Solar and Wind Equipment Sales Tax Exemption
Administered by Department of Revenue
Arizona exempts the retail sale and contractor installation of solar energy devices from state sales tax, covering solar electric, solar water and space heating, passive solar, daylighting, and wind electric generators and wind-powered water pumps. The exemption does not cover batteries, controls, or other items that are not part of the system, and many cities charge their own 0.5% to 2% privilege tax unless they exempt these sales. You don't apply yourself, so ask your installer to confirm they are registered and check with your city about local tax.
Arizona lets solar energy retailers deduct receipts from sales and installations of solar energy devices from their transaction privilege tax base, which lowers the price you quote customers, and there is no cap per device. To qualify you must register with the Arizona Department of Revenue before selling or installing, using Form 6015, Solar Energy Devices – Application for Registration. Batteries and controls that are not part of the system are not covered, and you should check whether your city's privilege tax of roughly 0.5% to 2% still applies.
This is a transaction privilege tax deduction for retailers, not a rebate, so it is funded through foregone state tax revenue and has no expiration date. It covers retail sales and contractor installation of solar energy devices (solar electric, solar thermal, passive and active solar heating, daylighting, wind generators and wind water pumps), and since S.B. 1229 of 2012 it also covers PV net metering transactions and renewable energy credit sales. Retailers in the commercial, residential, and installer sectors must register with the Department of Revenue on Form 6015, and the $5,000 per-device limit was eliminated by H.B. 2429 in 2006.
Program details
- Program ID
- 119
- Effective
- 1/1/1997
- Last updated
- 9/4/2026
Eligibility
- Sectors
- commercial residential installers/contractors
- Technologies
- solar - passive solar water heat solar space heat solar thermal electric solar photovoltaics wind (all) daylighting solar pool heating wind (small) lithium-ion
Program summary
Arizona provides a sales tax exemption* for the retail sale of solar energy devices and for the installation of solar energy devices by contractors. The statutory definition of "solar energy device" includes wind electric generators and wind-powered water pumps in addition to daylighting, passive solar heating, active solar space heating, solar water heating, and solar photovoltaics. The sales tax exemption does not apply to batteries, controls, etc., that are not part of the system. (Note that H.B. 2429, enacted in June 2006, eliminated the $5,000 limit per device.)
S.B. 1229 of 2012 extended this exemption to net metering transactions involving photovoltaics, and the sale of renewable energy credits (RECs). RECs are typically sold by a renewable energy generator to a utility for compliance with the state's Renewable Energy Standard. S.B. 1229 clarified that sales tax should not be applied to these transactions.
To take advantage of these tax exemptions, a solar energy retailer must register with the Arizona Department of Revenue prior to selling or installing solar energy devices (Arizona Form 6015, Solar Energy Devices – Application for Registration.) The exemption for solar energy retailers has no expiration date.
Most cities have a 0.5% to 2% city privilege ("sales") tax that is applicable to sales or installations of solar energy devices, unless a city specifically exempts such sales under its city tax code. Solar energy retailers should check with the city in which the retail business is located to find out whether city privilege tax is applicable.
*Technically, the law allows retailers to deduct the amount received from the sale of solar energy devices from their transaction privilege tax base.
Contact & resources
- Contact email
- heather@azcommerce.com
Please verify current program details with the administering agency before making any financial decisions.
