Phoenix, AZ Solar Panels
In This Guide
Solar Power in Phoenix
Phoenix’s abundant sunshine can make solar appealing, but solar installation in Phoenix depends on more than clear skies. Roof age, shade, household electricity use, and your utility’s billing rules all affect how a home system may perform.
Arizona ranks third in the nation for residential solar installations. Explore our guide to home solar panels, then learn what to consider when planning a solar panel installation in Phoenix.
How Much Do Solar Panels Cost in Phoenix, AZ?
Based on Palmetto’s records of completed solar installations across Phoenix and nearby communities—including Mesa, Chandler, Gilbert, and Scottsdale—this calculator estimates what solar may cost for a home like yours. It uses real local project data to give you a clearer starting point for exploring your options.
System
- No upfront investment
- Palmetto handles all maintenance
- 90% Production Guarantee
- Comprehensive protection program included
Key Takeaways
- Phoenix sunshine is a strong starting point, but roof condition, shade, electricity use, and utility billing rules all affect solar performance.
- A local 8.2 kW system estimate is about $22,405 after a $1,000 state incentive, with projected 25-year savings of $63,153; actual results vary.
- Arizona offers state solar tax and property-tax benefits, while credits for extra electricity vary by utility and plan—check APS or SRP rules.
Phoenix Electricity Prices
Phoenix electricity rates have climbed in recent years, making it useful to understand what drives household bills—and how rooftop solar may fit in.
Arizona’s average electricity price rose from 12.5¢ per kWh in 2021 to 14.9¢ in 2024—an increase of 2.4¢ per kWh, or about 19%.
A home solar system can generate electricity on-site, potentially reducing how much power a household buys from its utility. The effect on bills depends on system size, usage, and utility compensation rules.
Because panels can produce power for many years, solar may help limit exposure to future rate increases. Actual long-term value depends on upfront costs, maintenance, financing, and utility rates.
Price of Energy: Arizona vs National Average
Phoenix Area Utility Providers
Phoenix homes are generally served by Arizona Public Service (APS) or Salt River Project (SRP). The latest figures available here are from 2023: APS averaged 15.3¢ per kilowatt-hour, while SRP averaged 12.5¢.
In 2023, Arizona’s average was 14.0¢ per kWh and the U.S. average was 16.0¢. APS was above the state average but below the national one; SRP was below both. The gap reflects utility-specific electricity pricing.
These rates offer context for considering solar: generating some electricity at home may reduce the amount purchased from a utility. The effect depends on a household’s usage and utility plan, so the 2023 averages are a starting point, not a bill estimate.
Phoenix Utilities Electricity Rates
Arizona Solar Incentives
Phoenix homeowners may find Arizona and utility incentives that help offset solar costs. See the available solar incentives in Arizona.
Arizona options include a state income-tax credit, qualifying sales-tax treatment, and a property-valuation exclusion for on-site solar. Export credits vary by utility and tariff; APS and TEP also offer eligible battery rewards.
Although the federal 30% residential tax credit has been eliminated, Arizona and utility programs remain. With LightReach leasing, Palmetto handles the commercial ITC and passes savings through lower monthly payments.
| Incentive | Type | Description | Source |
|---|---|---|---|
| Arizona Credit for Solar Energy Devices (Form 310) | State Income-Tax Credit | Arizona residents may claim a credit of 25% of qualifying solar-device costs, up to $1,000 per residence, with unused credit generally carried forward for up to five consecutive years. | Learn More |
| Arizona Solar-Equipment Transaction Privilege Tax (TPT) Treatment | Sales-Tax Exemption / Deduction | The qualifying retail sale of a solar energy device may be excluded from the applicable Arizona TPT tax base when sold through a properly registered solar-energy retailer. | Learn More |
| Arizona Property Valuation Treatment for On-Site Solar | Property-Tax Valuation Exclusion | Qualifying on-site solar energy equipment is treated as adding no value to the property for appraisal purposes, reducing the risk that the solar system increases assessed property value. | Learn More |
| Arizona Solar Export Compensation and Interconnection Tariffs | Net Billing / Net Metering / Export Compensation | Arizona has no single statewide solar export rate; bill credits and compensation depend on the customer’s utility, rate plan, tariff, and sometimes interconnection history. | Learn More |
| APS Storage Rewards Pilot | Battery Demand-Response Reward | Eligible APS residential customers can earn $110 per average kilowatt of battery contribution for the May–October season through performance-based conservation-event rewards. | Learn More |
An Arizona resident who is not claimed as another taxpayer’s dependent may claim a credit equal to 25% of the cost of a qualifying solar energy device installed at the resident’s Arizona home, up to a maximum of $1,000. The $1,000 limit is cumulative for the same residence, rather than a new limit for each system.
