Arizona Energy Tax Credits in 2026: What Ended and What Is Left

Most pages on this subject still tell homeowners they can get 30 percent back on solar. That stopped being true for anything installed this year. Below is where each program actually stands, verified against the statute and the agencies that run them, as of August 7, 2026. This is general information rather than tax advice, and your own return is a question for your CPA.

Did the federal home energy tax credits really end?

Yes. The One Big Beautiful Bill Act moved both termination dates to December 31, 2025. The efficiency credit under Section 25C ends for property placed in service after that date. The solar credit under Section 25D ends for expenditures made after it. Neither one has a transition rule.

Those two triggers are not the same test, and the difference decides real cases. For the solar credit, the statute treats an expenditure as made when the original installation is completed. A system paid for in full in December 2025 whose installation finished in January 2026 does not qualify, and the IRS has said so directly in its guidance on the new law. A system finished in 2025 and paid for in 2026 does qualify, on the 2025 return.

One thing worth knowing if you go reading further. The IRS's own consumer page for the solar credit still describes the cutoff in placed-in-service terms, which is not what the amended statute says. The statute controls, and it is published at 26 U.S.C. 25D. Nearly every summary that gets this wrong got it wrong from that page.

I installed in 2025 and never claimed it. Can I still get that money?

Yes, in two separate ways. You can amend your 2025 return using Form 1040-X with the 2025 version of Form 5695 attached, generally within three years of filing the original. And if your solar credit was larger than your tax bill that year, the unused portion carries forward into 2026 and beyond on its own.

The carryforward is worth understanding because it is the one federal piece that still has value in 2026. Section 25D lets an unused credit roll into the following tax year, so a large 2025 system can keep reducing what you owe for years after the credit itself stopped being available to anyone new. The efficiency credit under 25C has no equivalent, so an unused amount there is simply lost.

What energy tax credit does Arizona still offer?

Arizona's Credit for Solar Energy Devices, claimed on Form 310, is still in effect for state returns. It is 25 percent of the device cost including installation, capped at $1,000, and it is nonrefundable, meaning it only offsets Arizona income tax you actually owe. Unused amounts carry forward up to five years.

The cap is the part that gets misreported constantly. That $1,000 is not a yearly allowance. Under A.R.S. 43-1083 it is the lifetime maximum for the same residence, so a homeowner who already claimed the full $1,000 on an earlier system at that address gets nothing further for a second one. The 25 percent figure also only reaches the cap at $4,000 of system cost; above that, the credit stops growing.

Are the Efficiency Arizona rebates still open?

Yes, and they work differently from a tax credit. A rebate does not depend on owing tax and is not claimed on a return. Efficiency Arizona is income-based, runs up to $14,000 per household, and is administered by the Arizona Governor's Office of Resiliency. Applications go through EfficiencyArizona.com.

The timing matters right now. On July 21, 2026 the state announced changes required by a federal Department of Energy notice. Starting September 1, 2026, fuel switching is no longer eligible: rebates will only cover replacing an existing electric appliance, not converting a gas appliance to electric. August 28, 2026 is the last day to secure a reservation under the current rules.

In practice that splits Arizona homes into two groups. If your heat, water heater, or dryer runs on gas, the window to have that conversion rebated has effectively closed. If those are already electric, upgrading them to efficient heat pump versions stays eligible, at caps of up to $8,000 for heat pump heating and cooling, $1,750 for a heat pump water heater, and $1,600 for insulation, air sealing, and ventilation.

What this changes when you are buying or selling a home with solar

It changes what a buyer can assume about adding solar later. Until this year, a buyer could tour a home without panels and privately price in a system at 30 percent off. That discount no longer exists federally, so the full cost of adding solar after closing now lands on the buyer with only Arizona's $1,000 credit against it.

The mirror of that is a home that already carries owned solar. Replicating that system now costs meaningfully more after tax than it did in 2025, which is a real argument for the seller rather than a talking point. It is worth having the actual install date and the ownership status, owned versus leased versus a power purchase agreement, in hand before the conversation starts.

Nothing here transfers a credit. The federal credit belonged to whoever paid for the installation in the year it was completed, and buying a house with panels already on the roof is not an expenditure for installing them.

Frequently asked questions

Can I still get the 30 percent federal solar tax credit in 2026?

No. The Residential Clean Energy Credit under Section 25D ended for expenditures made after December 31, 2025, and an expenditure counts as made when the original installation is completed. A system finished in 2026 does not qualify no matter when it was ordered or paid for.

I paid for my solar in 2025 but it was installed in 2026. Do I qualify?

No. The IRS addressed this directly in its guidance on the new law. Payment date is not the test for the solar credit. What matters is when the original installation was completed, so a project finished in 2026 falls outside the credit even if it was paid in full the year before.

Does Arizona still have its own solar tax credit?

Yes. Arizona's Credit for Solar Energy Devices survives the federal changes because it is a separate state credit. It is 25 percent of cost up to $1,000, nonrefundable, and carries forward five years. The $1,000 is a lifetime cap for that residence rather than an annual one.

Is Efficiency Arizona a tax credit?

No, it is a rebate program funded through the Inflation Reduction Act and run by the state. You do not claim it on a tax return and it does not require having tax liability. It is income-based, and after September 1, 2026 it covers replacing existing electric appliances rather than converting from gas.

How long do I have to amend a 2025 return to claim a credit I missed?

Generally three years from the date you filed the original return, or two years from when you paid the tax, whichever is later. You would file Form 1040-X with the 2025 version of Form 5695 attached. Your tax preparer can confirm the exact deadline for your situation.

Planning a move in the East Valley?

If a home you are considering has solar, or you are weighing whether to add it before selling, the arithmetic changed this year and it is worth running before you commit. Start with what your home is worth today with a current home valuation, or reach out and we will walk through it. We are real estate agents rather than tax professionals, so take the tax side to your CPA before you file anything.

Josh Hogan | Live AZ Co | Real Broker AZ, LLC #LC696641000 | Equal Housing Opportunity