* Cost data based on quotes for fully-installed solar panel systems submitted on our platform. Prices are shown after applying the 26% federal tax credit.
Arizona has some of the best potential for solar in the United States. The state receives more sun than any other area in the nation, meaning a solar system can produce about 180% more than what it does in places like New York.
Policy changes and the reeling back of incentives has caused a bit of a challenge for solar in the state. Regardless, the federal solar tax credit and state-level tax credits combined with amazing sun coverage make going solar in Arizona a terrific option.
The average cost for an installed residential solar system in Arizona is currently $11,704 after claiming the 26% federal solar tax credit. This is $2.64 per watt. However, there is some variance in solar prices in different parts of the state. The graph below shows the average cost of installed solar systems in your part of the state.
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Prices based on a 5.8kW system, after 26% federal tax credit
Solar panels have fallen in price by more than 80% in the last ten years. In 2020 they also remain subsidized by the 26% federal tax credit and the net metering law, making them an excellent investment. They offer a return well above the long term average return from both the share market and also property investment.
Another way to look at this question is the levelized amount you will pay for each kWh of power you will use over the next 25 years with and without solar panels. As you can see below the savings are significant.
(forecast avg Arizona electric rates over the next 25 years)
The most significant incentive to install solar panels for homes and businesses in Arizona is the federal solar tax credit. At the end of 2020, the amount of the credit will decrease from 26% to 22% of the cost of the solar installation.
Because home and business owners want to get the largest incentive amount possible, solar panel installation companies will likely be flooded with new projects before year’s end. In order to maximize your savings potential, the best time to go solar in Arizona is now.
Not only do Arizona residents get to take advantage of the federal tax credit, but they can also receive the state’s solar energy credit. Arizona’s solar energy credit is equal to 25% of the costs of a solar system, up to $1,000. That is a significant amount of savings on your income taxes.
Arizona replaced full retail net metering with net billing in 2016. Net billing is similar to net metering, except that excess energy produced by a solar system is not credited at the full retail rate. So, if your system produces more electricity than you use, you will still be compensated for that excess generation, it will just be less than the retail rate.
The solar equipment sales tax exemption prevents the state’s sales and uses tax from being applied to solar energy equipment. It also prevents sales tax from being tacked onto renewable energy credits (RECs). The sales tax rate in Arizona is 5.6%, so this exemption saves you from having to spend a considerable amount of money.
Normally, installing a solar system on your property would increase property taxes. However, thanks to Arizona’s Energy Equipment Property Tax Exemption, solar systems add no value to your property when it comes to property tax assessments.
(After tax credit)
(After tax credit)
You will save most money by buying your solar system rather than leasing it. Read more about the pros and cons of leasing vs buying solar.
Minimum of 25 years but generally 30 or more
Solar panels power your house when they can but your home uses the utility company for power at other times. In 2021 "solar systems with battery storage" are becoming more popular. These are known as hybrid systems.
A grid-tied system is the most common type of solar system. It has no solar battery for backup power and utilizes net metering to maximize savings. Solar panels are mounted on your roof then wired together, and the power generated flows into an inverter where direct current (DC) electricity is converted into alternating current (AC) electricity. This electricity is either used by your home or is exported to the utility grid.
In hybrid solar systems, rooftop solar panels are connected to both a solar battery and the electric grid. The solar electricity generated by your panels that your home does not use is stored in the battery instead of being sent to the grid, which reduces your reliance on the utility while also providing backup power when needed. Battery storage is still expensive but you may be able to reduce costs by using state incentives.
Off-grid solar systems are not connected to the grid at all, so all of your energy needs must be met by the sun. There is no utility to fall back on. The solar installation needs to power your home not only during the day, but after dark as well, so many solar panels and a large battery system are required. These systems are often expensive and don’t make sense for homes that have access to the grid.
Read more about types of home solar systems.
No, but cleaning them can improve power generation if they are dirty.
Given this environment, and the effect of import tariffs placed on solar panels by the Trump administration during 2018, it is hard to see that solar power system prices in Arizona will fall during 2021.
Depending on the location, solar panels will generate different amounts of electricity.
A solar system that is installed on a south-facing 23.5-degree pitch roof Arizona will generate 1,752kWh of peak DC (direct current) capacity per year per 1kW in the Phoenix area.
Enter your details into the solar panel calculator to see how your location, roof tilt, and roof direction impacts solar panel production.
The advantages of installing solar panels include the federal tax credit and state tax credit. In addition to these incentives, Arizona receives the most sun in the US. This means that less panels are needed in order to completely wipe out your electric bill.
Disadvantages of installing solar panels in Arizona are the lack of state and utility solar incentives and the elimination of 1-for-1 net metering. However, the best time to switch to solar in Arizona is now - before the incentives that are in place run out.
This solar calculator requires you to input your address, utility company, your average monthly power spend - it tells you:
If you want to see all of the above but also see live pricing, the three best solar deals available in your city and get binding quotes from each of these solar companies then use this Arizona solar panels calculator. This calculator requires you to also input your name and contact details because most of our 200+ installer partners will only authorize the sharing of their live solar pricing where we have validated that you are a real homeowner with a home in their service area. We respect the privacy of your data and only share your contact details with the solar companies you ask us to get binding quotes from.
Note: Please keep in mind that the best source of up-to-date information on incentives are the solar installers who specialize in your area.
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An accurate breakdown of solar panel savings in Phoenix, Tucson and Flagstaff based on APS electric rates and the cost of solar panels being charged by the best local solar companies in Arizona.