Prescott, AZ Solar Panels
Solar Power in Prescott
Prescott, AZ gets more than 277 sunny days a year, making it one of the strongest locations in the country for solar. Arizona ranks 3rd in the nation for residential solar installations — a sign that local homeowners have found it to be a proven and practical option.
With Arizona electricity prices up 22% from 2020 to 2024, the timing is worth paying attention to. This guide covers what you need to know about solar panels for your home in Prescott — straightforward and without the sales pitch.
How Much Do Solar Panels Cost in Prescott, AZ?
Based on real solar installations across Prescott, Prescott Valley, Chino Valley, and Dewey-Humboldt, this calculator uses local data to give you an accurate estimate of what solar installation could cost for your home.
System
- No upfront investment
- Palmetto handles all maintenance
- 90% Production Guarantee
- Comprehensive protection program included
Key Takeaways
- Prescott gets 277+ sunny days a year — making it one of the best places in the country to generate solar energy at home.
- Arizona homeowners can save up to $64,000 over 25 years with solar, plus state incentives like a $1,000 tax credit and a full property tax exemption.
- You don’t need to buy solar panels to go solar — Prescott homeowners can lease through Palmetto’s LightReach program for as little as $109/month with no upfront cost.
Prescott Electricity Prices
Electricity rates in Arizona have been climbing steadily — and for Prescott homeowners, that trend is worth understanding before your next utility bill arrives.
Arizona’s average electricity rate rose from 12.5 cents per kWh in 2021 to 14.9 cents per kWh in 2024 — an increase of nearly 19%. As the chart shows, that upward trend has been consistent year over year.
Solar can help Prescott homeowners reduce their dependence on grid electricity. By generating power at home, you’re less exposed to future rate increases — whatever direction utility prices move next.
Over time, that protection adds up. Homeowners who go solar typically lock in a more predictable energy cost for decades, making solar a long-term hedge against the rising cost of electricity in Prescott, AZ.
Price of Energy: Arizona vs National Average
Prescott Area Utility Providers
Prescott homeowners are primarily served by APS (Arizona Public Service). Based on 2023 data — the most recent available — APS charges 15.3¢ per kWh, placing it between Arizona’s state average of 14.0¢ and the national average of 16.0¢.
APS rates run above Arizona’s 2023 state average of 14.0¢ per kWh, partly due to infrastructure costs across the state’s diverse terrain. However, at 15.3¢, Prescott residents still pay less than the 2023 national average of 16.0¢ per kWh.
Even at current rates, electricity costs add up over time. For Prescott homeowners, solar panel installation can help offset those ongoing expenses — locking in more predictable energy costs rather than remaining fully exposed to future rate changes.
Prescott Utilities Electricity Rates
Arizona Solar Incentives
Prescott homeowners have access to several solar incentives in Arizona that can help reduce the upfront and long-term costs of going solar.
Arizona offers a personal income tax credit, a sales tax exemption on solar equipment, and a full property tax exemption. Utility rebates from APS — the primary Prescott-area provider — and net billing credits add further financial value over time.
Note: A 2025 change in federal tax law eliminated the residential solar tax credit. State and local incentives remain. Homeowners who lease through Palmetto’s LightReach program benefit from Palmetto claiming the commercial ITC, with savings passed through as lower monthly payments.
