Summary of Arizona solar incentives 2021
Arizona is one of the sunniest states in the country. Just because of this fact alone, you can save a lot of money here with solar. Arizona’s renewable portfolio standards require utilities to generate a portion of their renewable output from distributed energy technologies -- 30% to be exact. Half of this requirement must be derived from residential installations.
Luckily for you, this requirement can be fulfilled by residential solar systems, but it is not limited to just solar panels. These conditions have created the right environment for utility companies in Arizona to offer residential solar incentives.
In addition to reading on to see what incentives you qualify for, use our calculator above to see how much you can save with solar.
On this page, you can:
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Learn what solar incentives are available to Arizona homeowners
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See what Arizona solar incentives you qualify for based on your utility company and city
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Find out how much these incentives and/or Arizona solar tax credits will reduce your cost to go solar and add batteries
Federal solar investment tax credit
The federal solar investment tax credit will have the biggest impact on the cost you will face to go solar in Arizona
This perk is commonly known as the ITC, short for “Investment Tax Credit”. If you install your photovoltaic system in 2020, the federal tax credit is 26% of the cost of your solar panel system. This is 26% off the entire cost of the system including equipment, labor and permitting.
Example: If your solar energy system costs $20,000, your federal solar tax credit would be $20,000 x 26% = $5,200.
The federal tax credit falls to 22% at the end of 2022.
Net energy metering in Arizona
With net metering in some states, you get full retail rate credit for the amount of electricity you send back into the grid with your solar panels.
Net metering policy lets you store the extra solar energy you produce and aren’t able to use at home with the utility. They then credit your bill at night when the sun ain’t shining. So, no batteries needed.
While Arizona’s net metering policy is not as strong as other states, you can still save quite a bit of money even with the extra fees on solar owners and reduced payments for your electricity that APS has successfully lobbied for.
There are a whole host of confusing solar rate plans offered by the three major utility companies here, which sound like they are an exceptional deal for solar owners. However, the average net metering rates for APS, SRP, and TEP are about $0.03/kWh, significantly less than your retail rates, but at least it’s something.
If anything, this low net metering rate encourages solar owners to store more energy onsite with home battery systems.
Arizona solar rebates
With its strong renewable portfolio standard, Arizona once had a great variety of solar panel rebate programs offered by nearly all the state's electric utilities. However, many of those generous solar panel rebate programs have been exhausted because utilities are getting close to meeting their requirements for off-site solar electricity production.
The good news is some rebates still exist for certain homeowners. The bad news is that they only exist for customers of a handful of rural electric co-ops. If you're a customer of any of the co-ops listed below, you're in luck.
Home energy storage rebate
SRP offers a battery storage incentive program that offers direct rebates to homeowners who install solar batteries. The current incentive offers $300 per kWh of storage, up to $3,600 maximum. At $300/kWh, this accounts for about half of the cost of the battery itself (not including installation).
At that price, home batteries begin to make a lot more sense, especially given their ability to eliminate your daily peak usage and reduce demand charges associated with net metering rates.
Arizona solar tax credit
Every resident in Arizona who installs solar panels gets a State Tax Credit of 25% of the total system cost, up to $1,000, to be used toward State income taxes.
That is a nice bonus to add to the 26% Federal Solar Tax Credit. There's no cap on the federal tax credit and it can be claimed over multiple years if necessary.
Solar sales and property tax exemptions in Arizona
Your solar installation will increase your property value by an average multiple of twenty times your annual electricity savings. In Arizona, that can amount to an average amount north of $30,000. Luckily, that home value increase is exempt from property tax assessments.
Moreover, solar equipment is also exempt from sales taxes. So on installation, you save more upfront.
Cost of solar panels in your part of Arizona after all applicable solar incentives
Solar prices near you
Payback period
7.3-8.9 years
Net profit (savings less system cost)
$35,212-$43,037
Average size system installed in AZ in 2021
8.3kW
Solar panel cost calculator
Best 10 solar companies in Arizona
69 solar companies in Arizona provide pricing on SolarReviews. Here are the best rated companies near you.
