Prescott, AZ Solar Panels
Solar Power in Prescott
Prescott averages 277 sunny days a year — and with Arizona electricity prices rising 22% since 2020, it’s no wonder more local homeowners are looking to solar to take control of their energy costs.
This guide covers how solar technology works, what the installation process looks like in Prescott, and what you should know before getting started with solar panels for your home.
How Much Do Solar Panels Cost in Prescott, AZ?
Using real installation data from Prescott, Prescott Valley, Chino Valley, and Dewey-Humboldt, this calculator gives you an honest, localized estimate of what solar installation actually costs in your area — no guesswork, just real numbers from real homes.
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 Arizona’s best locations for solar, with average homeowner savings of ~$64,000 over 25 years.
- Arizona offers real solar incentives including a $1,000 state tax credit, a sales tax exemption, and a property tax exemption so your tax bill won’t rise after installation.
- You don’t need to buy solar to benefit — Prescott homeowners can lease panels through LightReach for as little as $109/month with no upfront cost and maintenance included.
Prescott Electricity Prices
Electricity prices in Prescott are rising. Understanding what you pay — and why — is the first step toward smarter energy decisions.
Arizona electricity rates climbed from 12.5 cents per kWh in 2021 to 14.9 cents per kWh in 2024 — nearly a 19% increase in just three years. That trend shows no signs of slowing down.
Solar panel installation gives Prescott homeowners a way to generate their own electricity, reducing how much they draw from the grid and helping them better understand and manage their monthly energy costs.
Because solar systems are designed to last 25 years or more, homeowners who install solar today can insulate themselves from future rate increases — turning a predictable upward trend into a long-term financial advantage.
Price of Energy: Arizona vs National Average
Prescott Area Utility Providers
In Prescott, AZ, the primary utility provider is APS (Arizona Public Service). Based on 2023 data, APS customers pay approximately 15.3¢ per kWh — sitting between Arizona’s state average of 14.0¢ and the national average of 16.0¢ per kWh.
APS rates reflect the cost of maintaining a traditional grid across a region with high summer cooling demands and growing population. While slightly below the national average, Prescott residents still pay more than most other Arizona utility customers — a gap that adds up over time.
For Prescott homeowners, understanding local electricity costs is a useful starting point when evaluating solar. With 277 sunny days per year, the area offers strong solar production potential, which can help offset what you’d otherwise pay on your monthly utility bill.
Prescott Utilities Electricity Rates
Arizona Solar Incentives
Prescott homeowners have access to several solar incentives in Arizona that can meaningfully reduce the cost of solar panel installation — from state tax credits to property tax protections.
Arizona offers a residential solar tax credit worth up to $1,000, a sales tax exemption on solar equipment, and a property tax exemption that ensures your home’s assessed value won’t increase after installation.
Note that the federal residential solar tax credit is no longer available going forward. State and local incentives still apply. Homeowners who lease through LightReach benefit from Palmetto handling the commercial tax credit, with savings passed through via lower monthly payments.
| Incentive | Type | Description | Source |
|---|---|---|---|
| Arizona Residential Solar Energy Tax Credit | Tax Credit | Arizona homeowners can claim a state income tax credit equal to 25% of the cost of a solar or wind energy device installed at their residence, up to a maximum of $1,000. | Learn More |
| Arizona Solar Equipment Sales Tax Exemption | Sales Tax Exemption | Arizona exempts qualifying solar energy equipment from state sales tax, saving homeowners approximately 5.6% on the purchase price of eligible solar components. | Learn More |
| Arizona Solar Energy Property Tax Exemption | Property Tax Exemption | Arizona law exempts the added home value attributable to a solar energy system from property tax assessments, so installing solar will not increase your annual property tax bill. | Learn More |
| Federal Battery Storage Investment Tax Credit (ITC) — 30% | Tax Credit | Homeowners who install a qualifying battery storage system with at least 3 kWh of capacity can claim a 30% federal tax credit on the total installed cost of the battery through 2032. | Learn More |
| APS Storage Rewards Pilot Program | Rebate | APS battery owners can earn approximately $110 per average kilowatt of battery output per season by enrolling in APS’s Storage Rewards Pilot, which pays homeowners for discharging stored energy during peak demand events. | Learn More |
| Arizona Net Billing (Excess Solar Export Credits) | Net Metering | Arizona’s major utilities compensate solar customers for excess electricity exported to the grid through net billing programs, crediting homeowners at a utility-specific rate that is lower than the retail electricity rate. | Learn More |
Arizona’s Residential Solar Energy Tax Credit allows homeowners to claim 25% of the total cost of a qualifying solar or wind energy device installed at their primary or secondary residence, up to a maximum credit of $1,000. Qualifying systems include photovoltaic (solar panel) systems, solar domestic water heating systems, solar pool and spa heating systems, passive solar building systems, solar daylighting systems, and wind turbines. This credit is applied directly against your Arizona state income tax liability.
If the credit exceeds your tax liability in the year it is claimed, the unused portion can be carried forward for up to five consecutive tax years — so you won’t lose the benefit if you don’t owe enough taxes in a single year. There is no expiration date on this program, and it is currently active for 2026 installations.
