Is solar worth it in Arizona?
For a typical Arizona home in 2026, solar is worth it: about a 12.7-year payback and $11,955 saved over 25 years after paying for the system. Check your own home, because roofs, usage and utilities vary a lot.
- Payback, typical home
- 12.7 yrs3.6 kW, paying cash
- Electricity price
- 15.4¢per kWh, U.S. 18.0¢
- Solar production
- 1,763kWh per kW per year
- Exports credited at
- ~36%Net billing (reduced export credit)
The numbers for a typical Arizona home
| Electricity use | 1,046 kWh a month (Arizona average) |
|---|---|
| Best-value system | 3.6 kW, producing 6,346 kWh a year (51% of use) |
| Price | $11,060 at about $2.60/W; $10,060 after state incentives |
| First-year savings | $808 |
| Payback | 12.7 years |
| 25-year net | $11,955 (6.6% a year return) |
| Rate increase assumed | 2.3% a year, from Arizona's 2015–2025 history |
Paying cash, no federal credit, 5% discount rate, microinverters, $25 per kW a year for maintenance and repairs. Methodology.
Why it comes out this way
- Electricity costs 15.4¢ per kWh, close to the U.S. average of 18.0¢.
- Exported solar is typically credited at about 36% of retail, so systems pay best when sized for what you use yourself.
- A typical system here produces about 1,763 kWh per kW per year (ranked #2 of 51).
- There is no federal tax credit for homeowners who buy in 2026, which adds several years to payback compared with 2025.
Net metering and export rules in Arizona
Net billing (reduced export credit). For APS, TEP and UNS customers, electricity you use directly saves you the full retail rate, but power you send to the grid is credited at a lower 'export rate' that is locked for 10 years from when you connect. The export rate drops up to 10% each year for new customers; it is about 5.55 cents for APS (Sept 2026 tranche) and 4.62 cents for TEP (Oct 2026 tranche). SRP, a public utility, has its own solar price plans.
Resource Comparison Proxy (RCP) export rate, set annually by the ACC based on utility-scale solar costs, with reductions capped at 10% per year; customers lock their tranche's rate for 10 years.
- Netting: instantaneous
- Unused credits: Export credits are dollar bill credits that carry forward month to month; APS/TEP settle remaining credits annually per tariff.
- Fixed charges: APS grid access charge for post-2017 solar customers (~$2-3/month) was vacated by the Arizona Court of Appeals in June 2026; APS had proposed ~$6/month in its pending rate case. SRP moved all residential customers (including solar) to a tiered monthly service charge from the Nov 2025 billing cycle (most single-family homes $30/month) and requires solar customers to use specific plans (e.g., E-13, E-14, E-15 demand plan).
- Last major change: Aug 12, 2026: ACC approved APS RCP of $0.05554/kWh (10% cut) for the Sept 2026-Aug 2027 tranche; TEP RCP $0.0462/kWh effective Oct 1, 2026. June 2026: Court of Appeals vacated APS grid access charge.
- Pending: APS general rate case (~14% average increase, formula-rate proposal) pending; ACC vote expected around Dec 2026. ACC has also discussed revisiting the RCP methodology/10-year lock.
Read net metering explained to see why export rules can swing payback by years.
| Utility | Export credit | Notes |
|---|---|---|
| Arizona Public Service (APS) | 5.554¢/kWh | RCP $0.05554/kWh for systems interconnected Sept 1, 2026-Aug 31, 2027 (prior tranche $0.06171). Locked 10 years. Solar customers must take a TOU or demand plan (e.g., Saver Choice). |
| Tucson Electric Power (TEP) | 4.62¢/kWh | RCP $0.0462/kWh effective Oct 1, 2026-Sept 30, 2027 (prior $0.0513). Locked 10 years. |
| UNS Electric | 5.5¢/kWh | ACC cut RCP 10% to ~5.5 cents in Aug 2026. |
| Salt River Project (SRP) | 3¢/kWh | Not ACC-regulated. Solar customers must choose solar price plans (E-13 TOU export, E-14 TOU, E-15 average demand plan retiring Nov 2029). Exports credited at a low fixed/time-based export price (roughly 3 cents; one plan lists 3.45 cents); figure approximate. $30/month service charge tier for most homes. |
Solar incentives in Arizona
The federal 30% Residential Clean Energy Credit ended for systems installed after December 31, 2025. What that means.
