Arizona solar panels: The complete guide in 2024

Solar panels will save you a lot of money over time, but the upfront costs aren't cheap. The average Arizona homeowner needs a 12.89 kW solar panel system to cover their electricity needs, which comes out to $27,173 before incentives. Prices range from $23,097 to $31,249, 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 32,000 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 10.96 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.