| Incentive | Type | Description | Source |
|---|---|---|---|
| Federal Battery Storage Tax Credit (ITC) | Tax Credit | A 30% federal tax credit for battery storage systems with a capacity of at least 3 kWh, available through 2032 before phasing down. | Learn More |
| Arizona Credit for Solar Energy Devices | Tax Credit | Arizona offers a personal income tax credit equal to 25% of the cost of a solar energy system, up to a maximum of $1,000. | Learn More |
| Arizona Solar Sales Tax Exemption | Sales Tax Exemption | Arizona exempts solar energy equipment — including panels, inverters, batteries, and mounting hardware — from the state’s 5.6% sales tax. | Learn More |
| Arizona Solar Energy Property Tax Exemption | Property Tax Exemption | Solar energy systems installed on Arizona properties are fully exempt from property tax assessment, meaning the added home value from solar does not increase your property tax bill. | |
| Arizona Net Billing Policy (Statewide) | Net Metering | Arizona uses a net billing system where homeowners receive a credit for excess solar energy exported to the grid at a rate lower than the retail electricity rate, with export rates locked in for 10 years. | Learn More |
| Arizona Public Service (APS) – Storage Rewards Pilot | Rebate | APS offers financial incentives to homeowners with qualifying battery storage systems who allow the utility to draw on stored energy during peak demand periods. | Learn More |
| Arizona Renewable Energy Production Tax Credit (Commercial) | Tax Credit | A corporate or personal income tax credit for electricity produced by qualifying renewable energy systems of at least 5 MW, paid over a 10-year period at rates up to $0.04/kWh. | Learn More |
Homeowners who install a battery energy storage system can claim a 30% federal Investment Tax Credit (ITC) on the full cost of the battery, provided it has a minimum capacity rating of at least 3 kWh. This credit applies whether the battery is paired with solar panels or installed as a standalone system, and it directly reduces your federal income tax liability dollar-for-dollar. For a typical home battery like a Tesla Powerwall or similar system, this can translate to thousands of dollars in savings.
Unlike the residential solar ITC — which was eliminated by the “One Big Beautiful Bill” signed in July 2025 — the battery storage credit remains available through 2032 at the full 30% rate. It then steps down to 26% in 2033 and 22% in 2034 before expiring entirely in 2035. This gives Arizona homeowners a meaningful window to add battery storage and still capture significant federal savings.
To claim the credit, file IRS Form 5695 with your federal tax return for the year the system is placed in service. If the credit exceeds your tax liability in a given year, the unused portion can be carried forward to future tax years. You must own the battery system outright — leased systems do not qualify.
Arizona homeowners who purchase a new solar energy system — including photovoltaic (PV) systems, solar water heaters, solar pool heating, and solar batteries — can claim a state income tax credit equal to 25% of the total system cost, up to a lifetime maximum of $1,000. This credit is claimed on Arizona Form 310 and is applied directly against your state income tax liability, reducing what you owe dollar-for-dollar.
To be eligible, you must own the system outright — solar leases and power purchase agreements (PPAs) do not qualify. The system must also come with at least a two-year warranty on the panels and a one-year warranty on other equipment such as batteries and EV chargers. The $1,000 cap is a lifetime limit per taxpayer (the program has been in place since 1995), so if you have claimed this credit before, your remaining available credit may be reduced.
If the credit exceeds your Arizona tax liability in the year it is claimed, the unused portion can be carried forward for up to five years. For more information or to download Form 310, visit the Arizona Department of Revenue website or the Governor’s Office of Resiliency Clean Energy Hub at resilient.az.gov.
When you purchase a qualifying solar energy system in Arizona, you pay zero state sales tax on the equipment. This exemption covers photovoltaic panels, inverters, batteries, mounting hardware, and other eligible solar components. Arizona’s state sales tax rate is 5.6%, so on a $20,000 system, this exemption alone saves you more than $1,100 — and on larger systems, savings can exceed $1,600 or more.
The exemption applies to residential, commercial, and general public installations with no maximum cap on savings. Arizona removed its previous $5,000 savings cap in 2006, meaning the full purchase price of your system is exempt regardless of system size. Eligible technologies include photovoltaics, solar water heating, solar space heating, solar thermal electric, passive solar, wind, solar pool heating, and daylighting systems.
You do not need to take any special action to claim this exemption — your solar installer is responsible for registering with the Arizona Department of Revenue and applying the exemption at the point of sale. For questions, contact the Arizona Department of Revenue Tax Assistance line at (602) 255-3381 or (800) 352-4090.
Installing solar panels typically increases the market value of your home, but in Arizona, that added value is completely excluded from property tax assessments. This means homeowners in Prescott can enjoy the full financial and energy benefits of going solar without paying a single dollar more in property taxes — a significant long-term savings advantage that compounds every year you own the system.
The exemption applies to a wide range of eligible technologies including solar photovoltaics, solar water heating, solar space heating, solar thermal electric, passive solar, solar pool heating, wind systems, geothermal, and more. It covers residential, commercial, and industrial properties with no cap on the system size or value of the exemption.
