Going solar in Arizona has never been more affordable. With powerful incentives, flexible financing options, and some of the nation’s strongest sunlight, homeowners and businesses can dramatically reduce their energy costs. But many people are unsure whether they should lease solar panels, choose LightReach (lease-to-own), or take advantage of the 40%+ solar tax credits and incentives available in 2025.

As one of Arizona’s oldest residential and commercial solar providers, PEP Energy created this guide to help you understand the differences and find the best option for your property.

What Is a Solar Lease?

A solar lease allows you to install a solar energy system on your home or business with little to no upfront cost. Instead of purchasing the system, you simply pay a fixed monthly amount to use the solar energy it produces.

What Is LightReach (Lease-to-Own)?

LightReach is a hybrid option between leasing and purchasing. You pay a fixed amount each month, but the system is designed to become yours at the end of the term.

It combines the affordability of leasing with the long-term ownership benefits of buying.

Why Choose LightReach?

Lower upfront cost than a full purchase
Ownership at the end of the agreement
Increased home equity
Eligibility for certain incentives depending on structure

Best For

Homeowners and businesses planning to stay long-term
Anyone who wants to maximize long-term savings
Customers who want ownership but need easier financing

Understanding the 40% Tax Credit for Solar in Arizona

Many customers see messaging about a “40% solar credit.” Here’s how it works:

1. 30% Federal Solar Investment Tax Credit (ITC)

All eligible homeowners and business owners who purchase their solar system can receive a 30% federal tax credit.

2. Arizona State Solar Incentives

While the main Arizona incentive is the Residential Solar Tax Credit (up to $1,000), businesses may qualify for additional depreciation benefits (MACRS), which can push total savings to 35–40% or more.

How Businesses Often Reach 40%+

30% Federal ITC
Bonus depreciation (MACRS)
State credits
Utility incentives (varies)

Important Note

You must own the system to claim the tax credits.
A lease typically does not allow you to claim tax credits, but LightReach and purchases do, depending on the agreement structure.

Lease vs LightReach vs Ownership: Which Is Best?

Option	Upfront Cost	Monthly Payment	Ownership	Eligible for Tax Credits	Best For
Lease	$0–Low	Yes	No	No	Customers wanting no upfront cost
LightReach	Low	Yes	Yes (after term)	Sometimes	Customers who want future ownership
Purchase	Higher	None	Yes	Yes	Max tax credits and long-term ROI

Why Arizona Homeowners and Businesses Are Switching to Solar

Solar is especially valuable in Arizona because:

It has some of the highest sun exposure in the country
Utility rates continue to rise
Solar incentives reduce costs dramatically
Solar increases property value

With the right financing structure, families and businesses can cut 20–60% of their energy costs.

How PEP Energy Helps You Choose the Best Option

PEP Energy is one of the oldest residential and commercial solar providers in Arizona. We offer:

Solar leasing
LightReach (lease-to-own)
Fully purchased systems
Panasonic high-efficiency panels
Battery storage options
Free solar cost and savings estimates

Our experts review your energy usage, tax credit eligibility, and financial goals to recommend the plan that gives you the highest return.

Frequently Asked Questions:

What is the difference between a solar lease and LightReach?

A solar lease gives you solar power for a fixed monthly fee without owning the system. LightReach is a lease-to-own option, allowing you to make monthly payments and eventually own the system at the end of the term.

Can I qualify for the 40% solar tax credit with a lease?

No. A traditional lease does not qualify because you do not own the system. You may qualify with LightReach or a full purchase depending on the agreement.

How does the 40% solar tax credit work in Arizona?

Arizona homeowners and businesses combine the 30% Federal ITC with state credits and commercial depreciation benefits, which can reduce the total cost by 35–40% or more.

Is leasing solar a good option in Arizona?

Yes. Leasing is ideal if you want little or no upfront cost, predictable monthly payments, and immediate savings without taking on system ownership or maintenance.

Who benefits most from LightReach solar financing?

LightReach is best for customers who want long-term ownership but need lower upfront costs. It provides long-term savings and potential eligibility for incentives depending on structure.