If You Live in Arizona, Here’s What You Need to Know About Solar Panels

Arizona is one of the top five states generating electricity from solar energy. Why does it rank so high? It might have something to do with its average seven hours of peak sunlight daily. If you live in the Grand Canyon State, solar panels may be worth the investment to save on your electricity bills. 

According to CNET’s corporate partner SaveOnEnergy, electricity rates in Arizona have increased by 3.5% from 2021 to 2022. In contrast, solar prices have decreased by 53% in the last 10 years. According to Energy Information Administration data, Arizona’s average monthly electricity bill is about $107.26. You could save $1,287 a year if you invest in a solar system that covers 100% of your home’s energy usage.

Arizona solar panel costs

The cost of solar systems in Arizona depends on many factors, including the number of panels needed to power your home, installation costs, permits and equipment like solar batteries. Arizona’s median size of solar systems is larger than the US median size, but the price per watt is less expensive. Here’s a look into the size and cost of solar systems in Arizona, based on the Tracking the Sun report from the Lawrence Berkeley National Laboratory. 

Typical solar installation costs in Arizona

System size (kW) Price per watt Total cost
High 11.4 $4.57 $52,043
Median 8.2 $3.76 $31,046
Low 5.8 $2.88 $16,613

Arizona vs. the whole US

System size (kW) Price per watt Total cost
Arizona 8.2  $3.76 $31,046
Nationwide 6.48  $3.82 $24,742

Solar financing options in Arizona

There are several ways to pay for solar panels in Arizona, including cash, power purchase agreements, solar loans or leases. Each option has its advantages and disadvantages. Explore the payment options to determine what works best for you.

  • Cash: No interest or loan fees, but greater upfront costs. You would be eligible to apply for the Residential Clean Energy Credit.
  • Power purchase agreement: Solar company owns and provides maintenance on the solar panels. You only pay for the energy used. Ineligible for solar tax credits and incentives.
  • Solar lease: Pay a fixed monthly price, but the company owns the panels. Ineligible for solar tax credits and incentives.
  • Solar loan: Easy to apply, not as expensive upfront, but can result in high-interest fees.

Paying with cash or solar loans provides a larger return on your investment because you pay upfront and can claim tax credits. PPAs and solar leases are best for those who do not have the upfront capital, do not qualify for loans or rent their home. Remember that solar leases and PPAs do not qualify for tax credits and other green energy incentives.


Advertiser Disclosure: CNET’s corporate partner, SaveOnEnergy, can help you find the right energy fit for your home. The SaveOnEnergy marketplace helps you search, compare, sign up and save on the right energy fit for your home — all for free. If you’re interested in solar, answer a few questions to get an exact price quote from our solar advisors.


Arizona solar panel incentives or rebates

While solar panels in Arizona can save you money on your monthly electricity bills, the upfront costs can be a deterrent. Thankfully, there are federal and state incentives to reduce the overall cost. 

The federal government offers the Residential Clean Energy Credit (formerly known as the Investment Tax Credit) as part of the Inflation Reduction Act. The tax credit provides 30% of the cost of a solar system purchased from the beginning of 2022 through 2032 as a credit on your federal income taxes. This credit could save you $9,313 on the median-size solar system in Arizona. 

The state of Arizona has additional state and local solar incentives. Find the list based on your ZIP code on the Database of State Incentives for Renewable and Efficiency. Here are a few to note:

Arizona solar incentives

Program Description
Net Billing Arizona residents can sell excess energy generated from their solar systems back to their electricity provider.
Residential Solar and Wind Energy Systems Tax Credit Receive 25% of the price of your solar system credited to your personal income taxes. The maximum credit is $1,000 and must be claimed in the same year as installation.
Solar and Wind Equipment Sales Tax Exemption A 100% sales tax exemption for retail sales of solar energy devices installed by contractors.

Arizona solar panel companies

There are nearly 300 solar companies in Arizona, including 138 installers. With so many options, we have come up with a list of a few top solar panel companies operating in Arizona.

ADT Solar

Previously known as Sunpro Solar, ADT Solar provides Arizona solar systems and battery installations. The company offers a free quote and has helped over 55,000 customers get solar power at home. ADT Solar predicts its panels will last up to 50 years and come with a 25-year warranty for the solar inverters and panels. 