4.92 214 Reviews
Latest review
Jim Palmer, 4 days ago
After reviewing several companies I went with them for their honesty and information they provided up front. Their price was very competitive.
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Latest review
Jim Palmer, 4 days ago
After reviewing several companies I went with them for their honesty and information they provided up front. Their price was very competitive.
4.92 199 Reviews
Latest review
Pete, over 1 month
We chose Black Platinum Solar because of the price and because of the no-nonesense sales pitch provided by the owner. We gave him our APS bills for the previous two years. John calculated the system we should get and said he had configured it a little higher than our bill because people tend to consume more energy after getting solar. Since the system was installed in October of 2019 we haven't had to pay our energy company a dime. Last year we received about $100 back from APS and this year it looks like we will get ~$300 back. That is a lot better than the $524 bill we had in August 2019 which caused us to look into solar. We got estimates from about 7 companies and chose Black Platinum Solar because of their 5-star rating and their price, which included an upgrade to our electrical panel.
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Latest review
Pete, over 1 month
We chose Black Platinum Solar because of the price and because of the no-nonesense sales pitch provided by the owner. We gave him our APS bills for the previous two years. John calculated the system we should get and said he had configured it a little higher than our bill because people tend to consume more energy after getting solar. Since the system was installed in October of 2019 we haven't had to pay our energy company a dime. Last year we received about $100 back from APS and this year it looks like we will get ~$300 back. That is a lot better than the $524 bill we had in August 2019 which caused us to look into solar. We got estimates from about 7 companies and chose Black Platinum Solar because of their 5-star rating and their price, which included an upgrade to our electrical panel.
4.75 93 Reviews
Latest review
WoodArtist, over 1 month
All of the people at Sun Valley have been very helpful. All work hard to meet expectations. The utility was changing their solar policies so the sales person and engineer helped get the design in quickly before the deadline. Installers did a great job. I am in the mountains, a 2.5 hour drive from Sun Valley HQ. Yet they sent a person out to resolve some startup issues with SolarEdge. The weakness of for Sun Valley is not fully understanding the SolarEdge solution, and communication between sales, engineering, installers and support … plus SolarEdge. My installation involved adding panels to an existing system, new inverter (SolarEdge) and battery backup. In the sales process I asked a lot of questions (3rd solar install I have had done, most complex). But sales talked to engineering, and sales then got back to me (instead of me talking to engineering). Something got lost in translation … so the system I got was not exactly capable of what I thought. The installers know how to install and did a good job, but monitoring and such they were not familiar with … that is the service department. At the root of my concern is really the SolarEdge solution. My prior systems were SMA. SMA communicated with my home network and I had control of the inverter. With SolarEdge, it communicates to the SolarEdge server (the cloud) so both Sun Valley and myself need to work through SolarEdge. There are challenges for both of us. There are questions I still have about why SolarEdge is behaving the way it does and no one at Sun Valley has the answer … these are probably questions only SolarEdge can answer. The people at Sun Valley did a good job and I recommend them … but ask a lot of questions to make sure what you think you are getting is what you are getting.
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Latest review
WoodArtist, over 1 month
All of the people at Sun Valley have been very helpful. All work hard to meet expectations. The utility was changing their solar policies so the sales person and engineer helped get the design in quickly before the deadline. Installers did a great job. I am in the mountains, a 2.5 hour drive from Sun Valley HQ. Yet they sent a person out to resolve some startup issues with SolarEdge. The weakness of for Sun Valley is not fully understanding the SolarEdge solution, and communication between sales, engineering, installers and support … plus SolarEdge. My installation involved adding panels to an existing system, new inverter (SolarEdge) and battery backup. In the sales process I asked a lot of questions (3rd solar install I have had done, most complex). But sales talked to engineering, and sales then got back to me (instead of me talking to engineering). Something got lost in translation … so the system I got was not exactly capable of what I thought. The installers know how to install and did a good job, but monitoring and such they were not familiar with … that is the service department. At the root of my concern is really the SolarEdge solution. My prior systems were SMA. SMA communicated with my home network and I had control of the inverter. With SolarEdge, it communicates to the SolarEdge server (the cloud) so both Sun Valley and myself need to work through SolarEdge. There are challenges for both of us. There are questions I still have about why SolarEdge is behaving the way it does and no one at Sun Valley has the answer … these are probably questions only SolarEdge can answer. The people at Sun Valley did a good job and I recommend them … but ask a lot of questions to make sure what you think you are getting is what you are getting.
