How Much Do Solar Panels Cost in Arizona?
Solar panels can save you a ton of money on your electric bills, but how much do they cost to install?
It’s a tough question to answer. Solar panel installation costs can vary significantly from one place to another and can even be drastically different for two houses in the same neighborhood.
The best way to find out how much solar panels will cost for your home is with a personalized estimate. But looking at average costs can help you prepare. In this guide, we break down everything you need to know about the cost of solar panels in Arizona to help you decide whether they’re worth it for your home.
Average Cost of Solar Panels in AZ
There’s a lot of misinformation out there about residential solar installation costs in Arizona, and it’s hard to nail down the truth. Some experts say that solar will cost you around $2.00 per watt in AZ, while others place the costs at around $2.60 per watt. The range is natural—solar installation costs depend on a long list of variables and are constantly shifting. Regardless, Arizona solar costs are undeniably lower than the national average, which is $3.25 per watt, according to the Solar Energy Industries Association.
But what do those numbers mean for you? If we take a conservative approach and assume $2.60 per watt, you could expect to pay $18,200 for a 7 KW rooftop solar system, which is a pretty standard size. Once you take the solar tax credit into account (more on that below), that number comes down to $12,740.
Arizona Solar Trends: Is the Price of Solar Panels Dropping?
The cost of solar panel installation has decreased dramatically over the past decade. In Arizona, solar prices have fallen by 43% over the past 10 years.
Meanwhile, electricity rates have been rising steadily. The average cost of electricity in Arizona rose from 13.83 cents per kW to 14.85 cents per kW between August 2023 and August 2024, according to data gathered by the US Energy Information Administration. That’s a 7.1% increase in just one year!
Going solar protects you against rate increases so you never have to worry about inflation and price hikes driving up your electricity costs.
What Affects the Cost of Solar Panels in Arizona?
Many factors impact solar installation costs in Arizona, including:
System Size & Complexity
Solar panel installation costs depend heavily on the size and complexity of your project. If you live in a big house with an intricate or poorly angled roof, for example, you will need a large solar system and a complicated design, which will increase your costs. If you live in a small home with a simple roof, or if the angle of your roof is ideal for solar production in your area, you will need fewer solar panels and a less complicated design, which will ultimately cost less.
The type of home solar system you’re interested in also impacts the cost. Rooftop solar panels are more significantly more affordable than ground-mounts and grid-tied systems cost less than off-grid systems.
Solar Panel Type & Brand
The type and brand of solar panels you choose to install will impact your cost as well. There are many solar panel, inverter, and battery manufacturers out there. Quality—and cost—varies by brand. We are committed to installing high-quality solar products, but we are not tied to any one manufacturer. We offer a variety of options and will recommend the best fit for your needs and budget.
Solar Batteries
Solar battery storage is an optional addition to your solar panel system. With a battery, you will be able to use your solar panels during a power outage, which is an invaluable benefit. But, batteries are an investment and they will add to the cost of your solar panel installation.
Solar Installation Company
There are many solar panel installation companies in Arizona, and rates vary from one to the next. It’s always a good idea to contact several companies and compare quotes when making a large purchase, and solar panels are no exception. But keep in mind that you’re looking for the best value, not the lowest cost. A high-quality solar installer may charge more, but they won’t damage your roof or leave you with a half-finished system they never come back to complete.
How to Pay for Solar: Financing Options
How you pay for your solar panels will impact the overall cost of your installation.
Cash Payment
When you pay cash, you own the system outright. It requires an upfront investment but is the lowest-cost option with the highest return because you don’t have to pay fees or interest.
Solar Loan
With a loan, you’ll own your system without having to pay for it all at once. But, you will have to pay interest. A home equity line of credit is usually the best option for a solar loan. Private loans tend to have higher interest rates and stricter terms.
Solar Lease
Leasing solar panels is an option, but in many cases it is not the best option in the long term. When you lease solar panels, a third party owns the system and you pay them to use the power it generates. It sounds like an attractive option, but leases offer the lowest overall return on investment and can come with pretty unfavorable terms.
Residential Solar Incentives in Arizona (2025)
Solar panels save you money, but the benefits are far greater than individual energy savings. Because they have such widespread benefits, the federal government offers incentives to reduce your solar power system installation costs.
The Federal Solar Tax Credit
The solar tax credit (also known as the investment tax credit) is a solar incentive that reduces your federal tax liability by 30% of your solar installation costs. With the tax credit, you essentially earn back 30% of your upfront investment when you file your tax return for the year you install your solar panels. Check out our Guide to the Federal Solar Tax Credit to learn more.
Arizona Solar Tax Credit
Arizona homeowners are eligible for an additional state tax credit worth 25% of your installation costs, up to $1,000.
Solar Sales Tax Exemption
Solar panels and battery storage systems are exempt from sales tax in Arizona.
Energy Equipment Property Tax Exemption
Solar panels can increase your home’s value, but they won’t increase your property taxes.
The Bottom Line: Are Solar Panels Worth the Cost in Arizona?
When you take all the factors into account, solar panels are worth the cost in Arizona. Solar installation costs have decreased steadily in recent years while electricity rates have only gone up. Meanwhile, the solar tax credit is the highest it has ever been, making now an extremely opportune time to buy solar panels.
SouthFace Solar & Electric is the leading local solar installer in Arizona. Our goal is to provide the most accurate and up-to-date information about solar energy in Arizona so you can make an informed decision when investing in solar panels for your home.
If you have any questions about home solar panel installation, we are always here to help. Give us a call or request your free solar estimate and we’ll create a customized proposal based on your specific needs.
