Arizona Electric Vehicle Incentives: Go Green, Save Green!

There are 40,740 registered EVs in Arizona. This means that as a percentage of the 2,410,018 registered vehicles in Arizona, 1.7% are electric cars. Almost double the US average (+-1%.)

🔎 At A Glance

1️⃣ Arizona has one of the most progressive incentive structures to persuade residents to switch to an EV and install a solar system that could be used for electric vehicle charging.

3️⃣ When this is added to the value of the Federal incentives, the financial saving is substantial.

3️⃣ In addition to the State benefits, each electric utility incentivizes both EAVs and Solar system installations.

Overview Of Arizona’s EV Incentives 

Qualifying Arizona residents have access to incentives to switch over to EVs. The incentives are available from the Federal government as well as the state.

The Federal Government

The Federal government offers various rebates for conversion to EVs.

Federal EV Subsidy Scheme

The government offers a $7,500 ($4,000 on used EVs) tax rebate for the purchase of a new EV during the tax year. It must be stressed that this is a rebate offset against tax payable. If there is no tax payable, the rebate falls away.

📖 Read More: How The EV Tax Credit Works

The qualification criteria are as follows:

• The battery capacity must be at least 7 kWh.
• The vehicle must weigh less than 14,000 pounds.
• The vehicle must be manufactured by a qualifying company (see list).
• The final assembly is done in North America.
• To qualify for the highest benefit level, the vehicle must be new.
• The vehicle must cost less than $80,000 (this includes vans, SUVs, and pickups) and $55,000 for other vehicles.
• The joint household income must be less than $300,000 ($150,000 for single filers).
• The earning limits on used EVs are $150,000 ($75,000 for single filers).

Currently, there is no end date published.

Federal Charger Station Subsidy

The Federal government has reinstated the federal tax credit for charger installation. Taxpayers may qualify for a rebate of 30% of the cost of installing an EV charging station (up to $1,000),

This benefit expires on 12/31/2032.

Arizona State Incentives

Arizona offers several benefits to EV drivers, as follows.

Alternative Fuel Vehicle (AFV) Parking Incentive

Alternatively, fueled vehicles (electric in this instance) may park in spaces reserved for carpool operators, and no penalty will be payable.

High Occupancy Vehicle (HOV) Lane Exemption

EVs fitted with an AFV (Alternative Fuel Vehicle) license plate may use the HOV lanes irrespective of the number of occupants.

This benefit does not apply to hybrid electric vehicles.

A lower Tax For EVs (AFV License Tax)

The license tax payable on EVs is based on a reduced value of the EV. When calculating the license tax, only 20% (1st year) and 15% (thereafter) of the manufacturer’s recommended retail price is used to calculate the license tax.

Each utility offers a variety of financial incentives and benefits, as listed below.

Solar System Installation Benefits

The federal government and Arizona provide substantial benefits to taxpayers installing solar systems.

The Federal Solar Installation Benefit

Installing a solar system capable of powering a level 2 recharger is part of the possible financial benefits of converting to an electric vehicle.

In addition to the 30% ($1,000 max) rebate to install an EV charger, the Federal government will also rebate 30% of the cost of a complete solar system installation. 

The benefit is available for all US residents who pay taxes, and it expires in 2035.

Arizona Solar Installation Benefit

Arizona offers substantial incentives for residents to install solar systems.

Arizona Solar Tax Rebate

Arizona will provide a tax credit (which stays in place for up to five years) equal to 25% of the system cost but limited to $1,000.

Net Metering Schemes

Each of the three electricity utilities will buy back unused electricity generated by solar systems. The rates offered are as follows:

Arizona Public Service (APS) – 9.4 cents/kWh

Tucson Electric Power (TEP) – 7.8 cents/kWh

Salt River Project (SRP) – 2.8 cents/kWh

Property Tax Reduction

Arizona will not charge property tax for the increased value a solar system creates on a property.

Sales Tax

NO sales tax is charged on solar energy equipment in Arizona.

How To Take Advantage Of Arizona’s Incentives for Electric Vehicles

All EV and Solar system tax credits are applied when the tax returns are completed and submitted.

For the current tax year, download Form 310 from the Arizona Department of Revenue’s website.

Complete the form as follows:

• Lines 1 through 9 are used to calculate the tax credit for the current tax year.
• Lines 10 through 15 are used to calculate the carryover credit from previous years (if applicable)
• Lines 16 through 18 are used to calculate the total available.

The department recommends using a certified public accountant (CPA) to help you obtain the full benefit.

The Benefits Of Arizona’s EV Incentives

The EV incentive benefits available to Arizona residents assist in the following manner:

• More parking is available to an EV driver.
• EV drivers can use the High Occupancy Vehicle Lane (HOV).
• Road tax is reduced for EV owners.
• Each of the electricity utilities has benefits relating to the installation of level 2 chargers as well as offering TOU price discounts.

The Economic Benefits Of Supporting The EV Market In Arizona

Arizona’s support for EV growth will achieve the following benefits:

• Reducing carbon emissions will result in a healthier, more productive population (fewer sick days absent).
• The average age (longevity) of the population will increase.
• Medical costs from emissions-related illnesses will reduce.
• The new technologies bring employment opportunities to the state.
• The new technologies bring a need for upskilling the existing workforce.

FAQs

How Much Does It Cost To Register A Tesla In Arizona? 

Arizona calculates the cost of registering a Tesla by using the recommended retail price and discounting this by 80%. A rate of $4 for every $100 in assessed value is the cost of the tax.

What Cars Qualify For HOV Lane In Arizona? 

All vehicles that run fully on alternative fuels (such as electricity, natural gas, and hydrogen) can travel in the HOV lane in Arizona.

The benefit does not apply to hybrid vehicles or plug-in hybrid electric vehicles that run on a combination of electric power and gas.

Key Takeaways

Arizona has progressive policies to incentivize switching to electric vehicles and solar power.

In addition to the Federal benefits, the following state benefits are available:

1️⃣ Vehicles pay a lower tax, can travel in HOV lanes, and park in areas reserved for carpool vehicles.
2️⃣ Arizona’s utility companies provide a range of benefits to EV owners.
3️⃣ If the owner switches to a solar system, substantial benefits will be realized.

📖 EV Incentives By State:
California’s EV Incentives & Rebates
Colorado’s EV Incentives
Florida’s EV Incentives & Rebates
Illinois’ EV Incentives & Rebates
Indiana’s EV Incentives
Michigan’s EV Incentives
Nevada’s EV Incentives & Rebates
New York’s EV Incentives
North Carolina’s EV Incentives & Rebates
Ohio’s EV Incentives & Rebates
Texas’ EV Incentives
Utah’s EV Incentives
Virginia EV incentives
Washington State’s EV Incentives