4.74 78 Reviews
Latest review
Outstanding, 1 week ago
They took all the guess work out. Once I made the decision (which was a no brainer) they handled everything from start to finish. From the HOA to the City permits to the final installation. I have complete confidence that I made the right decision!
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Average cost (5kW system)
$13,750 ($2.75 per watt)
Latest review
Outstanding, 1 week ago
They took all the guess work out. Once I made the decision (which was a no brainer) they handled everything from start to finish. From the HOA to the City permits to the final installation. I have complete confidence that I made the right decision!
4.72 65 Reviews
Latest review
Andrea Graham, over 1 month
Quick, responsive reply to request for bid. Competitive pricing. Good communicators, easy to work with and kept the process moving. Seamless process and great experience.
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Latest review
Andrea Graham, over 1 month
Quick, responsive reply to request for bid. Competitive pricing. Good communicators, easy to work with and kept the process moving. Seamless process and great experience.
4.66 62 Reviews
Latest review
Bourgery, over 1 month
Great company to deal with. Worked with us on the cost. Installation was quick and the crew did an awesome job. Didn't even know they were here. Product looks great on our roof.
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Latest review
Bourgery, over 1 month
Great company to deal with. Worked with us on the cost. Installation was quick and the crew did an awesome job. Didn't even know they were here. Product looks great on our roof.
4.62 57 Reviews
Latest review
Great Solar Install, over 1 month
I got quotes for solar install from 4 different companies, 2 of them the biggies in the industry, one out of N Phoenix area and Verde Solar Power. I went with Verde Solar Power because they use US made panels, their pricing was very attractive (I purchased the system), their install timeframe was reasonable and they were local. I was impressed with the installation crew. Those guys were professional, courteous, diligent, and safety conscious. At various times each one of them answered my many questions about solar technology and the install process.
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Average cost (5kW system)
$10,250 ($2.05 per watt)
Latest review
Great Solar Install, over 1 month
I got quotes for solar install from 4 different companies, 2 of them the biggies in the industry, one out of N Phoenix area and Verde Solar Power. I went with Verde Solar Power because they use US made panels, their pricing was very attractive (I purchased the system), their install timeframe was reasonable and they were local. I was impressed with the installation crew. Those guys were professional, courteous, diligent, and safety conscious. At various times each one of them answered my many questions about solar technology and the install process.
4.62 35 Reviews
Latest review
Timothy & Janice Carlton, over 1 month
(no comments provided)
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Latest review
Timothy & Janice Carlton, over 1 month
(no comments provided)
4.61 76 Reviews
Latest review
Liz, over 1 month
Dave is a professional. He is not only very knowledgeable about solar, but is an excellent communicator, honest and has a team of very hard working individuals. They are thorough, and respectful of your property. Dave returns emails and phone calls in a timely manner. I would highly recommend him. I interviewed several companies, and his company was by far the best.
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Latest review
Liz, over 1 month
Dave is a professional. He is not only very knowledgeable about solar, but is an excellent communicator, honest and has a team of very hard working individuals. They are thorough, and respectful of your property. Dave returns emails and phone calls in a timely manner. I would highly recommend him. I interviewed several companies, and his company was by far the best.
4.54 24 Reviews
Latest review
Richard & Joy Schroeder, over 1 month
Everyone at Ace was above and beyond our expectations. We are constantly amazed at how helpful and kind they are. They are gems.<br />
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Latest review
Richard & Joy Schroeder, over 1 month
Everyone at Ace was above and beyond our expectations. We are constantly amazed at how helpful and kind they are. They are gems.<br />
Solar guides for your Arizona city
For more information about going solar near where you live, check out the following resources:
Useful links
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