Greg Field

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To qualify for the tax credit, your system must be installed by New Year’s Eve. The IRS has stated that you don’t need final permission to operate from your utility company by that date, but the project must be physically complete and ready to go.”

Solar incentives

Local solar industry faces cuts to its tax credits

Energy Tax Credits

Arizona utilities, solar industry brace for tax bill cuts

For nearly two decades, Arizona homeowners have had a unique financial advantage: the ability to turn our state’s greatest natural resource, the sun, into a meaningful return on investment. Thanks to the federal solar tax credit, thousands of families have lowered their utility bills, increased their home value and added energy independence. But that window is closing fast.

The Residential Clean Energy Credit, the 30% federal tax credit for solar panels and battery storage systems, will expire Dec. 31, 2025. If your system isn’t installed by the end of this year, you’ll miss out entirely. And for many Arizona families, that means walking away from thousands of dollars.

On a typical $30,000 solar or battery system, the 30% credit amounts to $9,000, not in future savings, but as a direct, dollar-for-dollar reduction on what you owe the IRS. It’s been the single most powerful driver of solar adoption in Arizona, transforming the industry from a high-end upgrade into a mainstream home improvement.

Arizona has led the way because it makes sense here more than almost anywhere else. We get more than 300 days of sunshine a year. We have some of the highest utility demand charges in the country. And every summer, as temperatures rise, so do our electric bills. Solar and battery systems offer families a practical solution.

Since 2023, standalone battery systems, which store cheaper off-peak electricity and let you use it when rates spike, have qualified for the full 30% credit. That’s a big deal for homeowners who want backup power during outages or aren’t ready to commit to rooftop panels. Batteries typically cost about half as much as a full solar system and can still dramatically reduce your bills.

What does that mean for Arizonans as the deadline approaches? To qualify for the tax credit, your system must be installed by New Year’s Eve. The IRS has stated that you don’t need final permission to operate from your utility company by that date, but the project must be physically complete and ready to go. In other words, waiting until fall to make a decision is not a safe strategy. Installers will be overwhelmed, and supply chains will tighten. Every week you wait, you risk missing out entirely.

After 20 years in the industry, I can say this is the most urgent moment for homeowners considering solar. I’m telling homeowners the same thing I’d tell my own family. Don’t wait. Get multiple quotes and work with a licensed, experienced installer who can guarantee your system will be complete before the end of the year.

Beyond the immediate savings, solar also adds long-term value to your home. Studies from Zillow and the National Renewable Energy Laboratory have shown that homes with an owned solar system sell for more than those without. And unlike a kitchen remodel or landscaping, solar is an investment that pays you back every month along the way.

We’ve spent the past 20 years with the government as a financial partner in home energy upgrades, but the partnership ends this year. If you’ve been thinking about solar or battery storage, even just considering it, now is the time to act.

Editor’s note: Greg Field is owner of Tempe-based PGT Home Energy Solutions. Please submit comments at yourvalley.net/letters or email them to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.