Solar Panels in Arizona2026 Cost Guide & Incentives
Average cost, state incentives, payback estimates, and how to find certified installers in Arizona.
$16,000–$27,000
Avg system cost
$11,200–$18,900
After 30% ITC
6.5 hrs/day
Peak sun hours
$0.131/kWh
Avg rate
Is Solar Worth It in Arizona?
Based on a home with a $150/month electric bill in Arizona
Est. system size
5.3 kW
Gross cost
$15,452
Federal tax credit
−$4,636
State credit
−$1,000
Year-1 savings
$1,800
20-year savings
$45,911
Estimated payback: 5.5 years — then 14 years of free electricity.
* Estimates assume $2.90/W installed, 92% solar offset, and 3% annual electricity rate inflation. Get an installer quote to confirm your actual savings.
Arizona Solar Incentives & Policies
Federal
Investment Tax Credit (ITC)
30%
of total system cost — off your federal tax bill
Available through 2032
Arizona State
Arizona Solar Tax Credit
25%
Up to $1,000 off your state income taxes
Additional Arizona Solar Policies
Net Metering: Available — excess energy credited to your bill
Property Tax Exemption: Solar system value exempt from property taxes
Sales Tax Exemption: Solar equipment exempt from state sales tax
Solar Installation Cost in Arizona by System Size
| System size | Gross cost | After 30% ITC | Year-1 savings |
|---|---|---|---|
| 5 kW | $12,272,800 | $8,589,960 | $1,429,669/yr |
| 7 kW | $17,181,920 | $12,026,344 | $2,001,536/yr |
| 9 kW | $22,091,040 | $15,462,728 | $2,573,403/yr |
| 12 kW | $29,454,720 | $20,617,304 | $3,431,204/yr |
* Costs based on $2.90/W national average. Arizona installer pricing may vary ±15%.
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Frequently Asked Questions — Solar in Arizona
How much do solar panels cost in Arizona?
Solar installation in Arizona typically costs $16,000–$27,000 before incentives. After the 30% federal tax credit and Arizona's 25% state credit, most homeowners pay $11,200–$18,900 net.
Is solar worth it in Arizona?
Yes — Arizona homeowners benefit from 6.5 average peak sun hours per day. The 30% federal ITC combined with 25% state tax credit up to $1,000 + property & sales tax exemptions make the financial case strong for most homeowners.
What state incentives are available for solar in Arizona?
25% state tax credit up to $1,000 + property & sales tax exemptions. On top of state incentives, all Arizona homeowners qualify for the federal 30% Investment Tax Credit (ITC). Your solar system is also exempt from property tax assessment. Solar equipment is exempt from sales tax in ${s.name}.
How long is the payback period for solar in Arizona?
Based on Arizona's average electricity rate of $0.131/kWh and 6.5 peak sun hours, most homeowners see payback in 5.5–8 years. Systems then produce free electricity for 15–20+ more years.
Does Arizona have net metering?
Yes — Arizona has a net metering policy that credits your utility bill for excess electricity your system sends back to the grid. This significantly improves your ROI.