Residential Solar and Wind Energy Systems Tax Credit
Administered by AZ Department of Revenue
You can claim a 25% tax credit on the cost of solar or wind energy devices installed at your Arizona home, up to a maximum credit of $1,000 regardless of how many devices you install. Claim the credit on your Arizona tax return in the year you complete the installation; if your tax liability is lower than the credit amount, you can carry the unused portion forward for up to five years. You cannot qualify if you lease the system or use a power purchase agreement where a third party owns it.
Arizona homeowners are eligible for a state tax credit equal to 25% of the installed cost of qualifying solar and wind systems, capped at $1,000 per installation year. Systems must be owned by the homeowner and installed at their primary Arizona residence to qualify; leased systems and power purchase agreements disqualify the customer from the credit. Contractors can highlight this incentive to customers installing photovoltaics, solar water heating, solar pool heating, small wind turbines, passive solar design, or solar daylighting systems.
This nonrefundable individual income tax credit provides 25% of system costs (maximum $1,000 per year) to homeowners who own and install qualifying solar or wind technologies at their primary Arizona residence. The credit is claimed on tax year returns in the year of installation and unused amounts may be carried forward five years, with no apparent sunset date specified in the available materials. Ineligible customers include those who lease systems or enter power purchase agreements; the program targets owner-occupant residential customers across all solar thermal, photovoltaic, wind, passive solar, and daylighting technologies.
Program details
- Program ID
- 118
- Effective
- 1/1/1995
- Last updated
- 9/4/2026
Eligibility
- Sectors
- residential
- Technologies
- solar - passive solar water heat solar space heat solar photovoltaics wind (all) daylighting solar pool heating wind (small)
Program summary
Arizona's Solar Energy Credit is available to individual taxpayers who install a solar or wind energy device at the taxpayer's Arizona residence. The credit is allowed against the taxpayer's personal income tax in the amount of 25% of the cost of a solar or wind energy device, with a $1,000 maximum allowable limit, regardless of the number of energy devices installed. The credit is claimed in the year of installation. If the amount of the credit exceeds a taxpayer’s liability in a certain year, the unused portion of the credit may be carried forward for up to five years. Taxpayers who lease a system or enter into a power purchase agreement with a third party who owns the system are not eligible to receive the credit (see ITR 13-4 for more information).
Qualifying technologies include solar domestic water heating systems, solar swimming pool and spa heating systems, photovoltaic systems, photovoltaic phones and street lights, passive solar building systems (trombe walls, thermal mass, etc.), solar daylighting systems (excluding conventional skylights), wind turbines, and pumps powered by wind.
Contact & resources
- Contact email
- RWilson@azdor.gov
- Additional resources
Please verify current program details with the administering agency before making any financial decisions.