Claim the credit using Arizona Form 310 and Form 301. Unused credit may generally be carried forward for up to five consecutive tax years. A solar system that includes storage may qualify, but a stand-alone battery is not clearly covered; check the current instructions or consult ADOR or a tax professional. See ADOR Form 310 information and A.R.S. § 43-1083.
Arizona law provides favorable TPT treatment for qualifying retail sales of solar energy devices. The practical benefit is potential avoidance of applicable transaction privilege tax on the qualifying equipment purchase; the exact tax treatment depends on the transaction and the retailer’s status.
This is not a blanket exemption for every installation, labor, or contracting charge. Confirm that the seller is registered as required and ask how the exemption is reflected on your invoice. See A.R.S. § 42-5061 and ADOR contracting guidance.
Arizona law provides that qualifying on-site solar equipment is considered to add no value to the property for appraisal purposes. This can help prevent a qualifying solar installation from increasing the property’s assessed value and resulting property-tax valuation.
This is a valuation rule, not a cash rebate or a direct reduction in the home’s existing assessed value. The law covers specified solar devices and grid-tied photovoltaic systems primarily used to produce energy for on-site consumption; do not assume a stand-alone battery receives the same treatment. See A.R.S. § 42-11054.
Arizona homeowners should check their utility’s current tariff before sizing a solar system: export compensation is utility- and plan-specific, and new customers generally should not assume they will receive retail-rate net metering. APS describes Resource Comparison Proxy (RCP) net-billing arrangements that credit excess generation at an applicable purchase rate; qualifying legacy customers may have different terms. SRP uses its own price plans, which can include within-billing-cycle netting or fixed export credits.
SRP also has a separate Renewable Export Program for qualifying facilities of 100 kW AC or less. It may offer a capacity credit for customers who enroll under the program and commit to delivering capacity during an eligible period; it is not an automatic credit for every solar customer. Check the current terms, rates, interconnection requirements, and enrollment status directly with your utility: APS renewable riders, SRP solar plan comparison, and SRP Renewable Export Program.
APS states that participants can earn $110 per average kW their battery provides during the season. For example, an average contribution of 3 kW would earn $330 for the season. This is a performance-based reward, not an upfront battery-purchase rebate.
Applicants must be APS residential rate-plan customers, have an APS-approved battery and permission to operate, and meet the program’s equipment and enrollment requirements. Events take place during the May–October season, and customers may opt out of individual events. Batteries without solar may qualify. Confirm current equipment eligibility and program terms with APS Storage Rewards.
Ready to start saving with solar?
Speak with a Palmetto solar expert to find out exactly how much you can save with Arizona incentives.
Get a Free QuotePhoenix Solar Irradiance
Solar panel production varies throughout the year based on daylight hours, weather patterns, and sun intensity. Understanding how seasons affect your solar system helps set realistic expectations for your investment.
Phoenix’s abundant sunshine supports solar production, while summer heat, monsoon clouds, dust, and seasonal sun angles can affect monthly output. A well-designed system can account for these conditions.
Solar Production in Phoenix by Month
What Can Your Solar System Power?
