Residential solar panels cost and savings in Arizona in 2021


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Arizona has the fifth-most installed solar PV capacity in the country at an impressive 4,820 MW. This should come as no surprise; the immense amount of sunshine in the state makes the economics of going solar here hard to beat.

How much does a solar system cost in Arizona?

The cost of an installed residential solar system in Arizona is about $2.67 per watt before incentives. After claiming the 26% federal solar tax credit, the price is only $1.98 per watt. This puts the average cost of a 6kW system at $16,020 before incentives and $11,880 after claiming incentives.

There is little variance in cost between Phoenix, Flagstaff, and Tucson, as most of the best solar companies have offices in each city.

How does the 26% federal solar tax credit work?

If you pay federal income taxes, 26% of your solar system cost can be claimed as a deduction to your federal tax liability. Remember, when filling out the paperwork that the credit is for 26% of the system cost after claiming other incentives.

How much will Arizona’s state tax credit save me?

Unfortunately, the Arizona state tax credit expired on Jan 1, 2021. 

Prior to that, you could claim 25% of the cost of your solar system to be claimed as a deduction from your state taxes of up to $1,000.

Find out how much money solar incentives can save you in AZ

Why is Arizona such a strong market leader?

A significant reason for the growth of solar power in recent years is Arizona’s RPS law. RPS stands for Renewable Portfolio Standard and requires the state’s Investor Owned Utilities (IOU’s) to source 15% of their power from renewable sources by 2025. If they don’t do this they will receive large fines.

Arizona also receives more sunshine than any other state. Solar panels in Arizona produce about 70% more power than in states such as New York. An excellent solar output means that it takes less solar panels to reach the desired output.

Does Arizona have a net metering law?

Unfortunately in December 2016 net metering was repealed by the Arizona Corporation Commission (ACC) however, a replacement system was adopted that while less generous, still gives homeowners something close to retail rates for excess solar power they export to the grid.

This is known as a feed-in tariff rather than net metering.

How much is the excess energy from my solar system worth?

As of 2021, APS, SRP and TEP value your exported solar generation at an average of about 12.12 cents per kWh generated. 

While this isn’t as good as the 1-for-1 net metering available in many other states, high solar production rates in Arizona mean that you’ll still be able to significantly reduce your electric bill through your electricity exports.

Where can I find the best solar installers in Arizona?

Our site has thousands of reviews for Arizona solar installers and we also publish a list of the best rated solar companies in each city in Arizona.

Enter your zip code below to see how much solar can save you, the size solar system you need and local solar companies near you.

You can also estimate the cost of solar panels, solar savings, and payback period for any location in Arizona by entering your zip code into the solar calculator below.

See solar panel costs & savings for your home in Arizona

How much electricity do solar panels produce in Arizona?

For each 1kw of solar panels installed on a south-facing roof in Arizona, you can expect to generate 1,752kWh per year.

The table below shows how much electricity solar panels produce in Phoenix for each size of solar system

Size of System Annual kilowatt hours (kWh) of solar energy
4 kW solar system 7,008kWh
5 kW solar system 8,760kWh
6 kW solar system 10,512kWh
10 kW solar system 17,520kWh

Learn more: How much power do solar panels produce?

How many solar panels do I need to power my home in Arizona?

The average 2,500 square foot home in Arizona uses approximately 12,815 kWh of power per year. This means that the average home requires a 7.31 kW solar system to cover its power needs.

If we assume the use of 300-watt solar panels, then you will need approximately 25 solar panels to power your home.

How many square feet of roof space do I need for solar panels?

To find out how much solar panels cost in Arizona, you can enter your average APS or Salt River Project monthly power bill into the solar calculator below. It will show you how many solar panels you need, as well as how many square feet of roof space you will need for these panels. It will also show you current local solar deals being offered by some of the better solar companies in your area.

 - Author of Solar Reviews

Zeeshan Hyder

SolarReviews Blog Author

Zeeshan is passionate about promoting renewable energy and tackling climate change. He developed these interests while studying at beautiful Middlebury College, Vermont, which has a strong focus on sustainability. He has previously worked in the humanitarian sector — for Doctors Without Borders — and in communications and journalism.

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