No state in the U.S. gets more sunshine than Arizona. And that’s one key reason why AZ is one of the best states to get solar panels for your home.
But it’s not the only reason to consider solar in Arizona. Great state and federal government solar rebate incentives and a big drop in solar panel pricing in the past 5 – 10 years can add up to huge savings for AZ homeowners.
Rising electricity costs are also impacting many Arizona homeowners decision to go solar, as they can save up to 70% on their monthly energy costs by going solar.
Plus, there are the environmental benefits of solar, the ability to be energy independent (if you get battery storage with your system) and the increase in home value that solar brings.
Solar Panels Arizona: A Guide For AZ Homeowners
But there’s a lot that goes into understanding whether solar makes sense for your home or not. You have to factor in all the options, costs, incentives, savings and more.
Below you’ll find an overview of the current state of solar in The Grand Canyon State. You’ll also find a resource for you to get all your questions about solar and your home answered.
How Much Do Solar Panels Cost in Arizona?
The estimated costs of solar are all over the place. But that’s because so many factors go into what solar will cost you.
- Your energy usage
- Your goals for solar (do you want to be totally off-grid vs. just reduce/eliminate your electric bills)
- How many solar panels you need
- The type of panels you get and their efficiency
- If you get battery storage and, if so, how many batteries you get
- What incentives and tax credits you are eligible for
- Whether you buy or lease and the financing options available
However, for an average size solar system for your home in Arizona, the costs are typically between $12,000 – $16,000. And the average cost per watt is between $2.49 – $2.67. These average costs are below average in the U.S.
Arizona Solar Incentives
There are a number of incentives available to Arizona homeowners that make going solar even more appealing. This is one of the reasons AZ is one of the top states for solar in the U.S.. Here’s an overview of the current incentives you may be able to take advantage of:
Net billing is similar to one of the best benefits you can get from solar… net metering.
Net metering is when the power company will pay you (at, or close to, full retail rate) for any excess electricity your solar panels produce. Basically, if your panels produce more electricity than you use, you sell that extra power back to the utility company.
It’s a great incentive that helps your panels pay for themselves even quicker. While Arizona does not currently have net metering, there is net billing. It is similar to net metering except you don’t get credit for your excess production at the full retail rate. It’s still a pretty sweet deal, though.
Sales Tax Exemption
The state sales tax rate in Arizona is 5.6%. That can add quite a bit to the final price when you’re talking about spending $12,000 – $15,000.
However, you don’t have to worry about it. In Arizona, solar panels have a sales tax exemption so that you won’t have any taxes added to the final cost of your solar panels.
Property Tax Exemption
A great benefit of solar is that it increases the value of your home. This is awesome, except when it comes to property taxes.
However, as with sales taxes, you don’t have to worry about this with solar. Because Arizona has a property tax exemption for solar panels. So any increase in your home’s value due to solar panels will not increase your property taxes.
There are a number of local incentives offered by either cities and/or utility companies in Arizona. However, a lot of these are no longer available because money for the programs has run out, or the utility companies hit their goals for the number of solar panels installed.
However, some customers of a handful of rural electric co-ops may still be able to get them. The best way to find out what may be available in your area is to talk to a solar advisor or local solar installer.
Arizona Solar Rebates
SRP has a battery storage incentive program that gives rebates to homeowners that install batteries. It’s a $300 per kWh of storage rebate with a cap of $3,600. But this rebate is going away in Feb of 2022, so you have to jump on this one soon to get in on it. –
Arizona Tax Credit
There is a state tax credit in Arizona for those who get solar panels. The credit is 25% of the cost of the panels with a maximum of up to $1,000.
Federal Solar Credit For Arizona Homeowners
A fantastic tax credit available to all Arizona homeowners is the federal solar tax credit. It is a 30% tax credit.
The 30% is good for all the costs associated with your project. This includes the panels themselves, labor costs, batteries and any other equipment needed for your installation. It can add up to $1000s in savings for homeowners.
It’s a dollar-for-dollar tax credit that works like this…
If the total cost of your solar installation is $15,000, then you would be eligible for a tax credit of $4,500 in the year your panels are installed. So if on that year’s taxes you owe the IRS $5,000, after the tax credit, you would only owe them $500. (If you don’t owe that much in taxes, the credit will roll over to the following year’s taxes.)