Summer Production (July)
In July, your 10 kW system could power:
- 3.6 average homes (15 kWh/day per home)
- or Run central AC for 18 hours AND power all other appliances
- or Fully charge 5.4 Tesla Model 3 electric vehicles
Winter Production (December)
In December, your 10 kW system could power:
- 2 average homes (15 kWh/day per home)
- or Keep your home heating system running for 15 hours
- or Fully charge 3 Tesla Model 3 electric vehicles
Annual Production
Over a year, your 10 kW system could:
- Offset 10 tons of carbon dioxide emissions
- or Equal the environmental benefit of planting 175 trees
- or Save approximately $4,234 in electricity costs
Want to know exactly how much solar can power your home?
Get a personalized solar analysis based on your actual home, energy usage, and roof characteristics.
Get My Custom EstimateSolar Panel Systems in Phoenix
We’ve organized solar installation data from across the U.S. into this interactive map of Phoenix. Explore the hexagons to see how many solar installations are in each area and discover neighborhoods and communities where residents have made the switch.
How to Choose a Solar Installer in Phoenix
Verify the license
Arizona generally requires a contractor doing paid residential solar installation to hold an appropriate Arizona contractor license. Solar-device installers must meet the applicable solar-contractor qualifications, and the right classification depends on the work being performed. Ask each company for its license information and verify the status and classification with the Arizona Registrar of Contractors (AZ ROC); confirm any local requirements with your city or county. The provided state-law reference is Arizona Revised Statutes § 44-1762. There is no lookup link provided here, so contact AZ ROC directly to confirm a contractor’s status.
Look for certified installers
Ask who will design and install the system, and whether anyone on the project team holds a relevant North American Board of Certified Energy Practitioners (NABCEP) credential. Certification can indicate additional training and demonstrated knowledge; it is not a substitute for the required Arizona contractor license or a guarantee of workmanship. You can learn about credentials at NABCEP. Also ask whether the installer has certifications from the manufacturers whose equipment it proposes, what those certifications cover, and whether they affect access to product support or warranty service.
Compare quotes the same way
Request written proposals with the same assumptions, then compare the details rather than just the headline price. A larger system may cost more but should be evaluated against its estimated production and your needs. Check whether financing terms change the total you pay over time.
- System size in kW and price per watt, using the same quoted project cost for each bid.
- Panel and inverter brands and models, plus the estimated production in kWh per year and the assumptions behind it.
- Warranty coverage and duration for panel product and performance, inverter, workmanship, and roof penetrations.
- Who is responsible for permits, inspections, utility interconnection, and the interconnection agreement.
- Total cost or monthly payment, including any escalator, and whether the quote includes all described work.
Permits, interconnection and your HOA
Building and electrical permits and inspections are handled by the local authority having jurisdiction; the right office and requirements depend on your address. The homeowner or installer applies to the serving electric utility for interconnection and an agreement. In the Phoenix area, the serving utility may be Arizona Public Service Co or Salt River Project; elsewhere in Arizona it may include Tucson Electric Power Co or UNS Electric, Inc. Confirm which utility serves your property and ask who will manage its process. Arizona law generally bars planned-community associations from prohibiting rooftop solar, while allowing reasonable placement rules that do not prevent installation or impair function, use, cost, or efficiency. A separate pre-April 17, 1980 covenant exception applies, and these protections do not create an easement over a neighbor’s property. See A.R.S. §§ 33-1816 and 33-439.
Red flags
- Pressure to sign the same day, before you can review the proposal and contract.
- A company that cannot verify the appropriate Arizona license for the work, or crews whose licensing and responsibility are unclear. Out-of-state status alone is not proof of a problem; verify the contractor doing the work.
- Vague production estimates, a large upfront deposit without a clear written payment schedule, or unclear warranty responsibility.
- A promise that homeowners can claim federal tax credits for purchases in 2026; homeowner credits ended December 31, 2025.
For workmanship, abandonment, licensing, or unlicensed-contractor concerns, contact AZ ROC; deceptive or unfair sales and business-practice complaints can also go to the Arizona Attorney General’s Consumer Information and Complaints Unit.
