Arizona solar panels: The complete guide in 2025
Data updated Jun 3, 2025
Looking to go solar in Arizona? On average, you'll need to install a 13.22 kW solar panel system to cover your electric bill—which costs about $18,926 after the federal tax credit.
Cost for an average system in Arizona
| Out of pocket cost, cash | $27,037 |
| Federal tax credit (30%) | - $8,111 |
| Price post tax credit | $18,926 |
| 25-year savings | Payback period | Electricity offset |
|---|---|---|
| $32,649 | 11 Years | 99% |
As long as your federal tax bill is high enough, you can take advantage of the federal investment tax credit (ITC).
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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 13.22 kW solar panel system to cover their electricity needs, which comes out to $27,037 before incentives. Prices range from $22,981 to $31,093, 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 35,000 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 10.97 years, while most systems last at least 25 years. You'll often see this number referenced as your solar payback period.
Solar panel systems are expensive, but there are ways to finance your investment and reduce upfront costs.
Cash purchase: You pay for your system outright, which typically provides the best long-term savings.
Solar loan: You pay for your system in monthly installments like a lease but maintain ownership like a cash purchase. Generally, the best solar loans are subsidized clean energy loans through local incentive programs. If you don’t have access to that, 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): You make monthly payments on your system like a loan, but a third-party company owns your system. You’ll either sign a solar lease or purchase the electricity the panels generate through a PPA. Third-party ownership models typically deliver the lowest savings and have earned some bad press. If you choose this financing option, read the fine print: You can get trapped in them for longer than you'd like.
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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) | $8,111 | 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 dropped in October 2023, but if you interconnected your solar panel system before then, you are locked into your current rate for 10 years.
Equipment
Equipment quality
The more efficient a solar panel is, the more power per square foot. As of 2025, the most popular solar panels have a rated output of 450 watts. To get the most out of your solar energy system, choose panels with at least that much power output.
Your solar inverter setup is also important consideration—make sure it suits your roof’s layout.
And if you’re interested in a solar battery, it’s best to choose one that integrates with that inverter.
The best equipment tends to be more expensive, but it will often save you more money in the end. Premium equipment often has the best warranty terms, guaranteeing 25-40 years of coverage for repairs, replacements, and the lowest degradation rates (meaning they’ll maintain more of their power output for longer).
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:
Ready to start looking for a solar installer?
Here are some of the most popular ones near you:
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resources
Top solar resources for Arizona
- Arizona Solar Loan Providers
Search through our list of top loan providers to finance your solar panel system.
- Arizona Commerce Authority
Learn about AZ renewable energy programs from the state government.
- Arizona Utilities Division
Read more about how utility companies work in AZ.
- Arizona Electricity Profile (EIA)
Learn about AZ energy production and prices.
- AZ State Solar Factsheet (SEIA)
See quick stats about how much solar energy has grown in AZ.
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