For taxable years beginning on or after January 1, 1995, Arizona law provides a solar energy credit for an individual who installs a solar energy device in his or her residence located in Arizona.

The solar energy credit for buying and installing a solar energy device is 25 percent of the cost, including installation, or $1,000, whichever is less. If you install another device in a later year, the cumulative credit cannot exceed $1,000 for the same residence.

If the allowable tax credit is more than your tax or if you have no tax, you may carry the unused credit forward for up to the next 5 years.

To be eligible for this credit, you must be an Arizona resident who is not a dependent of another taxpayer.

A solar energy device is a system or series of mechanisms which collect and transfer solar generated energy and which is designed primarily to:

• Provide heating
• Provide cooling
• Produce electrical power
• Produce mechanical power
• Provide solar daylighting; or
• Provide any combination of the above by means of collecting and transferring solar generated energy into such uses either by active or passive means, including wind generator systems that produce electricity.

Solar energy systems may also have the capability of storing solar energy for future use. Passive systems must clearly be designed as a solar energy device, such as a trombe wall, and not merely as a part of a normal structure, such as a window.

Only a system or device which performs one or more of the above functions qualifies for the credit. An individual component of a system does not qualify for the credit by itself.

See the knowledge base or instructions for Form 310 for further information.

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