Are Solar Panels Worth It in Arizona? 2026 Cost & Payback
The average Arizona residential electricity customer uses about 1,075 kWh a month and pays 15.55¢ per kWh — roughly $167 a month. Covering that takes a 7.0 kW system costing about $19,388, which pays for itself in about 13 yr 6 mo.
- Payback
- 13 yr 6 mo
- from switch-on
- System size
- 7.0 kW
- to cover annual use
- Up-front cost
- $19,388
- no federal credit available
- 25-yr net gain
- $20,974
- after paying it off
#29 of 51 states by payback period — worse than the national median of 13 yr 6 mo. Best is Maine at 7 yr 4 mo. See full rankings.
Price is the deciding factor here.
At the modelled installed price of $19,388, payback is 13 yr 6 mo. It reaches 10 years at about $13,811 installed — $5,577 below our baseline, or roughly 29% off.
Your 10-year target price: $13,811
Compare local solar quotes. We do not yet have a quote partner we are willing to send you to, so there is no button here. Take the target price above to two or three local installers and compare against it.
Worth doing only if the quotes come in under that number.
Solar payback calculator — Arizona
Adjust any input to see how the payback period moves.
Pays for itself in
13 yr 7 mo
from switch-on
25-year net gain
$20,852
after paying it off
System size
7.0 kW
Up-front cost
$19,372
Year 1 savings
$1,258
Year 1 output
12,887 kWh
Federal residential clean-energy credit: 0% for new 2026 installations. The federal Residential Clean Energy Credit (IRC §25D) is not available for a system whose installation is completed after 31 December 2025. What counts is when installation is finished, not when you paid. Why.
The numbers behind it
| Average electricity rate | 15.55¢ / kWh |
|---|---|
| Peak sun hours per day | 6.75 hours |
| Annual yield per kW installed | 1,831 kWh |
| Average residential electricity use | 1,075 kWh / month |
| System size needed | 7.0 kW |
| Installed cost per watt | $2.75 |
| Gross system cost | $19,388 |
| Federal residential clean-energy credit | None (§25D unavailable for 2026 installations) |
| Net up-front cost | $19,388 |
| First-year output | 12,900 kWh |
| First-year savings | $1,262 |
| Solar export policy | Utility-specific export rate |
| Value of exported power | 5.94¢ / kWh (~38% of retail) |
| Payback period | 13 yr 6 mo |
| 25-year net gain | $20,974 |
Price is the deciding factor here.
At the modelled installed price of $19,388, payback is 13 yr 6 mo. It reaches 10 years at about $13,811 installed — $5,577 below our baseline, or roughly 29% off.
Your 10-year target price: $13,811
Compare local solar quotes. We do not yet have a quote partner we are willing to send you to, so there is no button here. Take the target price above to two or three local installers and compare against it.
Worth doing only if the quotes come in under that number.
Net metering in Arizona
Arizona sets export rates utility by utility rather than statewide, so what an exported kilowatt-hour earns depends on who bills you. The figure here is a baseline drawn from published utility export tariffs, not a statewide rate.
Common questions
How much do solar panels cost in Arizona?
At around $2.75 per watt installed, the 7.0 kW system a typical Arizona home needs works out to roughly $19,388 before any incentives. The federal Residential Clean Energy Credit (IRC §25D) is not available for a system whose installation is completed after 31 December 2025. That makes it the net price too.
How long do solar panels take to pay for themselves in Arizona?
About 13 yr 6 mo. That accounts for panel output falling roughly 0.5% a year and utility rates rising around 2.5% a year, which pull the answer in opposite directions.
Does Arizona have net metering?
Arizona sets export rates utility by utility rather than statewide, so what an exported kilowatt-hour earns depends on who bills you. The figure here is a baseline drawn from published utility export tariffs, not a statewide rate. Export compensation can vary by utility, tariff, installation date and customer class; this page uses the published 2026 baseline described in our methodology.
How much will I save over 25 years in Arizona?
Roughly $20,974 after the system has paid for itself — about 108% return on the up-front cost. Savings are larger if electricity prices rise faster than 2.5% a year.
Is Arizona sunny enough for solar?
Arizona averages about 6.75 peak sun hours a day, and a well-oriented array there yields roughly 1,831 kWh per kW installed each year. Sunlight matters less than most people assume — electricity price is the bigger driver, which is why cloudy, expensive states often beat sunny, cheap ones.
How we calculate this
We model 25 years one year at a time rather than dividing cost by first-year savings. Panel output falls 0.5% each year and electricity prices rise 2.5% each year, so the payback figure reflects both.
Production uses the modelled AC yield for Arizona rather than a flat efficiency factor. A peak-sun-hours approximation runs about 9% high, which is enough to make payback look a year faster than it is.
We assume 40% of generation is used in the home as it is produced, with the rest exported and credited according to the state's net metering rules.
Data vintage: Electricity: EIA Electric Power Monthly Table 5.6.B (residential, May 2026 YTD). Solar resource: PVGIS v5.3 (EU JRC), ERA5 2005-2023. Gasoline: AAA state averages. Natural gas: EIA residential by state. Heating degree days: NOAA CPC population-weighted normals. Residential consumption: EIA Electric Sales, Revenue, and Average Price Table 5.A, average monthly kWh per residential customer, 2024. Vehicle miles: FHWA Highway Statistics 2023. Retrieved 2026-08-03/04 and 2026-08-21. Install costs, net-metering status, time-of-use spreads and outage hours remain estimates.
How Arizona compares
| # | State | Payback period |
|---|---|---|
| 1 | Maine | 7 yr 4 mo |
| 2 | Massachusetts | 7 yr 8 mo |
| 3 | New York | 7 yr 9 mo |
| 4 | Rhode Island | 7 yr 9 mo |
| 5 | New Hampshire | 8 yr 3 mo |
| 6 | New Jersey | 8 yr 11 mo |
| 7 | District of Columbia | 9 yr |
| 8 | Hawaii | 9 yr 4 mo |
| 9 | Pennsylvania | 9 yr 5 mo |
| 10 | Maryland | 9 yr 5 mo |
Computed from the same model as this page. Full national findings · how this is calculated · data sources