Solar Panel Cost in Arizona (2023 Local Savings Guide)

The table below includes average solar system costs and the home square footage that is often appropriate for that size.

How Does the Current Cost of Solar in Arizona Compare to the National Average?

As mentioned above, the average cost per watt for photovoltaic (PV) equipment in Arizona is around $2.61. This is just below the national average of $2.66, which means you get a bit more for your money in the Grand Canyon State.

However, the total price for solar power systems in Arizona hovers around $21,011 after the federal credit, which sits well above the national average of $16,758.

You’re likely to pay more for PV equipment in Arizona because the state has above-average energy needs, which demands a larger system to offset costs. Arizonans use an average of 1,048 kilowatt-hours (kWh) per month, as compared to the U.S. average of 886 kWh.¹ More energy usage means larger system requirements, which leads to higher solar conversion prices overall.

Watch Below: Does This AZ Homeowner’s Cost Savings Make Solar Worth It?

How Are Solar Costs Trending in Arizona?

The Solar Energy Industries Association (SEIA) has determined that the cost of PV equipment in Arizona has dropped by around 53% in the past decade.² Thanks to industry-wide advancements in solar technology, efficiency and panel production, a system that would have cost approximately $44,704 in Arizona 10 years ago will now total about $21,011.

According to the U.S. Bureau of Labor Statistics, energy costs over the past year alone have increased from an average of 14.9 cents per kWh to 15.3 cents in Arizona.³ So if you’re feeling the pinch, you’re not alone.

Although this 2.7% cost increase pales in comparison to the nationwide jump of around 15.5%, higher electricity rates can make a difference when considering the cost of living in Arizona. Not to mention, the electricity cost increase in Arizona the year before was closer to 6%.⁴

Not only have energy prices risen in the area over the past decade, but they’re expected to continue to go up. As access to fossil fuels becomes more and more scarce and more customers turn to clean energy, the burden of sticking with traditional energy sources will become ever higher.

The estimated cost of energy if you stick with fossil fuels in Arizona over the next 20 years — just short of the expected life of most solar panel systems — is around $53,906. Compared to the average savings of $23,891 of going solar for the same timeframe, converting to renewable energy is clearly the better financial decision.

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How Much Can You Save By Going Solar in Arizona Today?

If you convert to solar in Arizona today and pay cash for your system, you’re expected to save an average of $23,891 in utility bills over the lifespan of your system. This is after the panels provide enough savings to pay for themselves.

Keep in mind that these estimated savings are based on current energy prices. In reality, you’ll likely save more over time as electricity prices continue to go up.

The way you pay for your solar system also makes a big difference in your total costs over time. The three primary payment options are:

• Cash payment
• Solar financing
• Solar lease

The chart and sections below will provide information on how and when each of these payment options is beneficial.

*These are conservative estimates intended to represent base-level averages. In most cases, customers can see an even higher return on investment (ROI) and shorter payback timelines.

Cash Purchase of Solar System

Using cash to buy your solar PV system is the best option from a purely financial perspective. Paying upfront means you won’t add interest to your total payment, which means your long-term costs will be the lowest. In other words, paying with cash also means you’ll see the shortest payback timeline and the greatest overall energy savings.

Using cash also lets you take advantage of all the available incentives for solar equipment in Arizona, including the federal credit. This isn’t the case for all payment options.

Of course, buying your solar panel system with cash requires that you have the full amount upfront, which may be unrealistic for Arizona property owners. Keep in mind that the full amount — $30,015 on average — does not consider the federal tax credit. You can recuperate some of that money on your tax bill, but not until you file taxes for the year you install your system.

Using cash to buy your panels will, however, lead to instant savings on your monthly expenditure. Most customers can offset clost to their entire utility bills, which means you could go from paying the local average monthly electric bill of $131.35 to paying almost nothing.⁵

Below are some of the pros and cons of choosing a cash purchase to acquire your PV system in Arizona.

Pros of a Cash Purchase in Arizona

• Lowest overall price for your system
• You can take advantage of all solar incentives
• You don’t need good credit or a credit check
• Leads to the highest long-term savings
• Provides the shortest payback period

Cons of a Cash Purchase in Arizona

• Requires that you have the full amount in cash upfront

Taking Out a Solar Loan

If paying $30,000 in cash for your panels is not a realistic option, a solar loan may offer a more affordable way to obtain your solar system. Solar loans are financing deals made specifically for PV equipment, and the options available make going solar far more accessible, especially in Arizona, where system totals are above average. Plus, the required down payment is often $0.

Just like other loans, this payment method will lead to higher overall costs because you’ll be paying the principle of the loan plus interest. This also means your panel payback timeline will be a bit longer, and your overall savings will be around $5,000 lower than with a cash purchase.

Loan approval will require your financier to run a credit check, so loans also require that you have at least decent credit.

The good news is that many customers who opt for a loan see their monthly energy expenditure drop or remain the same. Many lenders can structure your deal so that your monthly payment is at or below what you currently pay for electricity — around $131.35 in Arizona.

