State solar profile · #3 of 51
Solar in Arizona: cost, payback & incentives
What a typical home should expect from solar in Arizona - sunshine, electricity rates, modeled payback, and the 4 incentive programs that change the math, built from NREL, EIA, and DSIRE data.
- 6.5
- kWh/m²/day irradiance
- 13.5¢
- avg electricity rate
- 10.3 yr
- payback (#8)
- 4
- incentive programs
The verdict
Arizona scores 61/100 for solar - #3 of 51 - with a modeled 10.3-year payback and roughly $22,525 net over 25 years on a typical 6 kW system before any incentives.
- 61/100
- solar score (#3)
- 10.3 yr
- modeled payback (#8)
- $1,537
- modeled annual savings
- full
- net-metering policy
All figures are modeled from public NREL/EIA/DSIRE data for a typical 6 kW system; your result depends on roof, shading, utility tariff, and installer pricing.
Arizona at a glance
6.5
irradiance (kWh/m²/day)
13.5¢
electricity rate (per kWh)
$15,900
6 kW system cost
10.3 yr
est. payback (#8)
11,388
kWh/year (6 kW)
$1,537
annual savings
25-year ROI for a 6 kW system
$15,900
system cost
$1,537/yr
modeled savings
10.3 yr
break-even
+$22,525
25-year net
Estimates from state averages; actual results vary by system size, roof orientation, shading, utility rate, and installer pricing. Run a personalized estimate →
Installed solar capacity in Arizona, 1997–2024
Total solar nameplate capacity in Arizona reported to the EIA, utility-scale and reported distributed systems.
Where Arizona sits nationally
Every state by sunshine (left-to-right) and payback speed (faster toward the bottom). Arizona is highlighted, its position shows whether sun or electricity rates drive its return.
Arizona (highlighted): 6.5 kWh/m²/day, 10.3-yr modeled payback - faster than the national average.
What the data says about solar in Arizona
Arizona ranks #3 of 51 with a composite solar score of 61/100 (Strong). The score blends inputs from NREL and EIA: average irradiance of 6.5 kWh/m²/day, residential electricity at 13.5¢/kWh, a turnkey 6 kW installed cost of $15,900 ($2.65/W), and 4 tracked state and utility incentive programs.
On those inputs, a 6 kW array here is modeled to generate roughly 11,388 kWh/year and offset about $1,537 in annual utility spending at the state's average rate, an estimated 10.3-year simple payback (#8 of 51 for speed to break-even) and a projected +$22,525 net position over a 25-year horizon before utility-rate escalation.
Policy matters as much as physics. Arizona's net-metering framework is classified as full, which governs how exported generation is credited, and its renewable portfolio standard is: Mandatory (15% by 2025). The 4 active programs tracked in DSIRE include tax exemption, net metering, rebate and tax credit types, each can stack to compress payback. Notable programs include APS Renewable Energy Incentive Program. Note that the 30% federal residential solar tax credit (§25D) ended for systems placed in service after December 31, 2025, so state and utility incentives now carry more of the economics, confirm current federal rules with the IRS and your tax advisor.
Solar & grid details
- Net-metering policy
- full
- Renewable portfolio standard
- Mandatory (15% by 2025)
- Installed cost / watt
- $2.65/W
- Annual production (6 kW)
- 11,388 kWh
- Installed capacity (EIA 2024)
- 5.3 GW
- Notable programs
- APS Renewable Energy Incentive Program
Top incentive programs
4 programs available for Arizona residents
All Arizona solar incentives (4)
AZ Solar Property Tax Exemption
Full property tax exemption
Solar equipment added to a home is fully exempt from Arizona property tax assessment.
Net meteringAZ Net Energy Metering
Retail rate credit
Customers receive bill credits at retail rate for excess solar generation exported to grid.
RebateAPS Renewable Energy Incentive Program
$75/kW AC
Arizona Public Service offers upfront rebate for grid-tied solar installations.
Tax creditAZ Residential Solar Tax Credit
25% of cost, max $1,000
State income tax credit of 25% for residential solar systems, up to $1,000 per year.
Your next step
How to act on Arizona's numbers.
- Run the savings calculator with your real electricity bill, the figures above use state averages, not your usage. Calculate for Arizona
- Check net-metering and SREC value before signing, in a "full" state, export compensation often decides the return. Net-metering guide
- Stack Arizona's 4 incentive programs, each lowers net cost or raises annual return. See all programs
Modeled estimates from public data, not financial advice; a binding figure requires a site-specific assessment from a licensed installer.
Solar resource from NREL; electricity rates and installed capacity from the U.S. EIA; incentive programs from DSIRE. See our methodology.