Arizona Solar Panel Savings Calculator

Arizona Solar Panel Savings Overview

Arizona receives an average of 6.5 peak sun hours per day, making it an excellent state for solar energy production. With electricity rates averaging 13.1¢ per kWh — below the national average — longer payback periods are typical but savings still add up over time. The typical Arizona homeowner with a 6kW system can expect to save approximately $1,650 per year.

Solar Energy Production in Arizona

A standard 6kW residential solar panel system in Arizona produces approximately 11,388 kWh per year. This accounts for a system efficiency factor of 80%, which includes panel degradation, inverter losses, and temperature effects. With 6.5 peak sun hours, Arizona ranks among the top states in the country for solar production potential.

Arizona Electricity Rates and Solar Context

The average residential electricity rate in Arizona is 13.1¢ per kWh according to EIA data. While this rate is below the national average, electricity costs are rising approximately 2-3% per year. Over a 25-year system lifetime, your cumulative savings will still be substantial. With utility rates increasing annually, your solar savings grow each year.

Arizona Solar Incentive Programs

25% state tax credit (up to $1,000). Residential Arizona Solar Tax Exemption. Federal 30% ITC. All Arizona residents are eligible for the federal 30% Investment Tax Credit (ITC), which reduces the cost of a solar system by 30% of the total installed price. Arizona also offers avoided cost net metering, allowing homeowners to earn credits for excess solar energy sent back to the grid.

Net Metering in Arizona

Arizona has avoided cost net metering, which is a significant financial benefit for solar homeowners. Under the avoided cost model, you receive credit at the utility's avoided cost rate for excess energy, which is typically lower than the retail rate but still provides meaningful savings.

Best Cities for Solar in Arizona

The best cities for solar panels in Arizona include Phoenix, Tucson, Mesa, Scottsdale, Tempe. Solar production can vary by location within the state due to differences in cloud cover, local shading, and microclimates. Southern-facing roofs with minimal shading produce the most energy. Homeowners in Phoenix and Tucson can typically expect production close to the state average of 6.5 peak sun hours per day.

How Arizona Compares to Neighboring States

Compared to neighboring states, Arizona (13.1¢/kWh, 6.5 sun hours) has better sun exposure and has lower electricity rates. See how solar savings compare in California, Nevada, and Utah.