Tucson, AZ Solar Panels
Solar Power in Tucson
Tucson sees over 280 sunny days a year — making it one of the best places in the country for solar panel installation. Arizona already ranks 3rd in the US for residential solar installations, and with electricity prices up 22% since 2020, it’s easy to see why more homeowners are exploring their options.
If you’re thinking about solar installation in Tucson, this guide walks you through everything you need to know. Learn more about solar panels for your home as you read on.
How Much Do Solar Panels Cost in Tucson, AZ?
Based on real solar installations across Tucson — from Marana and Oro Valley to Sahuarita and Vail — this calculator uses local data to estimate what solar panels might cost for your home. See personalized numbers in seconds.
System
- No upfront investment
- Palmetto handles all maintenance
- 90% Production Guarantee
- Comprehensive protection program included
Key Takeaways
- Tucson gets over 280 sunny days a year — making it one of the best cities in the U.S. for solar, with average savings of ~$66,000 over 25 years.
- Arizona offers valuable solar incentives including a $1,000 state tax credit, a full sales tax exemption, and a property tax exemption on your home’s added value.
- You don’t need to buy solar panels to save — Palmetto’s LightReach lease lets Tucson homeowners go solar for as little as $109/month with no upfront cost.
Tucson Electricity Prices
Electricity costs in Tucson have been climbing. Understanding what you’re paying — and why — is the first step toward smarter energy decisions.
Arizona electricity rates rose 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’s a trend that directly impacts monthly household budgets across Tucson.
Solar panels allow homeowners to generate their own electricity, reducing how much they draw from the grid. For many Tucson residents, this means less exposure to rising utility rates over time.
Because solar systems typically last 25 years or more, the long-term value compounds as electricity prices continue to rise. Homeowners who go solar today lock in a more predictable energy cost for decades ahead.
Price of Energy: Arizona vs National Average
Tucson Area Utility Providers
Tucson’s primary electric utility is Tucson Electric Power (TEP). Based on 2023 data — the most recent available — TEP’s residential rate is 15.0¢ per kWh, placing it between the Arizona state average and the national average.
TEP’s rate of 15.0¢/kWh sits above Arizona’s 2023 state average of 14.0¢/kWh, but below the 2023 national average of 16.0¢/kWh. Tucson residents pay more than most Arizonans, though less than the typical American household.
Because utility rates can shift over time, many Tucson homeowners explore solar as a way to stabilize their energy costs. Generating your own power can reduce dependence on fluctuating grid prices.
Tucson Utilities Electricity Rates
Arizona Solar Incentives
Tucson homeowners have access to several solar incentives in Arizona that can meaningfully reduce the cost of going solar — from state tax credits to property and sales tax exemptions.
Arizona offers a residential solar tax credit worth up to $1,000, a full sales tax exemption on solar equipment, and a property tax exemption so your home’s increased value won’t raise your tax bill.
Note: the federal residential solar tax credit no longer applies. However, a 30% federal credit remains for battery storage. Homeowners who lease through Palmetto’s LightReach program benefit from Palmetto handling the commercial ITC, 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 |
| 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 Tucson (Pima County), the annual savings will depend on the size of the system and the local millage rate. 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 your local county assessor’s office to confirm the process in your jurisdiction 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 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. For Tucson residents served by TEP (Tucson Electric Power), the export rate is approximately $0.057/kWh (compared to a retail rate of ~$0.15/kWh).
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.
Because net billing export rates are significantly below retail electricity rates, the financial strategy for Tucson 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 your specific utility 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 QuoteTucson 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.
Tucson’s 300+ sunny days and high desert elevation make it one of the best U.S. cities for solar production — but even cloudier cities can generate surprising amounts of energy with the right system.
Solar Production in Tucson 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 Tucson
We’ve mapped thousands of solar installations across the U.S. — including right here in Tucson. 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 homes in that area have gone solar!
