The federal residential solar tax credit ended on December 31, 2025. We tell you the truth about what is left in 2026: which state programs still apply, and which financing paths can still capture federal value.
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Average local electricity rate (cents/kWh)
15¢
Peak sun hours per day (NREL)
6.2 hrs
Typical installed cost per watt
$2.08
Estimated payback (years, zero federal credit)
9.5 yrs
Electricity rate as of 2026-06-01. Sun hours: NREL PVWatts Mesa fixed tilt annual average; range 6.0-6.4 hrs/day. Cost per watt: EnergySage April 2026, Mesa and east Maricopa County. Payback estimate assumes zero federal residential credit (Section 25D expired December 31, 2025) and current utility net-metering tariffs.
Your utility determines your savings
Mesa has two utilities with very different solar economics
Mesa has THREE distinct utility service territories: SRP serves the vast majority of Mesa residential customers; APS serves a small area primarily near boundaries with Scottsdale and Phoenix; and Mesa City Electric (a municipal utility) serves a distinct northeast Mesa service area with its own solar interconnection process and tariff. Confirming which utility serves your specific address is the mandatory first step before any solar evaluation in Mesa. The export rates and demand charge structures differ substantially between all three utilities.
SRP (Salt River Project)
LADWP is a municipal utility exempt from the CPUC's NEM 3.0 mandate. Customers retain full retail 1:1 net energy metering. Every kilowatt-hour your solar system exports to the grid is credited at the retail rate you pay, estimated at 22 to 37 cents per kWh depending on usage tier.
Export credit: approximately 22 to 37 cents/kWh
Full retail 1:1 NEM. Verify at ladwp.com. Rate as of June 2026.
APS (Arizona Public Service) and Mesa City Electric (municipal utility) - both serve portions of Mesa
SCE customers are on the NEM 3.0 Solar Billing Plan, which took effect for new interconnections after April 2023. Under NEM 3.0, solar exports earn only 5 to 8 cents per kWh -- roughly 75 to 80 percent less than the retail rate. Battery storage becomes significantly more valuable for SCE customers: stored solar used during peak TOU hours at 35 to 40 cents per kWh avoids the most expensive grid purchases.
Export credit: approximately 5 to 8 cents/kWh (NEM 3.0)
Solar Billing Plan. Verify at sce.com/nem. Battery storage recommended for SCE territory.
Your address determines your utility. Look up your utility at ladwp.com or sce.com before reviewing any solar proposal. The net-metering difference affects your estimated annual savings by $1,000 to $1,500 on a typical 8 to 9 kW system.
Available programs
Solar incentives in Mesa, AZ for 2026
Incentives available in AZ
Federal residential solar credit (Section 25D): expired. The Section 25D residential investment tax credit expired December 31, 2025.
The residential credit rate is 0%. State and local incentives below may still significantly
reduce your net system cost. Commercial systems still qualify for Section 48E (30%).
Active solar incentives in AZ
Program
Benefit
Eligibility
Status
Source
Arizona 25% State Income Tax Credit
Local/State Incentive
25% of installed solar cost as Arizona state income tax credit, capped at $1,000 per year; excess carries forward (A.R.S. 43-1083)
Non-refundable credit with carryforward. Verify eligibility with a tax advisor.
Arizona state residents with solar on primary residence; requires Arizona state income tax liability
Mesa City Electric Net Metering (northeast Mesa only)
Local/State Incentive
Mesa City Electric customers in northeast Mesa have access to city-run solar interconnection with net metering terms that may differ from SRP; traditional net metering access unavailable from SRP after November 2025
Confirm current net metering terms directly with Mesa Utilities (mesaaz.gov/Utilities/Energy/Electric/Solar-Program) before signing. This is a meaningful differentiator for northeast Mesa customers.
Mesa City Electric customers only; verify service territory at mesaaz.gov using Mesa Electric and Gas Service Area Maps
City of Mesa completed 3.7 MW of solar carports at city facilities in late 2025 (SOLON/Onyx Renewables build), creating a visible local proof of concept for solar reliability and production
Context for homeowner conversations: the city's own investment validates local solar production at scale.
