Federal rebates for gas-to-electric heating conversions have ended — but electric-to-heat-pump upgrades still qualify. What changed
Residential electricity in Arizona averages 15.32 cents per kilowatt-hour — 11% below the national average, and that helps anything that runs on electricity.
Prices pulled August 16, 2026
15.32¢
per kWh, residential electricity
11% below the national average of 17.3¢. 27th most expensive of 51.
Up 22% since 2021 (5.1% a year), against 27% nationally.
$1.79
per therm, residential natural gas
$18.58 per thousand cubic feet, 2025 annual. National average $1.48/therm.
Up 20% since 2021 (4.6% a year).
Heat pump vs. gas furnace — Heat pump favored
Arizona's electricity-to-gas price ratio works out at 2.5-to-1. At these prices a heat pump should cost less to run than a gas furnace across the heating season, before counting the air conditioning it also replaces.
Below roughly 3.5-to-1 a heat pump usually wins on running cost; above roughly 5-to-1 a furnace may be cheaper through winter. How that comparison works · run it with these rates
State averages from the U.S. Energy Information Administration (electricity, gas), pulled 2026-08-16. Real bills vary substantially by utility within a state, and by rate plan within a utility — check a recent bill for your own numbers before relying on any of this. The heat pump verdict above follows from these averages, so it moves if your rates differ.
Arizona is one of the states where a solar tax credit survives the end of the federal one. The Arizona Department of Revenue describes its Credit for Solar Energy Devices (Form 310) as a nonrefundable individual tax credit for someone who installs a solar energy device in their residence in Arizona.
Two words in that description do a lot of work. “Nonrefundable” means the credit can reduce your Arizona tax bill to zero but will not pay you anything beyond it — if your state liability is small, so is the benefit. And a credit is claimed on your return, not deducted from the installer's invoice, so you pay the full price up front and recover later. Ask a tax professional what it is actually worth in your situation before letting it into a payback calculation.
We have deliberately not quoted a percentage or a cap here. Those change, and the authoritative statement of them is the current year's Form 310 instructions on the Department of Revenue site — check them rather than an installer's summary.
On the equipment side, Arizona's electricity-to-gas ratio favors a heat pump, and in this climate the system is doing far more cooling than heating anyway — which is the case a heat pump wins most comfortably.
Check with the administrator before you sign anything. Program budgets run out, terms change without notice, and most require approval before work starts — a rebate you apply for afterwards is usually a rebate you don't get. Treat this page as a starting point for your own call, not as confirmation that you qualify. We last checked these programs on August 16, 2026.
Nonrefundable Arizona individual income tax credit for a solar energy device installed at your Arizona residence. Claimed on your state return; see the current Form 310 instructions for the rate and cap.
Program detailsEnded. No credit for expenditures made after 31 December 2025.
Ended. No credit for property placed in service after 31 December 2025.
Full detail, sources and changelog on the national incentive tracker.
Your own utility is worth checking separately — utility rebates are often the largest remaining incentive and rarely appear in any central listing.
Everything here is general information gathered from public sources. It is not tax, financial or engineering advice, and it cannot account for your utility, your income, your equipment or your return. Energy prices are state averages that move; program terms and budgets change without notice. Confirm anything you plan to budget around directly with the program administrator, your utility and a licensed professional before you commit money.
If you find something on this page that is out of date, tell us at minchangyi@me.com and we will correct it.
These open with Arizona's average rates already filled in. Correct them from a recent bill before you rely on the result — state averages hide a lot of variation between utilities.
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