Tempe, AZ Solar Installation: 2026 Costs, Incentives & Savings
Solar Power in Tempe
With over 300 days of sunshine each year, Tempe is one of the best places in the country to power your home with solar energy. In fact, Arizona ranks third in the nation for residential solar installations, and it’s easy to see why so many local homeowners are choosing the sun.
Rising energy costs are another reason to consider solar. Arizona electricity prices climbed 22% from 2020 to 2024. If you’re curious about how solar could work for your home, our guide to home solar panels is a great place to start. Let’s explore what solar installation in Tempe looks like.
Arizona by the Numbers
- 3rd Most residential solar in the United States
- 295 Households have installed solar panels
- 6.4 Avg peak sun hours per day
- ~$62k Tempe average savings over 25 years
How Much Do Solar Panels Cost in Tempe, AZ?
See real solar costs for Tempe, built from our actual installation data across neighborhoods like Warner Ranch, South Tempe, Alta Mira, and Maple-Ash. This calculator uses firsthand local numbers—not estimates—to give you a clear, honest picture of what solar could cost at your home.
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
As low as
$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
Your total financial benefit
- Monthly Savings: Average utility bill reduction $143
- Payback Period: 11.1 years
- 25-Year Savings: $62,409
Palmetto Reviews
Palmetto installers were amazing. They kept us informed along the way and at the end, walked us through the solar installation showing us the wiring and placement of each panel. They ensured that the inspection was completed without a glitch.
Maria Martinez
Tempe, Arizona
I called Palmetto to get my part started, with the information about how things worked, information my local power company wanted and once everything was ready, to schedule the solar installation on my home. Every time I called I had a very pleasant experience. I am hard of hearing and everyone I talked to slowed down and spoke so I had no problem hearing them! They were all informative, helpful, and very kind. I am so pleased that I had the opportunity to work with Palmetto and I highly recommend them to everyone.
Lynda Mchugh
Mesa, Arizona
I had a solar panel system installed by Palmetto one year ago and so far, everything has been great.
Jeffrey Brown
Peoria, Arizona
Key Takeaways
- Tempe gets over 300 sunny days a year and averages 6.4 peak sun hours daily, making it one of the best places in the country for solar.
- Arizona electricity prices rose about 19% from 2021 to 2024, so generating your own power can help you rely less on the grid and stabilize costs.
- State and local incentives still help lower your costs, including Arizona’s tax credit, property and sales tax exemptions, and no-upfront-cost leasing through LightReach.
Tempe Electricity Prices
In sunny Tempe, understanding your electricity costs is the first step toward making smart, informed decisions about powering your home.
Electricity in Arizona has grown steadily more expensive. Local rates climbed from 12.5 cents per kWh in 2021 to 14.9 cents in 2024—roughly a 19% increase in just three years.
Price of Energy: Arizona vs National Average
0¢
10¢
20¢
30¢
- 2021: 12.5¢
- 2022: 13.0¢
- 2023: 14.0¢
- 2024: 14.9¢
- US Average: 16.5¢
Arizona Solar Incentives
Several solar incentives in Arizona can help Tempe homeowners lower the cost of going solar.
| Incentive | Type | Description | Source |
|---|---|---|---|
| Arizona Residential Solar Energy Credit | Tax Credit | Tempe 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, reducing the upfront cost of a solar system. | Learn More |
| Arizona Net Billing Policy | Net Metering | Arizona utilities have replaced traditional net metering with net billing, compensating solar homeowners for excess electricity exported to the grid at rates below retail. | Learn More |
| APS Storage Rewards Pilot | Rebate | Arizona Public Service (APS) customers can earn rewards for allowing APS to dispatch their battery during peak grid demand events. | Learn More |
Solar Panel Systems in Tempe
We’ve mapped solar installations across the country, right down to the neighborhood level. Explore the map below to see how many Tempe homes have switched to solar.
Solar Production in Tempe by Month
- System Size: 5 kW, 7 kW, 10 kW
- Daylight Hours
- Energy Production (kWh/day)
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.