Residential solar panels cost and savings in Arizona in 2022
Individual panel prices
Prices of DIY kits
Installed system prices
Arizona has the fifth-most installed solar PV capacity in the country at an impressive 5,644 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.
The cost of an installed residential solar system in Arizona is about $2.64 per watt before incentives. After claiming the 26% federal solar tax credit, the price is only $1.95 per watt. This puts the average cost of a 6-kilowatt (6 kW) system at $15,840 before incentives and $11,700 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.
If you pay federal income taxes, 26% of your solar system cost can be claimed as a deduction from your federal tax liability. Remember when filling out the paperwork that the credit is for 26% of the system cost after claiming other incentives.
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.
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 (IOUs) 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 fewer solar panels to reach the desired output.
Unfortunately, in December 2016 net metering was repealed by the Arizona Corporation Commission (ACC). In its place, Arizona adopted a system called net billing. While less generous, it still gives homeowners something close to retail rates for excess solar power they export to the grid.
In one analysis we performed, a Prescott, AZ home that installed solar panels could use net billing to reduce their monthly bill from $130 to $29.50 - a savings of $101 per month. By comparison, if there was full-retail net metering then the savings would be a bit higher, around $110 per month.
For an in-depth look at net billing in Arizona, check out our blog on the topic here.
APS, SRP, and TEP value your exported solar generation at an average of about 8-9 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.
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.
You can use our solar calculator below to see solar panel offers from top-rated solar companies in Arizona. Our calculator will also estimate the cost of solar panels, solar savings, and payback period for any location in Arizona; to use it, start by entering your zip code below.
For every 1 kW of solar panels installed on a south-facing roof in Arizona, you can expect to generate 1,752 kilowatt-hours (kWh) per year.
|System size||Annual energy production|
|4 kW||7,008 kWh|
|6 kW||10,512 kWh|
|8 kW||14,016 kWh|
|10 kW||17,520 kWh|
Learn more: How much power do solar panels produce?
The average 2,500-square-foot home in Arizona uses approximately 12,815 kWh of power per year. This means it would require a 7.31 kW solar system to cover its power needs.
If we assume the use of 300-watt (300 W) solar panels, then you will need approximately 25 panels to power your home. If using 400 W panels, only 19 panels would be required.
To find out what kind of solar panel system would be right for your home, you can enter your average 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 the best solar companies in your area.