Arizona solar panels: The complete guide in 2024
Data updated Nov 19, 2024
Interested in going solar? You'll need to install a 13.27 kW solar panel system to cover the average electric bill in Arizona, which will cost you about $18,827 after the federal tax credit.
Cost for an average system in Arizona
As long as your federal tax bill is high enough, you can take advantage of the federal investment tax credit (ITC).
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- Overview
- Solar cost
- Incentives
- Electricity cost
- Companies
Going solar in Arizona
Looking to power your home with clean, sustainable energy that’ll boost your energy independence? Arizona is the sunniest state in the United States, so installing solar panels makes a lot of sense: They'll reduce your carbon footprint and your reliance on the utility electric grid.
Factor in the federal solar tax credit and Arizona's state tax credit, and Arizonans can cut the cost of solar by thousands of dollars, speeding up their payback period and increasing the value of their investment.
Here's what you need to know about going solar in the Grand Canyon state.
Cost
How much do solar panels cost in Arizona?
Solar panels will save you a lot of money over time, but the upfront costs aren't cheap. The average Arizona homeowner needs a 13.27 kW solar panel system to cover their electricity needs, which comes out to $26,896 before incentives. Prices range from $22,862 to $30,930, but after the federal tax credit, that drops by 30%, and Arizona has some great local incentives as well.
While this may sound high, it will pay off in Arizona. That's why over 33,000 Arizona homeowners have used EnergySage to receive and compare quotes for solar installations. You can expect to earn back your initial solar investment through electricity savings in about 10.99 years, while most systems last at least 25 years. You'll often see this number referenced as your solar payback period.
There are a few ways to finance your solar panel system so you don't have to provide all that money upfront.
Cash purchase: You'll own the system and pay for it upfront. This provides the best long-term savings.
Solar loan: Allows you to retain ownership of your system, while owing little to no money upfront. Solar loans aren't all created equal: If you have access to subsidized clean energy loans through local incentive programs, that's usually your best bet. A home equity loan or a personal loan are often your next best options––private solar loans typically come with higher interest rates or upfront fees.
Solar lease or power purchase agreement (PPA): A third-party company owns your system and either leases you the solar panels (solar lease) or allows you to purchase the electricity they generate (PPA). These generally provide the lowest savings and generate the most negative press about solar. If you choose this financing option, read the fine print: You can get trapped in them for longer than you'd like.
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Incentives
What are the best solar rebates and incentives in Arizona?
Incentives help bring solar's price tag down considerably in Arizona. Here are the major ones to know about:
Incentive | Average savings in Arizona | Description |
|---|---|---|
Residential Clean Energy Tax Credit, formerly the federal investment tax credit (ITC) | $8,069 | Lowers your solar panel system's cost by 30% |
Credit for Solar Energy Devices | $1,000 | Lowers your solar panel system's cost by 25%, or up to $1,000 |
Arizona solar sales tax exemption | 0.72% of your system's value, annually on average | If you use solar energy as a source of power, you won't need to pay tax on the value your solar panels add to your property. |
Is net metering available in Arizona?
Arizona no longer offers a state-wide net metering program. Instead, utilities offer a reduced benefit known as net billing. Your credits will be worth the avoided cost rate––less than the retail rate––which means you won't save as much on your electric bills. The avoided cost rate is dropping in October 2023, but if you interconnect your solar panel system before then, you'll be locked into your current rate for 10 years.
Equipment
Equipment quality
Each year, solar panels get more and more efficient—that is, they produce more power per square foot. As of 2024, the most popular solar panels can produce about 400 watts of electricity when they’re in full sunlight. If you want to make the most of your roof’s solar potential, get panels with at least that much power output.
You should also make sure to select a solar inverter setup that makes sense for your roof’s layout.
And if you want or need a solar battery, be sure to pick one that can integrate cleanly with that inverter.
Premium equipment can come with a high price tag, but it will often save you more money in the long run. The best equipment tends to have the best warranty terms, often guaranteed to 25 years (sometimes even 40!), so you’re covered in case you need repairs or replacements. The highest-quality panels also degrade more slowly, so they’ll maintain more of their power output further into the future.
Companies
Who are the best solar installers in Arizona?
We pre-screen all of the solar companies on EnergySage to ensure they'll provide you with a high-quality installation. We then rate them based on their results, reputation, and responsiveness. Here are the highest-rated EnergySage installers in Arizona:
Ready to start looking for a solar installer?
Here are some of the most popular ones near you:
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resources
Top solar resources for Arizona
- Arizona Solar Loan Providers
Search through our list of top loan providers to finance your solar panel system.
- Arizona Commerce Authority
Learn about AZ renewable energy programs from the state government.
- Arizona Utilities Division
Read more about how utility companies work in AZ.
- Arizona Electricity Profile (EIA)
Learn about AZ energy production and prices.
- AZ State Solar Factsheet (SEIA)
See quick stats about how much solar energy has grown in AZ.
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