| Program | Type | What you get | Status |
|---|---|---|---|
| Arizona Residential Solar Energy Credit | tax credit | 25% of the cost of a solar energy device on a residence, up to $1,000 per residence (unused credit carries forward up to 5 years). Eligibility: Arizona taxpayers who purchase (not lease) a system for their residence. | active |
| Solar equipment sales tax exemption | sales tax exemption | Retail sales of solar energy devices and installation by registered solar contractors are exempt from Arizona transaction privilege (sales) tax. Eligibility: Purchases from registered solar retailers/contractors. | active |
| Renewable energy equipment property tax exemption | property tax exemption | Solar energy devices are considered to add no value to the property for property tax assessment. Eligibility: Residential and commercial systems. | active |
What solar costs in Arizona
A fair cash price is around $2.60 per watt before incentives. For the 3.6 kW system that fits a typical home, expect roughly $8,000 to $11,200; smaller systems cost more per watt.
Public installation records (LBNL Tracking the Sun and state data, 23,823 owned systems since 2024) show a median of $3.57/W, with the middle half between $2.68 and $5.03. These prices include loan dealer fees, which is why cash quotes are often lower.
How many homes have solar
- Homes with net-metered solar (2025)
- 333,870
- Share of homes
- 10.4%
- Residential solar capacity
- 2,518 MW
- Growth over the past year
- +6.1%
- New systems with a battery
- 28%
- New systems leased or PPA
- 32%
Sources: EIA-861 (2025), EIA small-scale solar estimates, LBNL Tracking the Sun and state interconnection data.
Electric utilities in Arizona
| Utility | Homes served | Price (2026 est.) | Typical use | Typical-home verdict |
|---|---|---|---|---|
| Arizona Public Service (APS) | 1,287,097 | 17.2¢ | 966 kWh/mo | Worth it |
| Salt River Project (SRP) | 1,074,095 | 14.1¢ | 1,143 kWh/mo | Close call |
| Tucson Electric Power | 416,268 | 15.0¢ | 784 kWh/mo | Close call |
| UNS Electric | 95,288 | 17.2¢ | 849 kWh/mo | Worth it |
| Trico Electric Cooperative | 53,721 | 14.4¢ | 922 kWh/mo | Close call |
| Sulphur Springs Valley E C | 46,398 | 14.7¢ | 733 kWh/mo | Close call |
| Mohave Electric Cooperative | 41,741 | 11.4¢ | 913 kWh/mo | Not worth it |
| Navopache Electric Cooperative | 40,795 | 13.7¢ | 594 kWh/mo | Not worth it |
| Electrical Dist No3 Pinal County | 32,951 | 14.1¢ | 1,158 kWh/mo | Close call |
| Navajo Tribal Utility Authority | 26,978 | 16.6¢ | 501 kWh/mo | Close call |
| City of Mesa | 15,507 | 20.8¢ | 822 kWh/mo | Worth it |
| USBIA-San Carlos Project | 12,018 | 16.5¢ | 865 kWh/mo | Worth it |
| Electrical Dist No2 Pinal County | 5,592 | 13.4¢ | 981 kWh/mo | Close call |
| Dixie Escalante R E A | 2,821 | 9.5¢ | 1,309 kWh/mo | Not worth it |
| Garkane Energy Cooperative | 1,484 | 11.9¢ | 947 kWh/mo | Not worth it |
Solar by city in Arizona
- Phoenix11.7-yr payback · Worth it
- Tucson14.4-yr payback · Close call
- Mesa10.4-yr payback · Worth it
- Gilbert14.2-yr payback · Close call
- Chandler14.2-yr payback · Close call
- Glendale14.2-yr payback · Close call
- Scottsdale11.7-yr payback · Worth it
- Peoria11.7-yr payback · Worth it
- Tempe11.7-yr payback · Worth it
- Surprise11.5-yr payback · Worth it
- San Tan Valley14.1-yr payback · Close call
- Goodyear11.6-yr payback · Worth it
- Buckeye11.6-yr payback · Worth it
- Yuma11.3-yr payback · Worth it
- Avondale11.6-yr payback · Worth it
- Flagstaff12.3-yr payback · Worth it
- Casas Adobes14.4-yr payback · Close call
- Queen Creek10.8-yr payback · Worth it
- Maricopa11.8-yr payback · Worth it
- Casa Grande11.7-yr payback · Worth it
- Lake Havasu City12-yr payback · Worth it
- Marana11.7-yr payback · Worth it
- Catalina Foothills14.5-yr payback · Close call
- Prescott Valley11.8-yr payback · Worth it
