Average cost of solar panels in Arizona: what to expect (2022)


Anyone who has spent time in the Southwestern United States, especially the Arizona deserts, wouldn’t be surprised if the region has some of the best natural solar resources in the country. But all the sun in the world won’t mean anything if the cost of solar panels in Arizona keeps renewables out of the reach of owners in Grand Canyon state.

From lowering energy bills to reducing the carbon footprint, going solar has many benefits. Either way, for most homeowners the change comes down to one key question: How much do solar panels cost in Arizona?

In this article, we’ll discuss the average cost of solar panels in Arizona along with key information about financing solar energy, public policies that can encourage solar installations, and more. If you want to see how much solar power would cost for your home, in particular, you’ll need to get a free quote from a solar installer near you. You can do this by using this tool or by filling out the form below.

How Much Do Solar Panels Cost in Arizona?

Solar panel costs in Arizona are roughly equivalent to the US average. Local factors and supply limitations do not hamper Arizona facilities or drive prices both ways. Based on market research and data from top solar companies, we found that the average cost of solar panels in Arizona is $ 2.61 per watt (the national average is $ 2.66 per watt).

Of course, solar systems can’t be bought one watt at a time, so what does that price look like in terms of actual installations? Using the state average, for a modestly sized 5 kilowatt (kW) system, the total system cost would be $ 13,050, but once the federal tax credit is applied, the refundable charge would be reduced to approximately $ 9,657.

For larger systems to be installed in homes, businesses, schools, or other facilities, the average solar energy costs break down as follows:

Solar panel system size

Arizona Solar Panel Cost

Cost after
Federal tax credit


$ 13,050

$ 9,657


$ 15,660

$ 11,588


$ 18,270

$ 13,520


$ 20,880

$ 15,451


$ 23,490

$ 17,383


$ 26,100

$ 19,314

The table above provides statewide average prices, but each home solar panel installation will have its own unique characteristics, so costs actually vary.

Some installations will be simpler (like those on a roof that easily faces the sun) while others will be more complicated (like an irregularly shaped roof or a ground system), so that the actual price of a project specific is best estimated with an installer who can consider your individual needs.

What Determines the Cost of Solar Panels in Arizona?

There are a number of factors that can influence the cost of solar panels in Arizona, including the extent of your home’s energy needs and the local incentives you are entitled to. Here are some other key things that will affect the prices:

Solar equipment

Not all solar energy systems are the same and the specific equipment chosen for your project will influence the final cost. Solar panels themselves are the subject of a lot of research and development, which means that the most efficient solar panels can generate greater amounts of electricity, but they come at a higher cost.

Likewise, the cost of items such as inverters, solar batteries, and mounting equipment needed to secure the panels to your roof will vary depending on the quality of the materials and the complexity of the installation. If you opt for additional features like rotating panels or smart technology, your investment will be even greater. These factors can all be discussed during a free consultation with a solar expert.

Solar financing

Regardless of the size and quality of the solar system being installed, the total will usually be relatively high initially. Due to these capital requirements, it is extremely common for customers to finance their solar systems. The type of financing used will not only impact what a customer pays up front, but it will also affect the length of the customer’s solar payback period, or the time it takes to “break even”. ”Of the investment.

Here’s how the three most common payment options can affect the cost of solar panels in Arizona:

  • Species: For homeowners with the capital available to cover the full cost of their solar system, it’s a good idea to pay the full amount up front. This is less common due to the aforementioned high price tag, but if achievable, it results in the lowest overall cost and thus shortens your payback period.
  • Loans: If you can’t or don’t want to pay in full, there is the option of taking out a simple loan to pay for the solar system. A solar loan may allow you to purchase a more expensive premium system, but of course the loans come with interest, and that extra cost will weigh on your repayment period.
  • Leases or power purchase contracts (PPA): Finally, potential solar energy customers may choose to work with a solar company that rents panels from homeowners. With this payment method, you don’t have to pay an upfront fee, but you don’t own the system either (and therefore you can’t take advantage of tax credits). In the long run, the amount you save on energy bills will be much lower, but you are also relieved of the burden of paying for the system yourself.

Installation company

A third factor that really impacts the cost of solar systems for Arizonans is the choice of installation company. The solar industry is booming and as such contractors and installers are sure to help you install your residential solar system.

As with any large home improvement project, different installers have their own rates, often correlated with the quality or even speed of their work, and it’s up to the customer to do their homework to assess potential installation companies. It might not be a good idea to choose the cheapest installation company if it is not reputable, but at the same time, local certified installers may charge lower prices to compete with large domestic installers. .

Our best advice is to research the best solar companies in Arizona, research any deals or specials available, and talk to neighbors or look at reviews online to find a company that offers you a good price and will provide you with the quality of work you need. .

Solar incentives in Arizona

Public policy makers have done a good job offering financial incentives that lower the cost of solar power in Arizona. Although the state’s net metering program was phased out in 2016, there are still a number of tax credits and incentives available to homeowners. These include:

Arizona Solar Incentive

How it affects the cost of solar panels in Arizona

Arizona Solar Tax Credit

This statewide program allows people who install solar power in their homes to be credited with 25% of the total installation costs (up to $ 1,000) in the form of a reduction personal income tax.

Solar tax exemptions

The 5.6% sales tax that is typically charged in Arizona does not apply to the purchase of solar equipment.

Likewise, most home improvements will increase the value of the home, and that value is what is taxed through property taxes. Arizona, however, excludes increasing the value of solar panels when assessing the amount of property tax you owe.

Local solar incentives

In addition to state incentives, many cities and counties may have their own incentives to encourage citizens to engage in solar power. Because these can vary widely from jurisdiction to jurisdiction, you should research your region (or call your local representatives) to find out more.

Federal solar tax credit

Anyone in the United States, including Arizona, can take advantage of the Federal Solar Investment Tax Credit, or ITC. For any solar system installed before the end of 2022, 26% of the cost of the system is available as an income tax credit.

FAQ: Cost of Solar Panels in Arizona

Is it worth going solar in Arizona?

Yes, it is generally worth going solar in Arizona. Solar panels are a great way to reduce utility bills and lower carbon emissions for your home or business. Depending on the size and cost of the system, customers who install solar power can expect a full return on investment decades before the system ends, turning additional savings into pure profit.

How long does it take for solar panels to pay for themselves in Arizona?

The average payback period for solar panels is around eight years and the average lifespan of a system is around 25 years. The payback period may be longer or shorter depending on the size of the facility, the tax incentives used and the total cost paid by the customer.

How many solar panels are needed to power a home in Arizona?

An average house needs around 20 to 25 solar panels to meet 100% of the energy needs. However, this figure will vary widely depending on the energy used by the house, the size and efficiency of the panels, the amount of shade falling on the panels from nearby buildings or trees, and others. factors.

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