Phoenix, AZ Solar Installation: 2026 Costs, Incentives & Savings
Solar Power in Phoenix
With more than 300 sunny days each year, Phoenix is one of the sunniest regions in the country, making it well-suited for solar. In fact, Arizona ranks 3rd in the nation for residential solar installations.
As Arizona electricity prices have climbed 22% from 2020 to 2024, more Phoenix families are looking for ways to manage their energy costs. This guide explains what to know about home solar panels and how solar installation works in the Valley of the Sun.
ARIZONA by the Numbers
- 3rd Most residential solar in the United States
- 295 Households have installed solar panels
- 6.5 Avg peak sun hours per day
- ~$63k Phoenix average savings over 25 years
How Much Do Solar Panels Cost in Phoenix, AZ?
Curious about solar costs in Phoenix? This calculator uses real installation data from our projects across the Valley—including Scottsdale, Tempe, Mesa, Chandler, and Glendale. Get a local, data-driven estimate built from actual homes in your area, so you can explore what solar might look like for you.
System Size
This system size is designed to offset approximately 100% of the average electricity usage for a home of this size in Arizona.
Recommended System
- 8.20 kW
Your Monthly Payment
Estimated monthly cost with LightReach: $105/mo
Cost Breakdown
Your estimated investment:
- System Cost: $23,405
- Price per Watt: $2.85
- State Incentives: -$1,000
- Final Cost: $22,405
Savings
- Monthly Savings: $144
- Payback Period: 10.9 years
- 25-Year Savings: $63,153
Key Takeaways
- Phoenix is one of the sunniest places in the country, with over 300 sunny days and 6.5 peak sun hours a day, making solar highly productive.
- Arizona electricity prices rose about 19% from 2021 to 2024, so producing your own power can help you lock in more predictable, stable monthly energy costs.
- Arizona still offers state and local solar incentives, including a state tax credit, property and sales tax exemptions, plus leasing options with no upfront cost.
Phoenix Electricity Prices
Electricity costs are a growing concern for Phoenix households, and understanding the trend can help you plan for the years ahead.
Arizona electricity prices have climbed steadily, rising from 12.5 cents per kWh in 2021 to 14.9 cents per kWh in 2024. That is roughly a 19% increase in just four years.
Solar offers Phoenix homeowners a way to manage these rising costs. By producing your own power, you can rely less on the grid and gain more predictable monthly energy expenses over time.
Price of Energy: Arizona vs National Average
| Year | Arizona | US Average |
|---|---|---|
| 2021 | 12.5¢ | 16.5¢ |
| 2022 | 13.0¢ | - |
| 2023 | 14.0¢ | - |
| 2024 | 14.9¢ | 16.0¢ |
Source: US Bureau of Labor Statistics, Energy Information Administration, Form 861
Phoenix Area Utility Providers
In Phoenix, two main utilities power most homes: APS and SRP. In 2023, APS charged about 15.3¢ per kWh, while SRP averaged 12.5¢ per kWh.
Phoenix Utilities Electricity Rates
| Provider | Rate (¢/kWh) |
|---|---|
| APS | 15.30¢ |
| SRP | 12.50¢ |
| AZ Avg | 14.00¢ |
| US Avg | 16.0¢ |
Source: US Energy Information Administration, 2023, Form 861, Table 6
Arizona Solar Incentives
Several solar incentives in Arizona can help Phoenix homeowners lower the cost of solar installation through state and local programs.
| Incentive | Type | Description | Source |
|---|---|---|---|
| Arizona Residential Solar Energy Credit | Tax Credit | Arizona homeowners can claim a state income tax credit equal to 25% of their solar system’s installed cost, up to a maximum of $1,000 per year, with unused credit carried forward for up to five years. | Learn More |
| Arizona Solar Property Tax Exemption | Property Tax Exemption | Under Arizona law, the added value a solar energy system contributes to a home’s assessed value is fully excluded from property tax calculations. | Learn More |
| Arizona Solar Sales Tax Exemption | Sales Tax Exemption | Arizona exempts residential solar equipment and installation from the state’s 5.6% Transaction Privilege Tax (sales tax). | Learn More |
| Arizona Net Billing Policy | Net Metering | Compensates solar homeowners for excess electricity exported to the grid at rates below retail. | Learn More |
| APS Storage Rewards Pilot | Rebate | APS customers with qualifying home battery storage systems can earn approximately $110 per average kW contributed per season. | Learn More |
Solar Panel Systems in Phoenix
Phoenix enjoys over 300 sunny days yearly and intense desert sunlight, making it ideal for solar. Summer heat can slightly reduce panel efficiency, but year-round production remains impressively strong here.
Solar Production in Phoenix by Month
| Month | System Size | Energy Production (kWh/day) |
|---|---|---|
| July | 10 kW | 50.8 |
| December | 10 kW | 37.8 |
What Can Your Solar System Power?
Summer Production (July)
- 3.4 average homes (15 kWh/day per home)
- Run central AC for 16 hours AND power all other appliances
- Fully charge 5.1 Tesla Model 3 electric vehicles
Winter Production (December)
- 2.5 average homes (15 kWh/day per home)
- Keep your home heating system running for 18 hours
- Fully charge 3.8 Tesla Model 3 electric vehicles
Annual Production
- Over a year, your 10 kW system could:
- Offset 12 tons of carbon dioxide emissions
- Equal the environmental benefit of planting 212 trees
Leasing Solar Panels
In Phoenix, homeowners can go solar through a LightReach solar lease. With a lease, you pay a fixed monthly amount instead of buying the system outright, so there’s no large upfront cost to plan for.
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!