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Arizona · AZ

Solar Panels in Arizona:
Is It Worth It in 2026?

Arizona averages 1708.5 kWh per kWp per year with 6.5 peak sun hours per day. At 15.61¢/kWh, an 8 kW system saves roughly $2,134/year and pays back in about 7.1 years.

💡 Arizona averages 299+ sunny days per year and a 25% state solar tax credit — the best combination of sun and incentives in the US.

Arizona Solar at a Glance

Peak sun hours / day6.5 hrs
Avg solar yield1708.5 kWh/kWp/yr
Electricity rate15.61¢ / kWh
Avg payback (8 kW)7.1 years
Annual savings (8 kW)$2,134/yr
Net meteringFull retail net metering ✓

EIA data updated: April 11, 2026 · EIA, PVGIS v5.3

Solar Incentives in Arizona

Federal ITC
30%

The 30% federal solar tax credit (Section 25D) expired December 31, 2025. Cash and loan purchases no longer qualify. State incentives below still apply.

State Programs
Rebates & Exemptions

25% state income tax credit (up to $1,000/year), APS/SRP utility rebates, sales tax exempt

Total Savings
Varies

Utility rebates, exemptions, and net metering still apply. Federal ITC expired Dec 2025. Plus sales tax exemption. Property value increase is tax-exempt.

All Available Incentives in Arizona

Federal ITC (Section 25D) — Expired December 31, 2025 — no longer available for residential cash/loan
Sales Tax Exemption — Solar equipment is sales-tax exempt
Property Tax Exemption — Solar-added home value not taxed
Net Metering — Full retail net metering ✓

How Much Solar Power Do Arizona Cities Get?

Real PVGIS yield data and EIA electricity rates for all 9 cities. Click any city for detailed payback calculations.

Phoenix
1708.9 kWh/kWp · 7.1 yr payback
+12.2%
Tucson
1739.5 kWh/kWp · 7 yr payback
+14.2%
Mesa
1696.2 kWh/kWp · 7.1 yr payback
+11.4%
Chandler
1696.7 kWh/kWp · 7.1 yr payback
+11.4%
Scottsdale
1704.6 kWh/kWp · 7.1 yr payback
+11.9%
Gilbert
1697.4 kWh/kWp · 7.1 yr payback
+11.5%
Tempe
1697.2 kWh/kWp · 7.1 yr payback
+11.4%
Peoria
1704.7 kWh/kWp · 7.1 yr payback
+11.9%
Surprise
1731.5 kWh/kWp · 7 yr payback
+13.7%
Yuma
1804.6 kWh/kWp · 8.3 yr payback
+28.9%
Flagstaff
1855.5 kWh/kWp · 8.1 yr payback
+32.5%
Lake Havasu City
1794.2 kWh/kWp · 8.3 yr payback
+28.2%
Personalized estimate

Enter your monthly bill — get exact payback numbers for Arizona.

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All Arizona incentives

Full breakdown of credits, rebates, net metering, and SREC programs.

Incentives

Solar in Arizona: Frequently Asked Questions

What is Arizona's solar tax credit?
Arizona offers a 25% Residential Solar Energy Tax Credit on the cost of solar installation, up to $1,000 per year. If your credit exceeds $1,000, you can carry the remainder forward to future tax years. Combined with the 30% federal ITC, Arizona homeowners can offset 55% of their system cost through tax credits alone.
How much electricity do solar panels produce in Phoenix?
Phoenix is one of the best solar cities in the US. Each kW of solar installed produces approximately 1,794–1,850 kWh per year in Phoenix — about 18% above the US national average. An 8 kW system generates roughly 14,400–14,800 kWh annually, covering most or all of a typical home's electricity use.
What is the difference between APS and SRP net metering?
APS customers on a net metering plan earn retail-rate credits (~13¢/kWh) for exported solar energy for the first 10 years, then transition to a lower export rate. SRP (Salt River Project) uses a Customer Generation Credit of approximately 2.8¢/kWh for exports — significantly lower. SRP customers benefit most from solar sized for self-consumption, especially with battery storage.
Is solar worth it in Arizona?
Arizona is one of the top three states for solar ROI in the US. With 6.5 peak sun hours daily, a 25% state tax credit, and rising utility rates, the average payback period in Phoenix is just 5–6 years. Over 25 years, an 8 kW system can save $40,000–$60,000.

Going Solar in Arizona: Step by Step

From first quote to first kilowatt — here is the typical timeline for a residential solar installation in Arizona. Most homeowners complete this process in 6–12 weeks.

  1. 1
    Get 3 quotes

    Prices in Arizona average $22,400 for an 8 kW system before incentives. Getting three quotes typically saves 10–15%. Use the same system size so you can compare apples to apples.

  2. 2
    Review your electricity bill

    Your last 12 months of usage determines the right system size. At 15.61¢/kWh in Arizona, a system that offsets 90% of your bill hits the best cost-per-kWh sweet spot.

  3. 3
    Check state incentives

    Arizona does not have a statewide solar tax credit, but utility rebates and net metering may still apply. 25% state income tax credit (up to $1.

  4. 4
    Sign contract & apply for permits

    Your installer pulls the building permit and files interconnection paperwork with your utility. Permit approval in Arizona typically takes 1–4 weeks depending on your county.

  5. 5
    Installation day

    A standard 8 kW residential installation takes 1–2 days. Racking goes on first, then panels, then the inverter is wired to your main panel. The crew usually keeps the power on throughout.

  6. 6
    Utility inspection & interconnection

    After installation your utility inspects the system and approves grid connection. This final step can take 1–3 weeks. Once approved, your meter tracks both import and export.

Data summary for Arizona: Arizona averages 1708.5 kWh/kWp/year with 6.5 peak sun hours/day. Electricity costs 15.61¢/kWh. An 8 kW solar system saves ~$2,134/year and pays back in 7.1 years. 25% state income tax credit (up to $1,000/year), APS/SRP utility rebates, sales tax exempt.