N/A - municipal installation, not a homeowner incentive
Data last verified June 1, 2026. Incentive programs change; verify current amounts and availability at
dsireusa.org (opens in new tab)
before committing to a project.
California property-tax exclusion sunsets December 31, 2026. Solar systems installed and permitted by December 31, 2026 lock in the exclusion for the life of the system under current California law (Revenue and Taxation Code Section 73). Systems installed in 2027 may not qualify if the Legislature does not extend the exemption. Verify current legislative status at ftb.ca.gov before signing a contract.
Why Mesa homeowners are moving now
After the January 2025 wildfires, battery storage became a priority
Mesa completed 3.7 MW of solar carports at city facilities in late 2025, providing visible local proof that solar generation is reliable and productive at Mesa's latitude. Mesa's flat, suburban rooftop geometry and wide lots provide near-ideal solar exposure with minimal shading. The city's triple-utility territory (SRP, APS, Mesa City Electric) is a unique content differentiator: northeast Mesa customers on Mesa City Electric retain access to traditional net metering that is no longer available from SRP, which has retired legacy net metering as of November 2025.
Source: City of Mesa 3.7 MW solar carport completion, late 2025 (SOLON/Onyx Renewables; Solar Power World Online, February 2026) (2026).
Illustrative example
What does a typical Mesa solar system actually cost and save?
Zero federal residential credit applied (Section 25D expired December 31, 2025). Figures are estimates based on market data as of 2026-06-01. Your numbers depend on your roof, your utility, and your bill.
System inputs
System size
10 kW
Gross cost ($2.08/W)
$20,800
Federal residential credit
$0 (expired Dec 31, 2025)
Arizona 25% state income tax credit capped at $1,000
Applied
Arizona sales tax exemption on solar equipment
Applied
Arizona permanent property tax exemption on added home value
Applied
Estimated net cost
$19,800
Estimated outcomes
Annual savings range
$1,500 to $2,200
Estimated payback
9.5 years
Based on a 10 kW system at $2.08/W (EnergySage, April 2026; Mesa and east Maricopa County) and an assumed SRP retail rate of approximately 15 cents/kWh (2026; SRP temporarily reduced rates $0.0038/kWh for May through October 2026 due to lower natural gas costs). Zero federal residential credit applied (Section 25D expired December 31, 2025). SRP's TOU Export Plan credits exports at only $0.0345/kWh, so savings are driven almost entirely by onsite self-consumption. SRP demand plan options credit exports closer to retail but add a summer demand charge of approximately $14.50/kW; right-sizing is critical. Arizona's 25% state income tax credit (capped at $1,000) reduces net cost to approximately $19,800 in year one. Battery storage can reduce SRP demand charges and improve net economics.
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Solar in Mesa: high-adoption areas, equity zones, and post-fire demand corridors
High-adoption neighborhoods
Established solar saturation; higher installers per block, active neighbor referrals, and permit history at LADBS.
Dobson Ranch
Las Sendas
Eastmark
Red Mountain
Riverview
Equity program target areas
Designated disadvantaged communities (DAC) eligible for SGIP equity resiliency, DAC-SASH, and other income-qualified programs. Income verification required.
West Mesa
Central Mesa
Alma School Corridor
Post-fire and growth corridors
Wildfire-affected and adjacent neighborhoods where battery storage demand surged following the January 2025 fires. Rebuilding homeowners and proximate neighbors with elevated grid-resilience priorities.
Cadence at Gateway
Waterston
Eastmark South
LOCAL INSTALL PHOTO -- MESA -- TO BE PROVIDED
Permitting and interconnection
How solar permitting works in Mesa
Authority Having Jurisdiction (AHJ)
Permit office
City of Mesa Building Safety Division
SolarAPP+ status
SolarAPP+: Available (standard review)
Permit fee
Mesa Building Safety Division accepts SolarAPP+ for same-day instant permit issuance on eligible residential systems. A self-certification pathway is also available for permits issued in approximately 5 business days. Permit fees are valuation-based; approximately $300 typical for a standard residential system. AZ HB2301 (effective January 1, 2026) mandates 2-business-day response or deemed approval statewide.