Below are some of the most compelling upsides and downsides to using a loan to finance your solar system in Arizona.

Pros of a Solar Loan in Arizona

• Significantly lower upfront costs than cash purchases (sometimes $0)
• You can take advantage of all solar incentives in Arizona
• Leads to panel ownership
• Makes solar far more accessible

Cons of a Solar Loan in Arizona

• Loan interest will drive up the all-in system total
• Your payback period will be longer than with a cash purchase
• Lifetime savings will be decreased by how much interest you pay

Solar Lease

A solar lease is a different financial arrangement entirely, which doesn’t lead to panel ownership. Instead of paying to own, you lease the PV equipment from a solar energy company, and you get to use the electricity it produces to offset your electric bills. In most cases, your leasing company can make it so your monthly lease payment is at or below your current electric bill.

The major upside of leasing is that you typically won’t need to pay anything upfront. The arrangement does require a credit check, but solar customers who don’t qualify for loans will often qualify for leases.

There are some pretty substantial downsides to leasing, though. You’ll never own your panels, which means there is no payback timeline after which you will see a profit. Also, leases don’t let you take advantage of the federal credit, which is an average of $9,005 you’ll miss out on in Arizona.

Finally, leases save you the least amount of money over time. They’ll still provide an average of around $6,000 in lifetime energy savings, but this pales in comparison to the $23,891 you’d save if you paid in cash.

Below, we’ll include some benefits and drawbacks of choosing a lease to acquire your PV equipment in Arizona.

Pros of a Solar Lease in Arizona

• Usually requires no money down
• You never pay for repairs or maintenance
• You can support renewable energy without a large investment

Cons of a Solar Lease in Arizona

• Doesn’t lead to panel ownership
• Yields the lowest savings of any other form of payment
• Doesn’t let you take the federal credit

You can use this solar calculator to estimate your total expected savings based on your preferred payment method, average home size and location in Arizona.

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How Do You Get the Best Solar Prices in Arizona?

With average systems totaling just over $30,000 for solar PV systems, Arizonans understandably look for ways to save money in the conversion process. There are a few things you can do to keep your costs down, including:

• Filing for the federal investment tax credit
• Taking the Residential Solar Panel Tax Credit, available to all Arizona homeowners
• Consider installing a solar storage solution
• Get multiple solar quotes for your installation

In the sections below, we’ll include some information on these money-saving strategies and explain how each can help bring your total system price down.

File for the Federal Solar Tax Credit

One of the easiest and most efficient ways to bring down your total system costs is to file for the federal tax credit. This is a solar incentive offered by the federal government, and it is available to all Arizona residents.

The credit is for 30% of your total system cost, including panels, batteries, inverters and installation labor. In Arizona, this comes out to around $9,005. This amount gets credited to your income tax burden for the year you install your system. If you can’t take the entirety of the credit the year you install your panels, you can roll over any remaining credit to future tax bills for up to five years.

Keep in mind that the federal credit is not a rebate, but it can effectively save you money on your system by bringing down the amount you owe in taxes.

The credit is currently for 30%, but under the Inflation Reduction Act, will drop over the next decade according to the following schedule:

• The credit rate will be 30% for systems installed between 2022 and 2031
• The credit rate will drop to 26% in 2033
• The credit rate will drop to 22% in 2034
• The credit will no longer be available in 2035

Filling for the ITC is a breeze, too, which makes it even more appealing. You just need to fill out IRS form 5695 and file it with your taxes to take the credit.

Take the Residential Solar Energy Tax Credit

In addition to the federal credit, Arizona property owners can also take the Arizona Solar Tax Credit for PV equipment. The credit is for 25% of your system total or $1,000, whichever is lower. In Arizona, where the average system total is over $30,000, most residents can take the full $1,000.

This credit works similarly to the federal credit: it gets deducted from your tax liability rather than offered as a rebate.

Filing for this credit is also straightforward. Your solar installation company should be able to help you file.

Consider Installing Solar Batteries

Solar panels save you money when they offset your electric bills, so maximizing your energy savings is essential for making sure your investment in solar is worthwhile. In many states, a program called net metering helps you take full advantage of your energy production, even when your consumption outpaces your production.

Unfortunately, the Arizona Corporation Commission shut down the state’s net metering program in 2016. So unless you have batteries installed with your panels, all excess energy you generate will be lost to your power company.

For this reason, many Arizona residents are coupling their panels with batteries, like Tesla Powerwalls. These let you store your excess power production for use when your panels are under-producing, like on cloudy days or at night. Batteries are expensive, but they can maximize your long-term savings and end up being a great investment in Arizona.

Get Multiple Quotes for Your System

Finally, we recommend getting multiple quotes for your solar electric system. According to the SEIA, Arizona is home to over 130 solar companies.⁶ Each of these providers charges different prices for their labor and materials.

We suggest getting a quotes from at least three solar installers in your area and comparing the estimates based on overall cost, quality of the equipment and warranty coverage.