Are Solar Panels Worth It in Arizona?
So are solar panels worth it in Arizona? Well, when you take into account…
- The abundant sunshine
- High electricity bills
- The 30% federal tax credit
- Solar panel costs having dropped around 80% over the past 10 years
- The huge potential savings in electric cost
… the answer for many homeowners in Arizona, is a big YES!
Let’s dig in a little more here.
First, Arizona gets more sunshine than any other state, which is a huge plus for solar panels. Estimates show that solar panels in AZ can produce 70% – 180% MORE electricity than panels in other states.
When it comes to electricity costs, the rates per kWh of electricity in AZ are actually lower than the national average. However, due to the state’s hot climate, the average bill is higher than the national average at close to $130 per month.
Huge Potential Savings For Arizona Homeowners
What does all this mean for Arizona homeowners financially? Well, estimates show that the average Arizona homeowner can pay for their solar panels through the savings on their electric bill in about 7 – 9 years.
And, over 20 years, estimates are that you can see savings of between $25,000 – $40,000 by going solar and reducing/eliminating your electric bills.
If you own your own home, have an electric bill over $100/month, and your roof gets a decent amount of sunlight, solar is quite likely a no-brainer for you from a financial perspective.
And that doesn’t even consider the other benefits of going solar. Things like the increased value of your home, being able to achieve energy independence (if you get batteries) and the environmental benefits of solar.
Does Solar Makes Sense For You?
But solar isn’t the right choice for everyone. The amount of electricity you use, how much sunlight your roof gets (and the angle of your roof), the number of panels you can fit on your roof, and other things all go into the calculation of whether solar makes sense for you or not.
The only way to really see what your true actual upfront costs will be, what incentives you qualify for, if you can get a $0 down deal, what financing options are available, how much you can save and more is to get a personalized estimate from trusted, local solar installers.
One place we highly recommend you get an estimate from is UnderstandSolar. They’ve been around since 2014 and have helped over 400,000 people go solar.
They are the #1 Solar Advisor in the US and offer a great service that helps people understand their options and find exclusive deals on solar. Plus, they have partnerships with only the largest and most trustworthy solar installers in Arizona, so you know you’ll be working with a quality company if you do go solar.
You can get a solar savings estimate from them in less than a minute. Just enter your zip code below to get started, then complete the form on the UnderstandSolar site to get your savings estimate.
If You Don’t Act Very Soon, You Might Miss Out On a Golden Opportunity
If you even think solar may be worth it for you, now is the time to act. Because if you don’t, you may miss out on a golden opportunity to get truly big savings. The main reasons for this are…
- While solar panel prices have gone down a lot over the past 10 years, it looks like they are going back up very soon. This is because of material shortages, tariffs on imported panels and supply chain issues.
As already mentioned, the 26% Federal solar tax rebate drops to 22% in 2023 and goes away completely in 2024. If you miss out on this you could lose out on thousands in savings thanks to this very generous tax credit(This is no longer the case with the August 2022 passage of the Inflation Reduction Act, which increased the federal tax credit to 30% and extended it for 10 years.)
- Many local solar incentives for Arizona homeowners have already dried up, and more will soon go away. Like with the federal tax credit, if you don’t act soon, you may miss out on some significant savings
- The weather is only getting more extreme, and the power grid is only getting older. So more frequent and more prolonged power outages seem likely. If you get solar and batteries, then these won’t leave you in the dark. Also, these issues are helping to push the demand for solar and batteries which is leading to increased wait times for installation
- The longer you hold off, the more you miss out on saving money on your monthly electric bill.
It’s at least worth getting a savings estimate now to ensure you don’t lose out on these incentives and low prices on panels. Especially with the potential to save $25,000 – $40,000.
To see how much you can save with solar, get a savings estimate from a trustworthy local AZ solar installer. Get started by entering your zip below and then completing the form on UnderstandSolar’s site.
You may decide that solar doesn’t make sense to you after getting the numbers. But at least you’ll do so knowing you’ve made an informed decision.