Noticing your energy bills rising? You’re not alone. According to the U.S. Bureau of Labor Statistics, energy costs have increased roughly 3% in Arizona over the last few years. Meanwhile, the Solar Energy Industries Association (SEIA) reports that the cost of solar energy equipment has dropped approximately 52% in the Grand Canyon State over the last decade. So it may be a good time for Arizona homeowners to make the switch to renewable energy. 

We analyzed the cost of solar panels in Arizona. We’ve also provided recommendations for the leading solar companies.

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Solar Panel Cost in Arizona

The average cost of solar panels in Arizona is $2.61 per watt, lower than the national average of $2.66. However, the total cost of a solar system in Arizona is roughly $4,500 more than the national average because the state has higher energy needs than most. Think about how hard your air conditioning works throughout those hot summer months. Costs can be reduced by taking advantage of Arizona’s solar incentives.

Multiple other factors affect the cost of solar panels in Arizona. Here are the most common:

• Sunlight exposure: The more sunlight your home receives, the greater your savings. Arizona is one of the sunniest states, so residents likely have high sun exposure unless their property is shaded.
• Household electrical use: Households that use more electricity require larger solar systems to power their homes, increasing costs. Electric appliances also use more energy than gas. 
• Panel type: There are three main types of solar panels: monocrystalline, polycrystalline, and thin-film. Monocrystalline panels yield better performance and efficiency but cost more. Polycrystalline panels are less efficient but more affordable. Thin-film panels are portable and flexible but offer the lowest efficiency rates, making them ideal for smaller solar projects such as an RV or shed.
• System size: A larger solar system costs more because it requires more equipment and labor.
• Panel quality: High-quality panels cost more, but they also typically last longer and generate more long-term savings.

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Average Costs by System Size

Your solar system size will depend on your budget, electric bill, and how much of your electric bill you’d like to offset with solar. The figures below are based on average electric bills and 100% electric bill offset and don’t include any solar tax credits or incentives. A solar installer can give you options after reviewing your electric bill.

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Factors That Affect Solar Installation Costs

Your solar panel installer will provide a quote including your total estimated cost. Here are some factors the installer will consider to calculate your price:

• Labor: Different project sizes and types require different labor. Solar providers also charge varying prices for labor. 
• Roof angle and type: Some roofing materials support panels better than others. Your roof may need additional materials, increasing costs. Likewise, if your roof isn’t already angled toward the sun, your installer will need to build scaffolding to angle your panels properly. 
• License costs: Different areas have different regulations around solar panel installation that affect how much installers have to pay for licensure and how long they have to wait for it. Some installers may change their prices based on these costs.
• Solar accessories: You can add electric vehicle (EV) chargers and solar batteries for backup power. These will increase your installation costs. Most major companies include monitoring systems for free with a solar installation.
• Tax incentives: Many state and local governments offer solar incentives that lower solar panel installation costs. See more on incentives below.

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How To Save on Your Solar Panel Installation

There are two primary ways to save money on solar panels in Arizona: the federal solar tax credit and the Arizona solar energy tax credit. These aren’t solar rebates but ways to reduce your tax bill.

Federal Solar Tax Credit

The federal government provides a tax credit equal to 30% of your solar installation costs. You can claim this credit on your federal taxes. This means that if you paid $26,100 for a 10 kW system, you’ll receive a credit of $7,830. If the amount of taxes you owe is less than the credit, it will roll over to the next year. The rate will drop to 26% in 2033 and 22% in 2034. It will end in 2035 unless Congress renews it.

Arizona Solar Tax Credit

Arizona also offers a residential solar energy tax credit that provides a tax credit equal to 25% of the system total or $1,000, whichever is lower. This gets deducted from your state taxes.

Arizona Net-Metering

Unfortunately, Arizona ended its net-metering program in 2016. This means excess energy your solar panel system generates is lost to your power company. However, you can install backup batteries to store excess power for use at night, on low-sunlight days, or during periods of high electricity rates. 

Outside of these options, make sure to get quotes from multiple companies to find the best deal. Balance quality with affordability and weigh high up-front costs against long-term savings. The cheapest panels won’t save you money long-term, while the most expensive ones don’t necessarily guarantee quality. Additionally, consider your financing options. For example, opting for a solar loan requires a lower up-front investment, but you’ll pay more for your system in total due to interest rates.

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3 Top Solar Installation Companies in Arizona

Installing solar panels isn’t a small investment. You want to ensure you work with the best solar company for your budget. Here are three solar providers we recommend based on their reputation and reviews. 

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Our Conclusion

There are more than 130 solar companies in Arizona, so you should be able to find one that suits your needs and budget. Assess whether your property and roof are a good fit for a solar system, research the types of solar panels available, and get multiple quotes from solar installers before making a decision. Also, look into tax incentives that can save you thousands of dollars on your solar installation.

Going solar requires a big up-front investment. It comes with significant long-term savings on your electric bill. It also reduces your environmental impact, increases your home value, and helps build a future toward sustainability. Use our tool below to find reputable solar installers that service your address.

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FAQ About Solar Panel Cost in Arizona

Is solar in Arizona worth it?

Solar in Arizona can definitely be worth it. Arizona is an exceptionally sunny state, and many properties are well-positioned to receive high sun exposure. Solar equipment is slightly more affordable in Arizona than in other areas of the country, though the total cost of a system is higher due to Arizona’s high energy demand. In time, you’ll still see a return on your investment. The average payback period is 6–10 years.

What is the downside to solar in AZ?

Depending on your property and system, your solar panels may not offset 100% of your electric bill. Most customers are connected to the grid and will still use grid electricity at night or when their system isn’t producing.

What is the average life span of a solar panel?

The average life span of a solar panel is 25–30 years.

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Our Rating Methodology

We are committed to providing comprehensive and unbiased reviews to our readers. After over a thousand hours of research on solar companies, interviews with experts, and common customer needs, we’ve created a detailed rating system for solar providers based on six factors:

• Solar equipment, installation, and services (25%)
• Warranty and performance guarantees (25%)
• Brand reputation and certifications (15%)
• Financing options (15%)
• Experience (10%)
• Availability (10%)

Total scores are divided by 20 for a final 5-point rating scale.

To share feedback or ask a question about this article, send a note to our Reviews team at reviews@thisoldhousereviews.com.