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Solar incentives in Arizona

What is actually on offer here in 2026 — the state incentive, the federal position, and the export rule, which is usually worth more than either.

$1,000 state incentive, on $30k
$0federal credit if you buy
2rate schedules modelled

The state incentive

AZ Residential Solar Tax Credit. 25% of system cost, capped at $1,000. Plus a sales and property tax exemption.

On a $30,000 system this is worth $1,000. The reference cost is stated so you can check the figure rather than take it on trust; the calculator uses whatever cost you enter.

The federal position

§25D, the 30% residential credit, expired for systems placed in service after 31 December 2025 — installed, not merely purchased. §48E did not expire on that schedule, and a company owning panels on your roof under a lease or PPA can still claim it. That asymmetry, not anything specific to Arizona, is the largest single change in residential solar economics. The detail, with sources.

Rate schedules and export rules

What your surplus earns is set here, and it is where two identical systems a mile apart stop being comparable.

Arizona Public Service — Time-of-Use 4–7pm Weekdays

A narrow 3-hour weekday peak and a deep winter midday super-off-peak. Fixed charge $13.00/month. Summer On-peak $0.34, Off-peak $0.12, Super off-peak $0.12. Winter On-peak $0.33, Off-peak $0.12, Super off-peak $0.03.
Exports: a fixed export credit of 5.55¢/kWh, set by the commission and stepping down each year.
Source: APS Time-of-Use 4pm–7pm Weekdays service plan

Salt River Project — E-27 Customer Generation

SRP puts solar customers on a demand plan. Energy is cheap; the monthly peak-kW charge is where the bill lives. Fixed charge $20.00/month. Summer On-peak $0.07, Off-peak $0.06. Winter On-peak $0.07, Off-peak $0.06.
Exports: a fixed export credit of 3.45¢/kWh — SRP's bill is driven by a monthly peak-demand charge more than by exports.
Source: SRP residential solar price plan comparison

Production in Arizona

CitykWh per kW / year7 kW system
Phoenix, AZ1,63111,418

Policy changes affecting Arizona

Work out your own number

Credits are the easy part. What decides payback is how much of your own production you use versus export, hour by hour, against the schedules above.

Open the payback calculator →

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