Leasing Solar Panels
If paying the full cost of a solar system upfront isn’t the right fit, Palmetto offers a solar lease through its LightReach program — available to Tucson homeowners served by Tucson Electric Power (TEP), as well as other Arizona utilities including APS, SRP, UNS Electric, Mohave Electric Cooperative, Trico Electric Cooperative, ED3, and ED4.
With a solar lease, you pay a fixed monthly amount — for example, $109/month for a typical medium-sized home in Tucson — rather than purchasing the system outright. Palmetto owns the panels, handles all maintenance and repairs, and backs the system with a 90% production guarantee. You simply pay your monthly lease and enjoy the savings on your electricity bill. To understand how a lease compares to other options, this guide on buying vs. leasing solar is a helpful starting point.
Compared to a cash purchase, leasing means no large upfront investment, no maintenance responsibilities, and no worrying about system performance over time. While a cash purchase may offer greater long-term savings, a lease makes solar accessible to homeowners who prefer predictable monthly costs and a hands-off experience from day one.
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 Tucson. With over 280 sunny days a year and 6.5 peak sun hours daily, Tucson is one of the best cities in the U.S. for solar production. Arizona also offers a $1,000 state tax credit, a sales tax exemption, and a property tax exemption — helping reduce the overall cost.
If upfront cost is a concern, Palmetto’s LightReach lease removes that barrier entirely. Tucson homeowners can go solar with no money down, starting at $109/month, and begin saving from day one — with no maintenance responsibilities.
Tucson is served primarily by Tucson Electric Power (TEP), which uses a net billing program — not traditional net metering. Under TEP’s program, excess solar energy exported to the grid is credited at approximately $0.0633/kWh, which is lower than the retail rate of ~$0.15/kWh. New customers are locked into their export rate for 10 years at interconnection.
Credits accumulate throughout the year and are trued up annually during your September billing cycle. If your credits exceed $10, your account resets to zero. Because export credits are well below retail rates, most Tucson solar owners benefit most by maximizing self-consumption or pairing solar with battery storage.
Yes, solar panels can increase your home value in Tucson. According to a Zillow study, homes with solar panels sell for approximately 4.1% more than comparable homes without them. For a $350,000 home in Tucson, that could mean roughly $14,000 in added value.
Arizona also offers a property tax exemption on the added value from solar, meaning your property taxes won’t increase — so you get the full benefit of the increased home value without the added tax burden.
With Palmetto’s LightReach lease, Tucson homeowners can go solar for as little as $109/month with no upfront cost. Palmetto owns and maintains the system, so there’s nothing to manage.
For those who prefer to purchase outright, a typical 8.5 kW system in Tucson runs approximately $23,173 after Arizona’s $1,000 state tax credit. Note that the federal 30% residential solar tax credit is no longer available following the Big Beautiful Bill. Use the calculator above for personalized pricing.
For many Tucson homeowners, solar is worth it financially — especially with Palmetto’s LightReach lease, which requires no upfront investment. Your monthly lease payment is typically less than your current electricity bill, meaning you can start saving from day one.
With Tucson’s 280+ sunny days and rising TEP electricity rates, the long-term value is clear. A typical medium-sized home can save an estimated ~$66,000 over 25 years — and with a lease, those savings begin immediately without any out-of-pocket cost.
We believe Palmetto Solar is the best choice for Tucson homeowners. As a national company with a local focus, we’ve completed 4,982 installations across Arizona since 2020 — with an approval rating over 85%.
We offer some of the best financing options in the industry, including our LightReach lease starting at just $109/month with no upfront cost. Our trusted install network handles everything, and we back every system with a 90% production guarantee.
With Palmetto’s LightReach lease, Tucson homeowners can go solar for approximately $109/month for a typical 8.50 kW system — with no upfront cost. One simple monthly payment covers the panels, installation, monitoring, maintenance, and a 90% Production Guarantee.
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 over cash purchases, where the residential ITC no longer applies. Most homeowners start saving from day one since the lease payment is typically less than their current electricity bill.