3 Reasons Why 2025 Is the Best Year to Invest in Residential Solar
Thinking about installing solar panels for your home? There may never be a better time. There are currently excellent incentives available for solar panel installation, but they won’t be around forever. Meanwhile, electricity rates are climbing, and the longer you wait to go solar, the more money you’re throwing at your electricity provider.
1. Huge Incentives Make Solar Panels More Affordable
There are many financial incentives available to homeowners that make going solar more affordable. The solar incentive landscape has changed several times over the past few years, but it’s currently strong, especially in Arizona. Both the federal solar tax credit and the Arizona state tax credit are in full swing right now, saving you thousands of dollars on home solar.
- Federal Solar Tax Credit (ITC): The federal government currently offers a 30% tax credit for solar panel installations. This means you can reduce your federal tax liability by 30% of your solar installation costs for the year you install your system, saving you thousands of dollars on home solar.
- Arizona Solar Tax Credit: On top of the federal incentive, Arizona offers a $1,000 state tax credit for residential solar installations.
Combined, these tax credits drastically reduce your upfront investment and shorten the time it takes to see a positive solar panel return on investment. However, they won’t last forever. The federal solar tax credit is currently set to phase out in 2035, and the new administration may introduce policy changes that reduce or eliminate it sooner. If you wait too long to go solar, you risk missing on on substantial savings.
2. Electricity Rates Are on the Rise (And So Is Our Electricity Usage)
If you pay an electric bill, you know rates are going up. Residential electricity rates in Arizona jumped from 14.55 cents/kWh in November 2023 to 15.17 in November 2024. Meanwhile, we just experienced our hottest summer on record. Rising electricity rates coupled with rising temperatures can only mean one thing—outrageous electric bills, especially during the summer.
When you install solar panels, you can produce your own power, reducing or even eliminating your electricity costs. They also shield you against rising rates, saving you even more over their 25+ year lifespan. But the longer you wait to go solar, the more you’ll pay for grid-generated electricity, and the more savings you’ll miss out on.
3. Solar Installation Costs Are Coming Down
Solar panels are an investment, but the cost to install them has dropped dramatically in recent years. In Arizona, solar installation costs have fallen by 37% over the past 10 years. This is due, primarily, to technological advancements that have made it easier and cheaper to manufacture solar panels. Those same advancements have also improved solar panel efficiency and performance, leading to better electricity output and greater savings.
Ready to Get Started?
If you’re ready to take control of your electric bills, reduce your reliance on the grid, and protect your home with reliable, affordable power, SouthFace Solar & Electric can help. We’re a locally owned solar company in Arizona that’s been installing residential solar panels since 2008. We install personalized solar power systems that are designed to cover 100% of your electricity usage and deliver more power to you. Whether you’re interested in rooftop solar, ground-mounts, or an off-grid system, we can help you find the right fit for your home.
