Arizona solar panels: The complete guide in 2024

Data updated Jun 11, 2024

Written by: Emily Walker

Interested in going solar? You'll need to install a 12.39 kW solar panel system to cover the average electric bill in Arizona, which will cost you about $18,715 after the federal tax credit.

Cost for an average system in Arizona


Out of pocket cost, cash
$26,736
Federal tax credit (30%)
- $8,021
Price post tax credit
$18,715

20-year savings $20,599
Payback period 11 Years
Electricity offset 102%
Live data powered by

As long as your federal tax bill is high enough, you can take advantage of the federal investment tax credit (ITC).

Don't overpay for solar

Compare multiple offers and save up to 20%

Please enter a five-digit zip code.

Going solar in Arizona

Looking to power your home with clean, sustainable energy that’ll boost your energy independence? Arizona is the sunniest state in the United States, so installing solar panels makes a lot of sense: They'll reduce your carbon footprint and your reliance on the utility electric grid. 

Factor in the federal solar tax credit and Arizona's state tax credit, and Arizonans can cut the cost of solar by thousands of dollars, speeding up their payback period and increasing the value of their investment. 

Here's what you need to know about going solar in the Grand Canyon state.

Cost

How much do solar panels cost in Arizona?

Solar panels will save you a lot of money over time, but the upfront costs aren't cheap. The average Arizona homeowner needs a 12.39 kW solar panel system to cover their electricity needs, which comes out to $26,736 before incentives. Prices range from $22,726 to $30,746, 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 30,000 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 10.82 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.

Solar panels on a house

Incentives

What are the best solar rebates and incentives in Arizona?

Incentives help bring solar's price tag down considerably in Arizona. Here are the major ones to know about:

Incentive
Average savings in Arizona
Description

Residential Clean Energy Tax Credit, formerly the federal investment tax credit (ITC)

$8,021

Lowers your solar panel system's cost by 30%

Credit for Solar Energy Devices

$1,000

Lowers your solar panel system's cost by 25%, or up to $1,000

Arizona solar sales tax exemption

0.72% of your system's value, annually on average

If you use solar energy as a source of power, you won't need to pay tax on the value your solar panels add to your property.

Is net metering available in Arizona?

Arizona no longer offers a state-wide net metering program. Instead, utilities offer a reduced benefit known as net billing. Your credits will be worth the avoided cost rate––less than the retail rate––which means you won't save as much on your electric bills. The avoided cost rate is dropping in October 2023, but if you interconnect your solar panel system before then, you'll be locked into your current rate for 10 years. 

A house with rooftop solar panels connected to the grid

Equipment

Equipment quality

Each year, solar panels get more and more efficient—that is, they produce more power per square foot. As of 2024, the most popular solar panels can produce about 400 watts of electricity when they’re in full sunlight. If you want to make the most of your roof’s solar potential, get panels with at least that much power output.  

You should also make sure to select a solar inverter setup that makes sense for your roof’s layout. 

And if you want or need a solar battery, be sure to pick one that can integrate cleanly with that inverter. 

Premium equipment can come with a high price tag, but it will often save you more money in the long run. The best equipment tends to have the best warranty terms, often guaranteed to 25 years (sometimes even 40!), so you’re covered in case you need repairs or replacements. The highest-quality panels also degrade more slowly, so they’ll maintain more of their power output further into the future. 

See our list of the best solar panels

Companies

Who are the best solar installers in Arizona?

We pre-screen all of the solar companies on EnergySage to ensure they'll provide you with a high-quality installation. We then rate them based on their results, reputation, and responsiveness. Here are the highest-rated EnergySage installers in Arizona:

resources

Top solar resources for Arizona

Real homes. Real savings.

Helping customers make informed decisions since 2009.

Discover whole-home electrification
Home solar
rooftop solar icon

Create your own clean energy with solar panels.

Community solar
community solar icon

Enjoy the benefits of solar without rooftop panels.

Heating & cooling
Heat pump icon

Explore heat pumps, the latest in clean heating & cooling technology.