Typical contract-to-energization
7 to 12 weeks (SolarAPP+ permit instant to 1-2 weeks; SRP or APS interconnection 4-8 weeks; Mesa City Electric interconnection: verify timing with Mesa Utilities)
[REVIEW TEXT - TO BE PROVIDED: real customer testimonial with SRP demand charge experience and Mesa utility verification process]
System: 10 kW rooftop solar, SRP territory, TOU Export plan
Eastmark, Mesa
REVIEW -- TO BE PROVIDED
[REVIEW TEXT - TO BE PROVIDED: real customer testimonial mentioning SRP demand charge reduction from battery and SolarAPP+ permit speed]
System: 10 kW rooftop solar plus battery, SRP territory
For business owners and property managers
Commercial Solar in Mesa
Mesa's commercial and light industrial base in east Maricopa County benefits from 6.0-6.4 peak sun hours and the SRP, APS, and Mesa City Electric commercial solar programs. The federal Section 48E commercial Investment Tax Credit was available for qualifying projects where construction begins by July 4, 2026. The city's 3.7 MW solar carport installation demonstrates municipal commitment to solar at scale. Verify utility territory for all Mesa commercial projects.
Commercial solar projects must begin construction by July 4, 2026 to qualify for the 30 percent Section 48E federal tax credit. After that date, the system must be placed in service by December 31, 2027.
City-specific answers. Every number references your utility and your permit office.
Why does Mesa have three utility companies for solar?
Mesa's city limits grew around pre-existing utility service territories. SRP serves the vast majority of Mesa residential customers. APS serves a small area near boundaries with Scottsdale and Phoenix. Mesa City Electric (the city's own municipal utility) serves a distinct northeast Mesa area. The three utilities have different solar policies: SRP retired traditional net metering in November 2025; Mesa City Electric may still offer net metering. Look up your address on the Mesa Electric and Gas Service Area Maps at mesaaz.gov before signing any solar contract.
What is SRP's demand charge and how does it affect Mesa solar?
SRP's residential solar plans include an optional summer demand charge of approximately $14.50 per kW based on your single highest 60-minute peak during on-peak hours (2-8 p.m. weekdays) in a given month. Running AC, electric oven, dryer, and other high-draw appliances simultaneously on a hot afternoon creates a demand event that can add $100+ in charges regardless of solar output. Right-sizing your system to match daytime consumption (not to maximize export) and using battery storage to shift peak loads are the key strategies for SRP customers.
Does Mesa City Electric still offer net metering?
Mesa City Electric, the city's municipal utility serving northeast Mesa, operates its own solar interconnection process separate from SRP. Unlike SRP (which retired traditional net metering in November 2025), Mesa City Electric may still offer net metering terms for eligible customers. This is a material difference worth confirming directly with Mesa Utilities at mesaaz.gov before installation. Verify your address is in Mesa City Electric territory using the service area maps.
Is there a federal solar tax credit in 2026?
No. The Section 25D residential credit expired December 31, 2025 under H.R. 1. Arizona's residential incentives are the 25% state income tax credit (capped at $1,000/year with carryforward), the sales tax exemption on solar equipment, and the permanent property tax exemption on added home value.
Does Mesa use SolarAPP+ for solar permits?
Yes. City of Mesa Building Safety Division accepts SolarAPP+ for same-day instant permit issuance on eligible residential systems. A self-certification pathway is also available for approximately 5-business-day permits. AZ HB2301 (January 1, 2026) mandates that AHJs respond within 2 business days for all qualifying systems.
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These figures are estimates based on the information you entered and from public solar production data. They are not a quote and not a guarantee. They apply no federal residential tax credit, because that credit expired on December 31, 2025.
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