Solar Guide
Solar in Prescott
Prescott homeowners are discovering solar energy as a smart solution, especially with Arizona ranking 3rd nationally for residential solar installations and electricity prices rising 22% since 2020.
Making an informed solar decision starts with understanding your local options and how solar panels for your home can work in Prescott’s sunny climate.
Key Takeaways
- Prescott receives excellent solar irradiance year-round with 300+ sunny days annually, making it ideal for solar energy production.
- Arizona offers strong solar incentives including 30% federal tax credit and $1,000 state credit, reducing installation costs significantly.
- Solar systems typically pay for themselves in 8 years while providing 25+ years of clean energy and bill savings.
Solar Cost Calculator
Our solar cost calculator uses real installation data from Prescott neighborhoods including Granite Dells, Willow Creek, and Prescott Valley. Get accurate pricing estimates based on actual local projects, not generic estimates from other states.
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Prescott Electricity Prices
Understanding Prescott’s electricity costs helps homeowners make informed energy decisions as rates continue climbing across Arizona.
Arizona electricity rates have risen from 12.5 cents per kWh in 2021 to 14.9 cents in 2024, representing a 19% increase over three years.
Solar panels allow Prescott homeowners to generate their own electricity, reducing dependence on the grid and providing protection against future rate increases.
Over 25 years, solar systems can provide significant savings as utility rates continue rising while your solar energy remains consistently priced.
Price of Energy: Arizona vs National Average
Prescott Area Utility Providers
Prescott residents receive electricity from Arizona Public Service (APS), which charged 15.3¢ per kWh in 2023, positioning rates between state and national averages.
APS rates exceed Arizona’s 14.0¢ average due to Prescott’s mountainous terrain requiring additional infrastructure, yet remain below the 16.0¢ national average through efficient operations.
Understanding these electricity costs helps homeowners evaluate energy options, as consistent rate increases make long-term energy planning increasingly important for household budgets.
Prescott Utilities Electricity Rates
Arizona Solar Incentives
Prescott homeowners can significantly reduce solar installation costs through various solar incentives in Arizona at federal and state levels.
Arizona offers multiple financial benefits including a 25% state tax credit up to $1,000, property tax exemptions that prevent higher assessments, and sales tax exemptions eliminating upfront taxes.
Net billing replaces net metering, crediting excess solar at reduced rates, encouraging battery storage for maximum savings and energy independence.
$8,252
Average savings in Arizona solar rebates
| Incentive | Type | Description | Source |
|---|---|---|---|
| Residential Clean Energy Credit | Federal tax credit | A federal tax credit worth 30% the cost of a solar panel system in the year it’s installed | Learn More |
| Credit for Solar Energy Devices | State tax credit | Arizona Homeowners receive the lesser of $1,000 or 25% off their solar panel installation. | Learn More |
| Property Tax Exemption | State tax exemption | No property tax increase from added solar value. Prevents higher assessment on solar equipment. | Learn More |
| Sales Tax Exemption | State tax exemption | No state or local sales tax on solar equipment and installation. Reduces upfront cost immediately. | Learn More |
The Residential Clean Energy Credit lets people claim a tax credit worth 30% the cost of a solar panel system in the year it’s installed. The credit can only be used against taxes you owe or have already paid that year, but any excess credit can be rolled over to future years.
The credit is broadly available, though there are a few restrictions — you must own the panels and they must be on a house you live in — so be sure to consult a tax professional about your situation.
Arizona’s Credit for Solar Energy Devices is a state tax credit that helps homeowners save money when they install solar panels on their Arizona residence. This nonrefundable tax credit reduces the amount of state income tax you owe, dollar-for-dollar, making solar energy more affordable for Arizona families.
To qualify for this credit, you must be an individual taxpayer who installs a solar energy device at your primary or secondary residence located in Arizona. The credit is nonrefundable, which means it can reduce your Arizona state tax liability to zero, but any unused credit amount cannot be refunded to you as cash. You’ll need to file Form 310 with your Arizona state tax return to claim this benefit.
While the official source doesn’t specify the exact credit amount or percentage, this incentive has been available for many years and continues to be offered for recent tax years through 2024. The credit applies to solar energy devices installed at your Arizona home, helping offset the upfront costs of going solar while supporting the state’s clean energy goals.
Arizona’s Property Tax Exemption for renewable energy equipment allows homeowners to exclude the added value of their solar panels and related equipment from their property tax assessment. This means that while your solar system may increase your home’s overall value, you won’t pay additional property taxes on that increased value. The exemption applies to solar panels, inverters, batteries, and other qualifying renewable energy equipment installed on residential properties.
The financial benefit varies based on your home’s location and local tax rates, but it can save homeowners hundreds to thousands of dollars annually in property taxes. For example, if your solar system adds $20,000 to your home’s value and your local property tax rate is 1%, you would save approximately $200 per year in property taxes. The exemption continues for as long as you own the renewable energy equipment, making it a long-term financial benefit that can add up to significant savings over the life of your solar system.
