Does Phoenix have the best solar in the US?

Yes. Phoenix has the highest solar yield of any major US city, producing approximately 1,709 kWh per kWp of installed capacity per year according to PVGIS satellite data. This is significantly higher than Los Angeles (1,622), Denver (1,554), or Houston (1,394).

What is the payback period for solar in Phoenix?

With Phoenix's exceptional yield of 1,709 kWh/kWp and Arizona's average electricity rate of 15.61¢/kWh, a 10 kW system has an estimated payback period of approximately 7.1 years after Arizona's $1,000 state tax credit (federal ITC expired Dec 31, 2025).

Which utility is better for solar in Phoenix — APS or SRP?

APS (Arizona Public Service) customers can apply for net metering under the Renewable Energy Credit (REC) program, with excess energy credited at avoided-cost rates (below retail). SRP (Salt River Project) uses a demand-charge rate structure that can make solar less financially attractive without a battery. APS is generally considered more solar-friendly than SRP.

Is it worth going solar in Phoenix without the federal tax credit?

Yes. Phoenix's combination of the highest solar yield in the US, Arizona's 25% state credit (up to $1,000), full property and sales tax exemptions, and competitive installer pricing makes solar economically compelling even without the federal ITC that expired in 2025.

Solar Panels Phoenix 2026: America's Sunniest City + Arizona Tax Credit Guide

Q: What is Arizona's solar tax credit?

Arizona offers a 25% state income tax credit on solar installations, up to a maximum of $1,000. This is in addition to any available federal incentives. Arizona also provides a full property tax exemption on the added home value from solar, and a sales tax exemption on solar purchases.

Last updated: April 2026 · Data sources: PVGIS, EIA, DSIRE, Arizona DOR

1,709 kWh/kWp

Annual Yield

Highest in US

15.61 ¢/kWh

Avg Rate

EIA 2025

7.1 years

Payback

After AZ credit

$2,134

Annual Savings

10 kW estimate

Phoenix is the solar capital of America. With 1,709 kWh per kWp of annual yield (source: PVGIS), no other major US city produces more solar energy per installed watt. Combine that with Arizona's generous 25% state tax credit, full property and sales tax exemptions, and a competitive installer market — and Phoenix solar makes compelling economic sense even in 2026, after the federal ITC expired.

APS vs SRP: Which Utility Is Better for Solar in Phoenix?

Phoenix is split between two major utilities: APS (Arizona Public Service) and SRP (Salt River Project). Your utility dramatically affects your solar economics.

Feature	APS	SRP
Net metering policy	Avoided-cost credits (below retail)	Demand-charge structure — less solar-friendly
Export credit rate	~6–9 ¢/kWh	Varies; often below avoided cost
Battery pairing benefit	Moderate	High — battery essential to avoid demand charges
Solar installer compatibility	Standard	Requires SRP-approved interconnection
Overall solar friendliness	⭐⭐⭐ Moderate	⭐⭐ Requires careful planning

Source: APS Solar Home Plans · SRP Solar Information

What Does Solar Cost in Phoenix in 2026?

Arizona has a highly competitive solar market with hundreds of installers. Pricing is typically slightly below the national average of $2.80/W (source: LBL Tracking the Sun).

System Size	Gross Cost	AZ Credit (25%, max $1k)	Net Cost	Annual Output	Payback
5 kW	$14,000	-$1,000	$13,000	8,545 kWh	8.3 yr
8 kW	$22,400	-$1,000	$21,400	13,672 kWh	8.1 yr
10 kW	$28,000	-$1,000	$27,000	17,090 kWh	7.1 yr
12 kW	$33,600	-$1,000	$32,600	20,508 kWh	7.7 yr

PVGIS yield 1,709 kWh/kWp · EIA rate 15.61¢/kWh · $2.80/W national avg · AZ state credit 25% up to $1,000 · No federal ITC (expired Dec 31, 2025).

Arizona Solar Incentives in 2026

Incentive	Status	Value
Federal ITC (Section 25D)	❌ Expired	Expired Dec 31, 2025
AZ Residential Solar Tax Credit	✅ Active	25% of cost, up to $1,000 (ARS §43-1083.01)
AZ Property Tax Exemption	✅ Active	100% of solar-added home value exempt
AZ Sales Tax Exemption	✅ Active	No state/local sales tax on solar equipment
APS Renewable Energy Incentive Program	Check APS	Verify current availability with APS

Source: DSIRE — Arizona solar incentives

Monthly Solar Output in Phoenix (10 kW System)

Month	Output (kWh)	Notes
January	1,310 kWh	Clear skies, short days
February	1,490 kWh	Increasing sun
March	1,780 kWh	Pre-summer ramp-up
April	1,890 kWh	Near peak — low heat losses
May	1,980 kWh	Excellent irradiance
June	1,950 kWh	Peak sun but high temps reduce efficiency slightly
July	1,720 kWh	Monsoon clouds + extreme heat
August	1,690 kWh	Continued monsoon season
September	1,770 kWh	Post-monsoon, improving
October	1,700 kWh	Great fall output
November	1,420 kWh	Shorter days
December	1,190 kWh	Lowest but still strong

Source: PVGIS — satellite irradiance for Phoenix (33.45°N, -112.07°W)

Phoenix Solar Market News (2026)

Stardust Solar expands Phoenix operations: Arizona-based Stardust Solar announced expanded capacity in the Phoenix metro to meet surging demand for residential rooftop installations. Phoenix's combination of incentives and irradiance continues to attract capital. AZ Central →
Arizona property and sales tax exemptions reaffirmed: Arizona's dual exemptions (no property tax on added solar value, no sales tax on equipment) remain in effect for 2026, making the state one of the most incentive-rich in the nation despite ITC expiration. DSIRE Arizona →
PVGIS confirms Phoenix as top US solar city: EU Joint Research Centre PVGIS data ranks Phoenix at 1,709 kWh/kWp — the highest of any major US metropolitan area, ahead of Tucson, Las Vegas, and Los Angeles. This translates directly into faster payback periods. PVGIS Tool →

Frequently Asked Questions: Solar in Phoenix

Does Phoenix have the best solar yield in the US?

Yes. Phoenix averages 1,709 kWh per kWp per year according to PVGIS satellite data — the highest of any major US city. For comparison, Los Angeles produces 1,622, Denver 1,554, Houston 1,394, and New York City 1,287 kWh/kWp.

What is Arizona's solar tax credit?

Arizona offers a 25% state income tax credit on the cost of a solar system, capped at $1,000. This is separate from any federal incentive. Arizona also offers a full property tax exemption on solar-added home value and no sales tax on solar equipment.

What is the payback for a 10 kW system in Phoenix?

A 10 kW system in Phoenix costs about $28,000 gross ($27,000 after Arizona's $1,000 credit). At 1,709 kWh/kWp yield and 15.61¢/kWh average rate, annual savings are approximately $2,134 — giving a payback of around 7.1 years with no federal ITC.

APS or SRP — which is better for solar?

APS is generally considered more solar-friendly. APS offers net metering with avoided-cost credits. SRP uses a demand-charge structure that can significantly reduce solar economics without battery storage. If you're in SRP territory, pairing solar with a battery is strongly recommended.

Is solar still worth it in Phoenix after the ITC expired?

Yes. Phoenix's unbeatable solar yield, Arizona's state credit (up to $1,000), property/sales tax exemptions, and competitive installer pricing make solar economically attractive even without the federal ITC. A 7–8 year payback on a 25-year system is still an excellent return.

Authoritative Sources

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