Guide to Solar Panels in Arizona in 2023
How Much Do Solar Panels in Arizona Cost?
The exact cost and savings of your system may vary depending on several factors, including:
- The size of your system
- Your current energy usage
- Your current electricity rates
- Any incentives in your area
- The size and layout of your roof
- Preference of loan or cash financing
With Palmetto, the cost of solar panels in Arizona starts at $85 per month for a loan.1
4 Reasons Why It’s Worth Going Solar in Arizona
Mitigate OutagesAdd battery storage to your solar system and rely on clean energy if and when outages roll through.
Count On SavingsThe sun is relentlessly shining energy upon us. Solar panels take advantage of this by providing you with consistent, reliable power.
Lower Your FootprintUnlike fossil fuels, solar energy is both clean and renewable—a better solution for your home, your community, and the environment.
Increase Home ValuePlanning to sell? Solar-powered homes have been shown to stand out, earn more, and sell faster in the national real estate market.
Learn How Solar Works in Arizona
To get the most out of your solar energy system in Arizona, residents are considering battery storage with solar. Here’s why: The three largest utility companies, Arizona Public Service (APS), Tucson Electric Power (TEP), and Salt River Project (SRP) provide an export credit for solar energy not used immediately in your home. While this lowers your electricity bill, depending on the utility, the amount at which they buy your extra solar energy may be less than the rate the utility charges you for electricity.
Additionally, new homeowners installing solar in these three utilities in Arizona switch to time-of-use rates, a billing structure that charges you differently based on the time of day you use energy.
While this structure may seem complicated, Arizonans can still receive a great return on their investment thanks to excellent sun exposure and incentives. You simply have to be mindful about when you consume energy from the grid vs. your panels and/or battery storage device.
Available Solar Incentives in Arizona
Incentives help lower the cost of your solar energy system. Those available in Arizona include:
- The Federal ITC: Most solar energy installations are eligible for the federal tax credit—formally known as the Solar Investment Tax Credit (ITC), which allows you to deduct up to 26% of your solar system’s installation costs from your total tax liability for the year of purchase. Storage costs when paired with solar qualify for the ITC.
- State tax credit: Arizona residents purchasing solar can claim up to $1,000 as a deduction to state income taxes.
- State property tax exemption: Solar has been shown to increase the value of your home. Arizona exempts this addition from your property taxes, meaning you don’t pay extra taxes because you got solar panels.
- State sales tax exemption:Solar is exempt from Arizona’s sales tax.
Frequently Asked Questions
How does solar work with my utility provider in Arizona?
Palmetto will manage the solar interconnection application process with your utility. Once the system is installed, we will submit the required documentation. Your utility will grant Permission to Operate (PTO), and enable solar export credits on your bill.
What is net metering?
Net metering, or net energy metering (NEM) is a billing mechanism that enables you to send extra solar energy your solar panels generate beyond what your home can consume at the moment back into the electric grid. In return, you earn credit that you can use to offset the cost of electricity you pull from the grid in the future.
The value of the credit depends on how electricity rates and net metering policies are structured in your utility. In Arizona, the largest utilities offer an export credit.
- Arizona Public Service (APS): approximately 9.4 cents/kWh
- Tucson Electric Power (TEP): approximately 7.8 cents/kWh
- Salt River Project (SRP): approximately 2.8 cents/kWh
Learn more about net metering here
What are time-of-use rates?
All three of the major utilities in Arizona require customers installing solar to switch to a time-of-use (TOU) rate. This is a type of billing structure in which the amount you pay for electricity is based on the time of day when you use it. This method determines how you as the homeowner will be billed for your electricity usage.
In instances where TOU rates are active, the utility company will charge more for electricity when the demand for electricity is higher since they are spending more to meet the increased usage from all of the customers in their service area. Rates, subsequently, are lower during times of low demand, such as early mornings and nights, when the weather is cooler and people are winding down.
Learn more about TOU rates here
How long do solar panels last?
The first solar cells were manufactured by Bell Laboratories in the late 1950s and are still functional today. Likewise, panels installed on homes in the 1970s and ’80s continue to generate power. Most solar modules today have a 25-year power output warranty and may continue to produce power well beyond that point. Homeowners interested in additional protection and savings can enroll in Palmetto Protect and earn quick access to energy monitoring, dedicated customer support, exclusive discounts, and best-in-class maintenance services.
Where do I start? It seems complicated.
You're right, solar energy can feel very complex, especially if you're researching providers, technologies, incentives, municipal requirements, permits, the list goes on. That’s why Palmetto created end-to-end solar energy solutions allowing you to plug into savings with less time and no hassle. From financing and design to installation, production monitoring, and maintenance, our dedicated Customer Experience Team is here to answer questions, address concerns, and guide you through every step of the process. Visit our product pages to learn more about Palmetto’s solar and storage solutions.
Will solar panels work with my roof?
Before designing your custom solar solution, we’ll take a detailed survey of your property and assess the solar energy potential of your roof. Beyond the size, angle, and orientation of your roof, we’ll look at shading, estimated tree growth, materials, ventilation and drain pipes, and the overall condition. Because solar panel arrays can last 25-30 years without the need for repair or replacement, it’s important the roof beneath is in good shape. In some cases, it may be advisable to have your roof repaired or replaced entirely before the installation of solar panels can begin.
How much of my home can be powered by solar panels?
That depends on your overall household energy usage relative to the total capacity of your solar array. Many homeowners desire a system size producing 100% of their energy usage needs, but they may not always be possible. Alternatively, if you plan to change your behavior, such as by purchasing an electric vehicle, you may wish to go a little larger than historical usage.
How much does a solar power system cost?
The cost of your solar power system will vary based on a number of factors including your location, the size of your solar array, installation fees in your area, and if you desire energy storage for backup power. That said, solar technologies have never been more efficient or affordable.
Does my solar array come with a warranty?
What happens if I produce more solar power than I need?
Your home will still be connected to the electric grid so you have power when your system is not producing. Excess energy produced beyond what your home is using at any moment can flow back into the grid, and will earn you credit on your electricity bill. If you choose to integrate energy storage with your solar power system, any excess energy that is produced and not immediately used by your household will function to charge your battery. This, in turn, allows you to access stored solar power for your home when energy usage exceeds production, and provide valuable backup power during an outage.
Will I still receive an electric bill with solar panels?
Yes, almost all solar customers maintain a connection to the grid, even those with battery storage, which means you will still receive an electricity bill, though you can dramatically reduce the amount you pay each month thanks to the energy produced by your solar panels.
If there is a power outage, will my power go out?
- The size and production of your solar panels
- The size of the battery system
- The battery state of charge when the outage occurs
- The areas or appliances in your home that are prioritized to receive power when the grid goes down.