- Oro Valley14.5-yr payback · Close call
- Prescott11.7-yr payback · Worth it
- Sierra Vista11.7-yr payback · Worth it
- Bullhead City12.1-yr payback · Worth it
- Apache Junction14.2-yr payback · Close call
- Sun City11.6-yr payback · Worth it
- San Luis11.4-yr payback · Worth it
- El Mirage11.6-yr payback · Worth it
- Sahuarita14.5-yr payback · Close call
- Kingman11.9-yr payback · Worth it
- Fortuna Foothills11.5-yr payback · Worth it
- Drexel Heights14.4-yr payback · Close call
- Sun City West11.6-yr payback · Worth it
- Florence11.7-yr payback · Worth it
Protect yourself when buying
- Check the license. Arizona Registrar of Contractors license; solar PV typically requires an electrical classification (R-11 residential, CR-11 dual) or a solar-specific classification. Verify exact classification on ROC. Look up an installer
- Cancellation rights. 3 business days to cancel many home-solicitation sales. A.R.S. 44-1762 (2018): standardized solar disclosure for sales/leases/PPAs; AZ Registrar of Contractors solar disclosure form. How to cancel
- HOA and solar access. Yes. A.R.S. 33-439 and 33-1816 bar HOAs/deed restrictions from prohibiting solar energy devices (reasonable placement rules allowed).
- Community solar. No statewide community solar program (ACC declined to adopt rules); limited utility programs only.
Installers active in Arizona
Ranked by installations in public records, not by payment. Volume isn't quality: always check licenses and reviews.
- Tesla Energy 52,718 installs
- Titan Solar Power 37,976 installs · bankrupt
- Sunrun 22,449 installs
- Freedom Forever 19,170 installs · bankrupt
- Our World Energy 14,941 installs
- Elevation 8,329 installs
- Sunvalley Solar Solutions 6,591 installs
- Fusion Power 6,268 installs
- American Solar Electric 5,153 installs
- Solar Topps 4,939 installs
- Sunsolar Solutions 4,772 installs
- Icon Power 4,551 installs
- Technicians For Sustainability 4,433 installs
- Harmon Electric 4,414 installs
- Sunny Energy 4,328 installs
Questions about solar in Arizona
Is solar worth it in Arizona in 2026?
For a typical Arizona home, solar is worth it. A 3.6 kW system costing about $10,060 after state incentives saves about $808 in the first year and pays back in about 12.7 years. Your result depends on your roof, usage, utility and price, so run the calculator for your address.
How much do solar panels cost in Arizona?
A reasonable cash price is around $2.60 per watt before incentives, or roughly $8,000 to $11,200 for a 3.6 kW system. Public installation records for Arizona show a recent median of $3.57/W, which often includes loan dealer fees.
Does Arizona have net metering?
For APS, TEP and UNS customers, electricity you use directly saves you the full retail rate, but power you send to the grid is credited at a lower 'export rate' that is locked for 10 years from when you connect. The export rate drops up to 10% each year for new customers; it is about 5.55 cents for APS (Sept 2026 tranche) and 4.62 cents for TEP (Oct 2026 tranche). SRP, a public utility, has its own solar price plans.
Is there a solar tax credit in Arizona?
The 30% federal credit for homeowners ended for systems installed after 2025. Arizona offers: Arizona Residential Solar Energy Credit. Solar may be exempt from property tax.
How do I check a solar installer's license in Arizona?
Arizona Registrar of Contractors license; solar PV typically requires an electrical classification (R-11 residential, CR-11 dual) or a solar-specific classification. Verify exact classification on ROC.. Look up any installer with the state's license search at https://roc.az.gov/contractor-search.
Policy research current as of October 2026; sources include tep.com, votesolar.org, solarpowerworldonline.com. Electricity data: EIA, through July 2026. Found something out of date? Tell us.