To claim the credit, complete Arizona Form 310 and attach it to your state income tax return for the year the system was installed. The official form and instructions are available through the Arizona Department of Revenue at azdor.gov. Note that the $1,000 cap applies regardless of how many solar devices are installed, so the maximum benefit per household is $1,000 total.
Arizona provides a full sales tax exemption on the purchase of qualifying solar energy devices and equipment, including solar panels, inverters, mounting hardware, and installation labor. This exemption is applied automatically at the point of sale by the seller — homeowners do not need to file any paperwork to receive this benefit. The state sales tax rate is approximately 5.6%, though local jurisdictions may add additional taxes, so actual savings will vary by location.
Eligible equipment includes photovoltaic systems, solar water heating systems, solar space heating systems, solar thermal electric systems, passive solar systems, wind energy devices, solar pool heating systems, and daylighting systems. The exemption applies to both residential and commercial installations with no maximum dollar cap, making it a valuable savings tool for larger systems.
It is important to note that the sales tax exemption does not automatically extend to standalone battery storage systems, controls, or accessories that are not considered an integral part of the solar energy system. If you are pairing a battery with a new solar installation, confirm with your installer which components qualify. This exemption is authorized under Arizona Revised Statutes and has been in effect since 1997.
Under Arizona Revised Statutes §42-11054, the increase in a residential property’s assessed value resulting from the installation of a solar energy system is fully excluded from property tax calculations. This means that even though solar panels can significantly increase your home’s market value, your annual property tax bill will not go up as a result of the installation. This exemption is permanent and applies statewide to residential, commercial, and industrial properties.
For homeowners in Prescott, this translates to meaningful annual savings in property taxes, depending on the size of the system and the local tax rate (millage rate) in Yavapai County. In counties with higher millage rates, the annual savings can be even greater. Over the life of a solar system (25+ years), this exemption can represent thousands of dollars in cumulative tax savings.
The exemption is generally applied automatically, but homeowners may be required to submit documentation of system costs and equipment to their county assessor. It is recommended to contact the Yavapai County Assessor’s office to confirm the process and ensure the exemption is properly recorded. No annual renewal is required once the exemption is in place.
The federal Battery Storage Investment Tax Credit allows homeowners to claim 30% of the total installed cost of a qualifying battery storage system directly against their federal income tax liability. To qualify, the battery must have a minimum capacity of 3 kWh. Critically, the battery does not need to be paired with solar panels — standalone battery installations also qualify for the full 30% credit. The credit covers the cost of the battery unit, inverter, installation labor, and any necessary electrical panel upgrades.
As a practical example, a Tesla Powerwall 3 with a fully installed cost of approximately $16,000 would generate a federal tax credit of $4,800. For a typical home battery system costing between $12,000 and $16,000, homeowners can expect a credit of $3,600 to $4,800. This credit is currently set at 30% through 2032, making 2026 an excellent time to take advantage of it. If the credit exceeds your tax liability in the year of installation, the unused portion can be carried forward to future tax years.
To claim the credit, file IRS Form 5695 (Residential Energy Credits) with your federal tax return for the year the battery system is placed in service. Note that this credit applies to the battery storage component specifically — the federal residential solar panel tax credit (Section 25D) has expired as of December 31, 2025, and is no longer available for new solar panel installations. Always consult a qualified tax professional to confirm your eligibility and maximize your benefit.
Arizona Public Service (APS) offers the Storage Rewards Pilot program, which pays residential battery storage owners for contributing stored energy back to the grid during high-demand periods. Enrolled homeowners earn approximately $110 per average kilowatt of battery output released during the event season, which runs from May 1 through October 31. APS may call up to 60 discharge events per season, each lasting one to four hours. A typical 13.5 kWh battery with 6 kW of output capacity can earn approximately $660 per season.
This program replaces the original APS Residential Battery Pilot, which offered an upfront rebate of up to $3,750 and is now closed to new applicants. The Storage Rewards Pilot is an ongoing, performance-based program open for enrollment. The pilot is designed to run for five years with up to 5,000 participants, so enrollment capacity may be limited. Participants must have a qualifying battery storage system installed at their APS-served home.
To enroll, contact APS directly through their website or customer service line. This program is separate from the APS Cool Rewards smart thermostat program and is specifically designed for battery storage owners. Because APS operates under a net billing structure (not net metering), pairing a battery with solar and enrolling in Storage Rewards is one of the most effective ways for residents of Prescott to maximize the financial return on a solar-plus-storage investment in the APS service territory.
Arizona has transitioned from traditional net metering to net billing across its major utilities. Under net billing, when your solar panels produce more electricity than your home uses, the excess is exported to the grid and you receive a bill credit — but at a rate below the retail electricity rate. Prescott is primarily served by APS, which credits approximately $0.0617/kWh (locked in for 10 years at the time of interconnection).
A key benefit for APS customers is the 10-year rate lock: the export rate in effect when your system interconnects is guaranteed for 10 years, even if rates decrease for future customers. The Arizona Corporation Commission has established a schedule where export rates may decrease by up to 10% each year for new customers, meaning the sooner you go solar, the higher your locked-in export rate will be. APS also charges a Grid Access Fee of approximately $0.93 per kW of solar array capacity per month.
