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  • Incentives and Rebates

    Federal Tax Credits

    The Investment Tax Credit (ITC) is a 30 percent federal tax credit for solar systems on residential and commercial properties that is in effect through 2019, after which it will fall to 26 percent in 2020, 22 percent in 2021 and 10 percent in 2022..  The ITC allows any homeowner or commercial entity which purchases (not leases) a solar system or other solar device to reduce their federal income tax liability by 30% of the documented costs of the system.  This is a tax CREDIT, not a deduction.

    State of Arizona Tax Credits & Incentives

    • Renewable Energy Tax Incentive Program - The goal of Arizona’s Renewable Energy Tax Credit Program is to encourage business investment that will produce high quality employment opportunities and enhance Arizona's position as a center for production and use of renewable energy products.  The Arizona Commerce Authority may authorize up to $70 million per calendar year to qualified companies through December 2019. The program calls for tax incentives to companies in the solar, wind, geothermal, and other renewable energy industries, providing up to a 10% refundable income tax credit and up to a 75% reduction on real and personal property taxes.
    • Commercial / Industrial Solar Energy Tax Credit Program - The Commercial/Industrial Solar Energy Tax Credit Program is designed to encourage businesses to install solar energy devices at Arizona facilities.  The credit is equal to 10% of the installed cost of the solar energy device, not to exceed $25,000 in credits for one building in a single tax year and $50,000 in total credits per business per tax year.  Tax credits can be used to offset Arizona income tax liability and any unused credit amounts can be carried forward for a five-year period. The program is authorized through 2018 with $1,000,000 in credits authorized each year.
    • Sales Tax Exemption - 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 photovoltaics, as well as net metering transactions involving photovoltaics, and the sale of renewable energy credits (RECs). The sales tax exemption does not apply to batteries, controls, etc., that are not part of the system. Many cities including Tucson also have eliminated sales tax for solar equipment.

    Utility Company Rebates & Incentives

    Tucson Electric Power and Trico Electric do not currently offer financial incentives to customers who install electric PV systems at their home or business.  However, homeowners who purchase a PV system may qualify for federal and state tax credits to reduce the cost of the system.

    Southwest Gas offers a program that provides rebate incentives to qualifying Arizona customers who install solar water heating systems with a natural gas back-up.

    National Database of State Incentives

    DSIREUSA.org is a website and national database supported by the U.S. Department of Energy.  It is a comprehensive and current source of information on local, utility, state, and federal rebates, including incentives and policies that promote the adoption of solar technologies and energy efficiency.

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    the City of Tucson.


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