To claim the exemption, property owners must provide their county assessor with documentation confirming the purchase and installation of the eligible equipment, including costs. This documentation must be submitted no less than six months before the notice of full cash value is issued for the initial valuation year. Contact your local county assessor’s office for specific submission deadlines and required forms.
Arizona transitioned from traditional net metering to a net billing policy in 2017. Under net billing, when your solar panels produce more electricity than your home uses, the excess energy is sent to the grid and credited to your account — but at a rate lower than the retail price of electricity. As of 2026, export rates vary by utility: Arizona Public Service (APS) credits excess generation at approximately $0.076/kWh, Tucson Electric Power (TEP) at approximately $0.057/kWh, and Salt River Project (SRP) at approximately $0.028/kWh.
One important protection for solar homeowners: when you interconnect your solar system, your export rate is locked in for 10 years. Even if the utility lowers the rate for new customers in future years, your rate remains the same for the duration of that period. Additionally, Arizona’s net billing policy limits how quickly rates can drop — compensation rates cannot decrease by more than 10% per year for new customers.
Because export rates are lower than retail electricity rates, pairing your solar system with a battery storage system is a smart strategy for residents of Prescott. Instead of exporting excess solar energy to the grid at a reduced credit rate, you can store it in a battery and use it later when your panels aren’t producing — maximizing your self-consumption and reducing your reliance on grid power. Note that SRP is transitioning new solar customers to net-billing-based time-of-use (TOU) rate plans starting in late 2025, which further rewards solar-plus-battery systems.
Arizona Public Service (APS) operates a Storage Rewards Pilot program that compensates residential customers for making their home battery storage available to the utility during periods of peak electricity demand. By enrolling, homeowners can earn financial incentives while helping APS manage grid stress — a win-win for both participants and the broader electricity system.
The program is compatible with select battery systems, including FranklinWH residential energy storage systems. Homeowners who install a qualifying battery can enroll and receive payments for allowing APS to dispatch stored energy during designated peak events. Your home’s power is maintained throughout these events, and you retain backup power capability.
For homeowners who want to participate but are concerned about upfront costs, leasing options are available through financing platforms like Palmetto’s LightReach, which can lower the initial investment while still allowing participation in the incentive program. Contact APS directly or visit aps.com for current program details, compatible equipment lists, and enrollment information.
Arizona’s Renewable Energy Production Tax Credit is available to businesses and individuals who own and operate qualifying renewable energy systems with a minimum capacity of 5 megawatts (MW). The credit is calculated based on the actual kilowatt-hours (kWh) of electricity produced by the system each year and is paid out over a 10-year period. For photovoltaic and solar thermal electric systems, the credit starts at $0.04/kWh in years 1 and 2, steps down gradually, and reaches $0.01/kWh in years 9 and 10.
The maximum credit is $2 million per system per year, and the total annual program budget is $20 million statewide. The credit may be applied against either corporate or personal income taxes, providing flexibility for different business structures. Only systems installed after December 31, 2010 are eligible.
This incentive is best suited for large-scale commercial or utility solar developers rather than typical residential homeowners. For full eligibility requirements, application procedures, and current program availability, visit the Arizona Department of Revenue’s tax credits page at azdor.gov.
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 QuotePrescott 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.
Prescott enjoys over 277 sunny days per year and high elevation, both boosting solar production. Even cloudier months still generate meaningful energy, making solar a smart choice here.
Solar Production in Prescott 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 Prescott
We’ve mapped every solar installation across the U.S. — and Prescott is lighting up! Explore the heatmap below to see which neighborhoods in your community have already made the switch to solar. Click any hexagon to see how many of your neighbors have gone solar!
Leasing Solar Panels
If you’re not ready to purchase solar panels outright, Palmetto offers a solar lease through its LightReach program — available to Prescott homeowners served by APS (Arizona Public Service). A lease lets you go solar with no large upfront cost. Instead, you pay a fixed monthly amount, and Palmetto owns and maintains the system for you.