Because net billing export rates are significantly below retail electricity rates, the financial strategy for Prescott solar owners has shifted toward self-consumption — using as much of your solar production directly in your home as possible — and pairing solar with battery storage to store excess energy for use during evening peak hours rather than exporting it at low rates. Always verify the current export rate with APS before making installation decisions, as rates are updated periodically.
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 278 sunny days annually, with high elevation boosting panel efficiency. Even partly cloudy months still generate strong solar output, making Prescott an excellent location for solar energy.
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 solar installations across Prescott to show just how many of your neighbors have already made the switch. Explore the map below to see which neighborhoods and communities are leading the way on solar energy in the Prescott area!
Leasing Solar Panels
If you’re not ready to purchase solar panels outright, Palmetto offers a solar lease through LightReach — available to Prescott homeowners served by APS, as well as several other Arizona utilities. With a lease, you pay a fixed monthly amount (for example, $109/month for a medium-sized home) rather than a large upfront cost.
Leasing has a few key advantages over a cash purchase. You don’t need to cover installation costs up front, and Palmetto owns and maintains the system — so repairs, monitoring, and performance are handled for you. There’s also a 90% production guarantee, so if your system underproduces, you’re protected. Want to understand the difference between a lease and a PPA? This guide breaks it down clearly.
For most Prescott homeowners, a lease is a straightforward way to start saving on electricity without taking on the responsibilities of ownership. You get the benefits of solar — lower monthly energy costs and protection against rising utility rates — with predictable payments and no maintenance burden.
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
Yes, solar makes strong sense in Prescott. With 277 sunny days per year, rising APS electricity rates, and Arizona’s $1,000 state tax credit, property tax exemption, and sales tax exemption on equipment, the conditions are favorable for most homeowners.
If upfront cost is a concern, Palmetto’s LightReach lease removes that barrier entirely — Prescott homeowners can go solar with no money down and start saving from day one, with payments starting as low as $109/month and all maintenance included.
Prescott is primarily served by Arizona Public Service (APS), which uses a net billing program — not traditional net metering. When your solar panels produce more electricity than your home uses, APS credits excess exports at approximately $0.06857/kWh, which is below the retail rate. New solar customers are also required to move to a Time-of-Use (TOU) rate and pay a Grid Access Charge of $0.242/kW DC per month.
The good news: APS locks in your export credit rate for 10 years at the time of interconnection. Credits accumulate and are trued up annually each December. Because export rates can decrease for new customers each year, going solar sooner means locking in a higher rate.
Yes, solar panels can increase your home value in Prescott. According to a Zillow study, homes with solar panels sell for approximately 4.1% more than comparable homes without them. For a $400,000 home in Prescott, that could mean roughly $16,400 in added value.
Arizona also offers a property tax exemption for solar installations, meaning your annual property tax bill won’t increase even as your home’s market value rises — a meaningful benefit for Prescott homeowners considering solar.
The most affordable way to go solar in Prescott is through Palmetto’s LightReach lease — with no upfront cost and a fixed monthly payment starting around $109/month for a medium-sized home. Palmetto owns and maintains the system, so there’s nothing out of pocket to get started.
For homeowners who prefer to purchase outright, a typical 8.5 kW system runs around $23,173 after Arizona’s $1,000 state tax credit. Note that the federal 30% residential tax credit is no longer available following the Big Beautiful Bill. Use the calculator above for a personalized estimate.
For many Prescott homeowners, solar can be worth it financially — especially with a lease. Through Palmetto’s LightReach program, your monthly lease payment is typically less than your current APS electricity bill, meaning you start saving from day one with no upfront investment.
With Prescott averaging 277 sunny days per year and APS rates rising nearly 19% since 2021, the financial case for solar is straightforward. Cash buyers can expect roughly $64,000 in savings over 25 years, while lessees benefit from predictable, lower monthly payments with no maintenance costs.
Palmetto Solar is a strong choice for Prescott homeowners. As a national company with a local focus, we’ve completed 4,982 installations across Arizona since 2020. We bring a vetted install network, transparent pricing, and some of the best financing options in the industry.
Whether you prefer to purchase or lease, we make it straightforward. Our LightReach lease starts at just $109/month with no upfront cost — and our cash purchase option gives Prescott homeowners a clear path to long-term savings. Maintenance, monitoring, and a 90% production guarantee are included.
With Palmetto’s LightReach lease, Prescott homeowners pay one simple monthly payment that covers the solar panel system, installation, monitoring, maintenance, and a 90% Production Guarantee — with no upfront cost. For a typical 8.50 kW system in Prescott, the estimated monthly lease payment is approximately $109/month.
Because Palmetto owns the system, it claims the commercial Investment Tax Credit (ITC) and passes those savings to you through lower monthly payments — a key advantage now that the residential ITC is no longer available for cash purchases. Most Prescott homeowners find the lease payment is less than their current APS electricity bill, so savings begin immediately.