Leasing Solar Panels
For Phoenix homeowners served by Arizona Public Service (APS) or Salt River Project (SRP), Palmetto offers solar leasing. A lease generally has a set monthly payment; a power purchase agreement (PPA) instead charges for each kilowatt-hour the system produces. PPAs are not listed as available in Arizona. Learn more about buying versus leasing solar.
With a lease, you can install solar without paying the full system cost upfront. Palmetto owns the system, and maintenance is handled under the lease terms—unlike a cash purchase, where you own the equipment and arrange any needed upkeep yourself.
Lease payments are generally predictable month to month, while a PPA bill can vary with seasonal production. Terms and availability depend on your home and utility. Explore Palmetto LightReach for details.
Go solar without the investment
With LightReach, there are no investment costs to recoup, loan payments to manage, or maintenance needs to take on. As soon as your panels are active, your solar savings are too!
Explore LightReach LeasingFrequently Asked Questions
Phoenix has solar export credits, but most customers do not receive traditional retail-rate net metering. APS and SRP generally use net billing: electricity your panels send to the grid earns a credit at the utility’s applicable export rate.
APS and SRP rates and plan rules differ, and SRP credits can vary by season and time of use. Check your utility bill to confirm your provider and current solar tariff; the value of excess power depends on your plan.
Solar panels may increase a Phoenix home’s resale value when the homeowner owns the system. A Zillow study found homes with solar sold for about 4.1% more on average. That national finding is not a guaranteed increase locally; system condition, energy savings, and utility plan can affect buyer interest.
This applies to purchased or owned systems, not leased or third-party-owned (TPO) panels. Resale may differ with a lease because the buyer may need to assume its agreement. Arizona’s solar property-tax valuation exclusion concerns assessed value, not market sale price.
In Phoenix, a LightReach solar lease can provide a low fixed monthly payment with no upfront cost. The calculator’s estimate for a medium home is about $105 per month; smaller and larger home estimates range from $77 to $142 per month.
For a cash purchase, the calculator estimates about $22,405 for a medium home after a $1,000 Arizona incentive. The federal 30% tax credit is no longer available for residential cash purchases following the 2025 federal law change. See the calculator section above for estimates by home size.
With Palmetto’s LightReach lease, Palmetto owns and installs the solar system. Phoenix homeowners pay one monthly amount covering the panels, installation, monitoring, maintenance, and comprehensive protection, including a 90% Production Guarantee. There’s no upfront cost.
An 8.20 kW system is estimated at about $105 per month, using Arizona’s production ratio of 1,624 kWh per kW annually and a rate of $0.095/kWh. Palmetto claims the commercial 30% ITC and passes savings through as lower payments. If the lease payment is below your current electric bill, savings can begin from day one.
In Phoenix, a typical 8.2 kW home solar system can produce about 14,500 kWh of electricity per year, based on scaling the article’s NREL PVWatts estimate of 17,662 kWh annually for a 10 kW system. A 10 kW system is estimated at about 17,700 kWh per year.
Actual output varies with roof direction and tilt, shade, dust, and seasonal conditions. Phoenix systems generally produce more in spring and early summer and less in winter; extreme summer heat and monsoon clouds can also affect production.
Solar can be financially worthwhile in Phoenix, especially when the system meaningfully offsets electricity bought from your utility. With a LightReach lease, there’s no upfront investment, and the monthly lease payment is typically less than your current electricity bill, so savings can begin as soon as the system is operating.
Your actual savings depend on your energy use, roof conditions, utility plan, and credits for excess power. Compare the lease payment plus any remaining utility bill with your current bills, and review the lease terms.
Solar panels are low maintenance in Phoenix. Desert dust and monsoon debris can collect on panels, so check for buildup and watch system output; cleaning or inspection may be needed if production drops.
With LightReach, Palmetto owns the system and handles monitoring, maintenance, and repairs at no extra cost. The plan also includes a 90% Production Guarantee.