Arizona’s Solar and Wind Sales Tax Exemption removes state sales tax from the purchase and installation of solar and wind energy systems for your home. This means you won’t pay the standard Arizona sales tax (which varies by location but is typically around 5-10%) on your solar panels, inverters, batteries, and other system components, as well as the labor costs for professional installation.
This exemption applies to all residential solar and wind energy devices sold at retail in Arizona, with no income limits or system size restrictions. The tax savings are automatic at the point of sale – you simply don’t pay sales tax when you purchase qualifying equipment or hire a contractor for installation. There are no application deadlines or expiration dates for this ongoing state policy, making it a reliable benefit for Arizona homeowners considering clean energy upgrades. Keep in mind that while state sales tax is exempted, local sales taxes may still apply depending on your municipality.
Net Billing in Arizona is a solar compensation program that credits homeowners for excess electricity their solar panels send back to the grid. Unlike traditional net metering where you receive full retail credit, net billing pays you a lower wholesale rate for the power you export. The credit rates vary by utility company, ranging from about 3.5 cents to 6.9 cents per kilowatt-hour (kWh), which is significantly less than what you pay for electricity from the grid.
Most Arizona utilities lock you into your export credit rate for 10 years once you connect your solar system, providing rate stability. However, you’ll typically be required to switch to a time-of-use (TOU) rate plan, and some utilities charge additional monthly fees for solar customers. At the end of each year, most utilities will either pay out excess credits above a certain threshold (usually $10-$25) or reset your account to zero, though some allow credits to roll over indefinitely. This program is available to all residential solar customers, but the specific terms and credit rates depend on which Arizona utility serves your home.
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’s high elevation and abundant sunshine create excellent solar conditions year-round. Even winter months with occasional snow deliver strong solar production potential.
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 Installations in Prescott
We’ve mapped every solar installation across America to help you discover which Prescott neighborhoods have embraced clean energy. Explore this interactive map to see how many of your neighbors have made the switch to solar power!
Leasing Solar Panels
For Prescott homeowners, Palmetto offers solar leasing options that eliminate upfront costs while providing immediate savings. Our leasing program is available throughout Arizona, including all major utility territories that serve the Prescott area, such as Arizona Public Service (APS).
With a solar lease, you pay a fixed monthly amount (typically $100-200) while we handle all system maintenance, monitoring, and repairs. This differs from purchasing solar outright, where you’re responsible for a large initial investment and ongoing maintenance costs that can add up over time.
The key advantage is predictable energy costs and professional system care. Rather than managing loan payments, tax credits, and potential repair expenses yourself, our LightReach program provides worry-free solar with immediate bill reduction. Learn more about solar leasing versus buying to determine which option fits your financial goals best.
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 excellent sense in Prescott, AZ due to abundant sunshine, strong financial incentives, and rising electricity costs. Prescott receives over 300 sunny days annually with excellent solar irradiance, making it ideal for solar energy production.
Arizona offers compelling financial benefits including a 30% federal tax credit, $1,000 state credit, and property tax exemptions. With electricity rates at 15.3¢/kWh and rising, solar systems typically pay for themselves in 8 years while providing 25+ years of savings.
No, Prescott does not have traditional net metering. Arizona Public Service (APS), which serves Prescott, uses a net billing system that credits excess solar at $0.0686/kWh rather than full retail rates. This export credit is locked for 10 years upon interconnection.
Solar customers must switch to time-of-use rates and pay a monthly Grid Access Charge of $0.242/kW DC. Net excess credits are settled annually in December if they exceed $25, then the account resets to zero.
Yes, solar panels increase home value in Prescott, AZ. Research shows that solar panels increase home value by 4.1% on average across the United States, with Arizona homes seeing similar benefits.
In Prescott’s market, where median home values are around $500,000, solar panels could add approximately $20,000 in value. Arizona’s property tax exemption ensures you won’t pay additional taxes on this increased value, maximizing your financial benefit.
Solar installation costs in Prescott range from $12,121 to $20,759 after federal and state incentives, depending on your home size and energy needs. Before incentives, systems cost $18,745-$31,085, but Arizona’s 30% federal tax credit and $1,000 state credit significantly reduce upfront expenses.
A typical medium-sized home (2,000-3,000 sq ft) needs an 8.5 kW system costing $15,921 after incentives. This investment typically pays for itself in 8 years through electricity bill savings, then provides free power for 17+ additional years.
Yes, solar is financially worth it in Prescott, AZ. With abundant sunshine and rising electricity costs at 15.3¢/kWh, solar systems typically pay for themselves in 8 years through bill savings.
Arizona’s strong incentives including 30% federal tax credit and $1,000 state credit reduce upfront costs significantly. Over 25 years, Prescott homeowners save an average of $64,000 while protecting against future rate increases.
We believe Palmetto offers the best solar experience in Prescott with our proven track record of 4,982 installations across Arizona since 2020. Our national expertise combined with local focus ensures quality installations backed by industry-leading financing options.
We handle everything from design to permitting to installation, providing transparent pricing and exceptional customer service. Our comprehensive warranties and ongoing support give Prescott homeowners confidence in their solar investment for decades to come.