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Save with Solar: Federal and State Tax Credits for Arizona Homeowner

Are you considering solar energy for your home in Phoenix? Now is the perfect time to harness the power of the sun and take advantage of significant savings through federal and state tax credits. Our team at Phoenix Valley Solar can help you navigate these incentives and maximize your savings. You can also use our Arizona solar calculator to get an estimate of your potential benefits.

Federal Solar Tax Credit

The Federal Solar Investment Tax Credit (ITC) is a powerful incentive for homeowners across the United States, including those in Arizona. Here’s how it works:

  • Value: The ITC allows homeowners to deduct 30% of the cost of installing a solar energy system from their federal taxes.

  • Eligibility: The credit applies to systems installed on primary and secondary residences and is available through 2032 at the 30% rate, decreasing to 26% in 2033 and 22% in 2034.

  • Claiming the Credit: To claim the ITC, homeowners must complete IRS Form 5695 and include it with their federal tax return. The credit can be applied to the tax year in which the installation is completed, and any excess credit can be carried forward to future tax years.

Arizona State Solar Incentives

In addition to the federal solar tax credit, Arizona offers several state-specific incentives that make solar energy even more attractive:

  1. Arizona State Solar Tax Credit:

  • Value: Arizona residents can claim a state tax credit of up to 25% of the cost of their solar system, with a maximum credit of $1,000.

  • Claiming the Credit: This credit can be claimed by completing Arizona Form 310 and submitting it with your state tax return.

  1. Sales Tax Exemption:

  • Benefit: Solar energy systems in Arizona are exempt from state sales tax, reducing the overall cost of installation.

  1. Property Tax Exemption:

  • Benefit: The added value of a solar energy system is exempt from property tax assessments, so installing solar panels will not increase your property taxes.

How Homeowners Can Save

By combining the federal solar tax credit with Arizona’s state incentives, homeowners in Phoenix can significantly reduce the cost of installing solar panels. Here’s a breakdown of the potential savings:

  • Upfront Cost Reduction: The 30% federal ITC and up to $1,000 state tax credit can lower the initial investment required for a solar installation.

  • Long-Term Savings: Reduced or eliminated electricity bills can lead to substantial long-term savings, often allowing homeowners to recoup their investment in just a few years.

  • Increased Home Value: Solar installations can increase the value of your home without raising your property taxes, providing an additional financial benefit.


Investing in solar energy is a smart financial decision for homeowners in Phoenix, thanks to the generous federal and state tax incentives available. To get started on your solar journey and maximize your savings, contact our team at Phoenix Valley Solar. We offer expert guidance and support throughout the entire process. Don’t forget to use our Arizona solar calculator to estimate your potential savings and see how much you can benefit from going solar. Embrace the power of the sun and make a positive impact on both your wallet and the environment with Phoenix solar install options today.


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