Higher-efficiency and more durable monocrystalline panels can cost more than lower-quality polycrystalline panels, but they’re also often worth the added investment.

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What Factors Affect the Average Cost of Solar Panel Systems in Arizona?

It’s not uncommon for the price of solar panels to fall between $16,000 and $28,000 in Arizona after the tax credit. There are a few factors that impact the average price range in your area, including:

• The equipment you install
• The financing option you choose
• The solar panel installer you hire for your home solar project

In the sections below, we’ll provide some insight into the role each factor plays in determining your total system price in Arizona.

The PV Equipment You Install

In large part, your solar equipment pricing will depend on the type of equipment you need and the panels you choose.

Arizona is the sunniest state in the country, with certain areas receiving 300-plus sunny days per year.⁷ In comparison to the national average of 205 sunny days per year, it’s easy to see why Arizona homeowners don’t need high-efficiency panels.

The panels that excel in low-sun conditions are often more costly than others, so the abundance and intensity of sunlight in Arizona can help save you money on solar equipment.

Arizona also doesn’t experience much extreme weather (aside from the heat), so the need for solar batteries is relatively low.

In other states, more homeowners opt for battery systems to store energy through power outages, but batteries are somewhat of a rarity in Arizona due to the mild weather. Again, this brings the overall average cost of going solar down because batteries and other add-on equipment tend to raise your costs.

With that being said, batteries can help you take advantage of excess energy production during Arizona’s long, sunny days. As such, batteries can sometimes pay for themselves in your area.

How You Pay for Your Panels

Although the cost of solar equipment on a per-watt basis in Arizona is lower than in many other states, your system will still be expensive, and how you choose to pay for it can add to the cost.

Most residents choose between cash purchases and solar loans. A cash purchase comes with a very large up-front cost but saves you the most over time. A solar loan requires little or no money down, but you’ll end up paying more — and saving less — because of the interest charges.

Arizona doesn’t have legislation that allows or promotes Property Assessed Clean Energy (PACE) programs to make financing solar more accessible and affordable.

However, Arizona Public Service (APS) does have a program for low-income households and solar communities, through which it will install solar for free and credit your electricity bill each month. The credit is minimal, but it’s a great way for low-income households to go solar without a massive up-front or long-term cost.

The Local Installer You Hire

The solar installer you choose for your system can also play a role in your total equipment cost. Just as with any other home improvement contractor, each installer can charge different labor fees and prices for equipment. Choosing panels and equipment from one installer could yield a different price than the same equipment from another installer.

There are many solar installers to choose from in Arizona, and it’s important that you assess each based on overall value and not just cost.

For example, SunPower, one of the most prominent national solar installers operating in Arizona, only installs Maxeon panels. These are some of the most expensive panels on the market, but they also provide the best efficiency, durability and warranty.

Sun Valley Solar Solutions and Elevation Solar, two other installers, offer other, less costly brands of equipment, including:

• Tesla
• REC
• SolarEdge
• Panasonic

All of these brands should suit you well, but it’s important to choose panels based on value, cost and budget to ensure you get the best value for your home.

Are There Any Maintenance Costs of Going Solar in Arizona?

While the initial cost of converting to solar can be high, the long-term cost is relatively low. Thankfully, PV equipment is generally maintenance-free, although there are some things you might need or want to do over the life of your panels.

One of the most common ongoing maintenance costs for solar panels is panel cleaning. Since your panels are constantly exposed to the elements, dust, dirt, pollen and other debris can accumulate on the surface. Any debris that blocks sunlight will cause your panel production — and overall energy generation — to drop, leading to slightly lower energy savings in some cases.

Unfortunately, this is a common issue in Arizona, where the average annual rainfall — which would normally keep panels clean — is well below the national average.⁸

It’s a good idea to keep an eye on your panel production, but even if you don’t see a drop, it might be worthwhile to schedule panel cleaning once every six months or so. This service typically costs between $50 and $125 in your area.

Some customers also find that panel removal services are necessary to carry out roof replacement or repair. This is a rarity, especially in Arizona.

The reputable solar installers in the Grand Canyon State should let you know if roof replacement is a good idea before installation. But, roof damage and roof leaks are rare in Arizona due to the lack of rainfall.

If you do need roof servicing, you could be looking at between $500 and $1,000 for removal and replacement.

Typical Costs of Solar Providers in Arizona

Since there are over 130 solar companies in Arizona, choosing one that suits your needs and carries the equipment you want shouldn’t be an issue. However, finding the best fit for your solar project and budget can still be challenging.

The chart below includes some of our top picks for the best solar installation companies in Arizona, plus comparative pricing to help you decide which of these you are likely to be able to afford.

Best National Provider

5/5

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Outstanding Local Installer

4.5/5

Offers products from leading manufacturersCompetitive pricingMany financing options

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Read More About Going Solar in Arizona

• Best Solar Installers for Your Home in Arizona
• Guide to Arizona Solar Benefit Programs
• Is Going Solar Worth It in Arizona?