ADT Solar handles the permit, inspection and installation processes to make it easy for you to sit back and enjoy the savings. With products from the Enphase system, like the IQ8 microinverter and solar battery, you can monitor your solar panels’ production and home consumption in the Enphase mobile app. 

Arizona Solar Wave & Energy

Founded in 1999, Arizona Solar Wave & Energy is a locally owned solar company operating in the Grand Canyon State. It provides services from designing to connecting your solar system with the utility company. The company’s solar systems come with a 25-year warranty. 

Arizona Solar Wave ensures its designs and installation plans are clear and simple, so you know what service to expect. It also provides free repair and maintenance for the lifespan of the system.

Palmetto Solar

As one of the largest solar companies in the US, Palmetto expanded its solar services to Arizona in 2021. The company believes everyone should have access to clean energy and the opportunity to positively affect the environment. It provides a free estimate for customers and a support team for questions throughout your solar journey. 

Palmetto uses top manufacturers for its solar products, such as black panels from Q Cells and REC Alpha, with a 25-year performance warranty. It also provides services to track your solar system’s performance through your Palmetto Solar account. 

SunPower Solar

As a leader in the solar industry, SunPower serves Arizona with affordable solar products backed by a 25-year system warranty. The SunPower Design Studio is a unique online tool to envision what solar could look like on your home. SunPower also provides a free online estimate and consultation to see how much money you can save.

SunPower offers financing options such as cash, solar lease or loans. Its system includes top solar products from manufacturers like Maxeon and Enphase.

Sun Valley Solar Solutions

Established in 2006, Sun Valley Solar Solutions is headquartered and operates in Arizona. It offers solar systems for residential and commercial buildings. Sun Valley Solar guides you through the entire process, from the roof inspection to powering your system. It works with you to provide the best fit for your budget and offers several financing options, including cash, loans, leases and home equity mortgages.

Sun Valley Solar Solutions includes a 10-year warranty for the quality of work and roof penetration. Its systems can also include solar batteries like the Tesla Powerwall and Generac PWRcell. Sun Valley has completed over 8,000 residential installations and has performed commercial installations for companies such as PepsiCo. 

Installation factors to examine

Setting up solar panels can cost thousands of dollars. Before saying yes to solar, there are a few things to consider.

  • Are you a homeowner? Homeowners can make solar decisions for their homes, but renters are typically not allowed to change the property without a landlord’s consent. There are still solar options for renters, such as community solar programs, where you subscribe to services like Arcadia and receive solar power from nearby panels.
  • Can you cover solar panels under your current home insurance? Check with your homeowner’s insurance company to ensure your policy covers solar panels.
  • Do you have an HOA or a neighborhood association? Arizona law states that an HOA may not prohibit the installation of solar panels. Check with your HOA or other neighborhood association before installation, as it may still have rules and regulations regarding solar devices. 
  • What is the condition of your roof? Consider the age, size, slope and tree cover of your roof. Older roofs may need maintenance before installing solar, which can be an added cost. The Department of Energy says solar panels work best on roofs sloped between 15 and 40 degrees and facing the south. Solar installers will assess your roof before installation.
  • Where is your home located? While solar panels still work in partially shaded areas, they benefit most from direct sunlight for at least four hours a day. If your solar system is shaded most of the day, it will not generate as much electricity for your home. 

Arizona solar power FAQs

Should I go solar in Arizona?

Yes. If you can, go solar to save money and power your home with green energy. Arizona is one of the sunniest states in the US, making it a prime place to try solar energy. Powering your home with solar energy can lead to thousands in savings on electricity bills. If you’re still on the fence about solar, review installation factors to consider and research potential tax credits and rebates to offset the cost of a solar system. 

What are the advantages of solar power in Arizona?

The advantages of solar energy include saving money on electricity, increasing your home’s value and using a renewable energy source. Systems connected to the grid can receive credits on electricity bills for excess energy generated by your solar panels. Installing solar panels can also increase the value of your home. Solar panels produce energy from a renewable source (the sun), whereas other energy sources like coal and fossil fuels are limited.

How much does a solar system cost?

Arizona’s median solar system cost is $31,046 before any incentives. The price can vary depending on size, equipment, installation and other factors. Many federal, state and local incentives exist to reduce overall costs. Solar companies in Arizona offer customers many financing options, including cash payments, loans and leases. They will work with you to determine the best plan and financing option for your budget.

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