
Arizona Solar Incentives That Remain
State Income Tax Credit
- 25% of the cost of the device, including installation
- $1,000 maximum, and $1,000 total for the same residence
- Unused credit can carry forward for up to five years
- Claimed on Form 310
- Purchased systems only. ADOR says leased systems and power purchase agreements don't qualify
Sales Tax Deduction
A.R.S. 42-5061 deducts sales of solar energy devices from the retail tax base when sold by a retailer registered as a solar energy retailer.
Property Tax Protection
A.R.S. 42-11054 says solar devices and grid-tied PV systems designed primarily for on-site consumption are considered to add no value to the property for property tax appraisal.
SRP vs. APS: What You're Paid for Exports
SRP
- The Time-of-Use Export plan credits exported energy at 3.45¢ per kWh
- SRP says the plan remains available until the November 2029 billing cycle, when remaining customers move to another plan
- Compare plans on SRP's solar plan page; winter time-of-use hours matter. See SRP time-of-use hours and winter prices
APS
- APS pays the Resource Comparison Proxy (RCP) rate for exports
- The 2026 tranche (Sept. 1, 2026–Aug. 31, 2027) is $0.05554 per kWh
- Your rate is locked for 10 years from interconnection
- For comparison, the 2025 tranche was $0.06171 and the 2017 tranche was $0.12900
Export credits have trended down over time, so self-consumption, and possibly a battery, matter more than they used to.
When Solar Makes the Most Sense
- You own the home and plan to stay long enough to recover the cost
- You buy the system rather than lease, to qualify for the state credit
- Your usage is high during daylight, such as working from home or running a pool pump midday
- Your roof has good sun exposure and doesn't need replacing soon
Solar and Resale Value
Owned Systems
The Arizona REALTORS resale contract treats affixed solar systems as fixtures that convey with the home when owned.
Leased Systems
Leased items aren't included in the sale, and the contract provides a solar addendum. A buyer often needs the solar company's approval to take over the lease. Read buying a house with leased solar panels.
Insurance matters too: see homeowners insurance cost in Arizona.
“When a listing has solar, the first question I ask is: owned or leased? Owned systems with a full year of utility bills are an easy story to tell buyers. Leases can work, but they add paperwork and a second approval, so sellers should gather the documents before we go live.”
— Elizabeth Vijan, Tackett Team, eXp Realty
FAQ: Is Solar Worth It in Arizona?
Is the 30% solar tax credit still available in 2026?
No. It ended for systems completed after Dec. 31, 2025.
Does Arizona have a solar tax credit?
Yes: 25% of cost, up to $1,000, purchased systems only.
What do SRP and APS pay for exported solar?
SRP: 3.45¢/kWh. APS (2026): $0.05554/kWh.
Does solar raise property taxes in Arizona?
No. Solar is considered to add no value.
Selling a Home With Solar?
I'll help you document your system, bills and any lease so buyers see the value, not the paperwork.
Elizabeth Vijan | Tackett Team, eXp Realty
Scottsdale & Phoenix Real Estate
Let's Talk · Call or text 602-885-7752
Sources: IRS: OBBB energy credit FAQs · IRS: Residential Clean Energy Credit · A.R.S. 43-1083: Solar energy credit · Arizona Department of Revenue: Form 310 instructions · A.R.S. 42-11054: Valuation of solar devices · A.R.S. 42-5061: Retail classification · SRP: Time-of-Use Export price plan · APS: Resource Comparison Proxy rider · Arizona REALTORS: Residential Resale Purchase Contract (sample)
Disclaimer: General information, not tax or financial advice. Credits, rates and plans change; confirm with a tax professional, your utility and your installer. Information deemed reliable but not guaranteed. Equal Housing Opportunity.
Tackett Team, eXp Realty · Get in touch