With a lease, you skip the responsibilities that come with ownership — no worrying about repairs, inverter replacements, or system monitoring. Palmetto handles all of that. You simply pay your monthly lease and enjoy the bill savings. This is a meaningful difference from a cash purchase, where maintenance and any unexpected repair costs fall on you. To understand how leasing compares to buying outright, this guide breaks down the key differences.
It’s also worth knowing how a lease differs from a Power Purchase Agreement (PPA). With a lease, your monthly payment is fixed — the same amount every month regardless of how much energy your panels produce. A PPA, by contrast, charges you per kilowatt-hour generated, so your bill fluctuates with the seasons. In Arizona, only the lease option is currently available through Palmetto, giving Prescott homeowners a simple, predictable way to go solar.
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!
Learn MoreFrequently Asked Questions
Yes, solar makes strong sense in Prescott. With over 277 sunny days per year and 6.2 peak sun hours daily, Prescott is one of the best locations in the country for solar production. Arizona electricity rates have risen nearly 19% since 2021, and homeowners served by APS can expect to pay around 15.3¢/kWh — making solar a practical way to reduce long-term energy costs.
Prescott homeowners can also take advantage of Arizona’s $1,000 state tax credit, a full property tax exemption, and a sales tax exemption on solar equipment. If upfront cost is a concern, Palmetto’s LightReach lease program removes that barrier entirely — you can go solar with no money down and start saving from day one, with payments starting as low as $109/month.
Prescott is primarily served by Arizona Public Service (APS), which uses a net billing system rather than traditional net metering. When your solar panels produce more electricity than your home uses, the excess is credited to your account at $0.0686/kWh — lower than the retail rate. That export rate is locked in for 10 years upon interconnection.
Any unused credits are settled annually each December. If your credits exceed $25, they are paid out; otherwise, they roll over. Because export credits are below retail rates, pairing solar with battery storage can help Prescott homeowners maximize self-consumption and reduce grid dependence.
Yes, solar panels can increase your home’s value in Prescott. Research from Zillow shows that homes with solar panels sell for approximately 4.1% more than comparable homes without them. For a $400,000 home in Prescott, that’s roughly $16,400 in added value.
Arizona also offers a full property tax exemption for solar installations, meaning the added home value from your system won’t raise your property tax bill — a meaningful financial advantage for Prescott homeowners.
For Prescott homeowners, the most accessible way to go solar is through Palmetto’s LightReach lease — with no upfront cost and a fixed monthly payment starting as low as $109/month for a medium-sized home. Palmetto owns and maintains the system, so there’s nothing to manage.
If you prefer to purchase outright, a cash purchase is also available. Note that the federal 30% residential solar tax credit was eliminated following the Big Beautiful Bill. Arizona’s $1,000 state tax credit still applies. Use the calculator above for specific pricing based on your home size.
For many Prescott homeowners, solar is worth it financially — especially with a lease. With Palmetto’s LightReach program, your monthly lease payment is typically less than your current APS electricity bill, meaning you can start saving from day one with no upfront investment required.
Prescott’s 277+ sunny days and rising electricity rates (up nearly 19% since 2021) strengthen the long-term case. Cash buyers can expect to save an average of $64,000 over 25 years, while leaseholders benefit from predictable, lower monthly energy costs without owning or maintaining the system.
Palmetto Solar is a top choice for Prescott homeowners. As a national company with deep local roots, we’ve completed 4,982 installations across Arizona since 2020 — backed by a skilled install network and some of the best financing options in the industry.
We offer flexible options including our LightReach lease with no upfront cost, starting at just $109/month, as well as cash purchase. Prescott’s 277+ sunny days make it an ideal fit for solar, and our team makes the process simple from start to finish.
Palmetto’s LightReach is an all-inclusive solar lease — one fixed monthly payment covers the system, installation, monitoring, maintenance, and a 90% Production Guarantee. There is no upfront cost. For a typical 8.50 kW system in Prescott, the estimated monthly payment is approximately $109/month, based on Arizona’s production ratio of 1,624 kWh/kW/year.
Because Palmetto owns the system, it claims the commercial Investment Tax Credit (ITC) and passes those savings to you through lower monthly payments — an advantage cash buyers no longer have following recent changes to federal tax law. Most Prescott homeowners find the lease payment is less than their current APS bill, so savings begin immediately.