Arizona’s abundant sunshine and open land make it one of the most promising states for renewable energy. From utility-scale solar farms to community wind projects and commercial battery storage systems, green energy initiatives are transforming the state’s energy landscape.
But one thing stands between vision and reality: capital.
Whether you're a solar installer, clean-tech startup, nonprofit, or investor, this guide explores how to fund renewable energy projects in Arizona through loans, grants, tax credits, and state-backed programs.
Arizona ranks among the top states for solar potential and has increasing demand for clean energy solutions due to:
High electricity costs and long daylight hours
Federal and state-level decarbonization goals
Public utility commitments to renewable portfolios
Growing consumer and commercial interest in sustainability
🌞 With over 300 sunny days a year, Arizona is naturally positioned to lead in solar energy production.
But renewable energy systems are capital-intensive. Project financing options help offset large upfront costs and support long-term ROI.
The federal government offers powerful funding options for renewable energy developers and small businesses.
Focus: Large-scale clean energy and grid modernization projects
Programs: Title 17 Clean Energy Financing, Advanced Technology Vehicles Manufacturing (ATVM)
Funding: Up to billions for qualifying clean tech projects
Website: energy.gov/lpo
Use: Renewable energy systems and energy efficiency improvements for rural businesses and ag producers
Grants: Up to 50% of eligible project costs
Loans: Up to 75% of project costs
Eligible Projects: Solar, wind, biomass, geothermal
Arizona USDA Contact: rd.usda.gov/az
Offers up to 30% federal tax credit on solar and other renewable system costs
Can be claimed directly or sold to tax equity investors
Updated under the Inflation Reduction Act (IRA)
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Assess project scope and cost
Identify federal and state incentives
Apply for local permits and utility interconnection
Secure loans or grant pre-approval
Complete engineering and procurement
Install and commission the system
Submit documentation for tax credits or reimbursement
APS: Offers rebates for commercial solar systems, battery storage, and demand response programs
SRP: Rebates for solar water heating, battery storage, and demand management
Application Required: Through certified installers
State income tax credit up to $1,000 for residential solar installations
Can reduce personal tax liability in Arizona
May apply indirectly to business owners installing on mixed-use property
📍 Check azdor.gov for latest credit forms and eligibility criteria.
Small businesses going green in Arizona may qualify for SBA-backed financing, especially through eco-aligned lenders.
For clean energy upgrades, green building construction, or solar system purchases
Offers up to $5.5 million per project
Must reduce energy use by 10% or generate renewable energy
Available from Arizona CDCs like Southwest Business Finance Corporation
Funds working capital, solar equipment, or storage solutions
Terms up to 25 years
Ideal for businesses integrating renewables into their operations
Business: GreenEdge Landscape Supply
Project: 120 kW rooftop solar + battery storage for net-zero operations
Funding:
$100K SBA 504 Green Loan
$30K USDA REAP grant
30% Federal ITC tax credit
Outcome:
Reduced energy bills by 85%
Recouped project cost within 5 years
Marketed “sustainable operations” to gain new clients
Third-party owns and installs the system
Your business agrees to buy electricity at a fixed rate
No upfront cost — ideal for nonprofits or schools
Offer flexible clean energy loans with mission-driven terms
National Clean Energy Fund (launched under IRA) to be rolled out in 2025
Prestamos CDFI and Solar and Energy Loan Fund (SELF) expanding to the Southwest
Lease solar panels or battery storage
Keep cash flow flexible while reducing energy costs
Option to purchase after lease term
U.S. Department of Energy LPO (opens in new tab)
Arizona Department of Revenue Solar Credit Info (opens in new tab)
USDA REAP Program (opens in new tab)
Arizona Public Service Incentives (opens in new tab)
| Pros | Cons |
|---|---|
| Federal and state tax credits reduce project costs | Permitting and interconnection can be time-consuming |
| Grants and loans help offset large capital expenses | Complex application processes for grants/loans |
| Long-term ROI through reduced energy bills | Project timelines may delay access to tax benefits |
| PPA and leasing reduce upfront burden | May limit system ownership and long-term savings |
From solar farms to green commercial buildings, Arizona's renewable energy market is growing fast—and the funding is there to support it.
Whether you’re launching a clean energy startup, converting your warehouse to solar, or developing a battery storage system, there’s never been a better time to fund your project. With the right mix of SBA loans, federal tax incentives, and Arizona-specific programs, your renewable energy vision can become a reality.
Ready to fund your renewable energy project in Arizona?
Connect with a clean energy lender, explore USDA and SBA loan programs, or work with your utility to take the next step toward sustainable energy.