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Typically, the number of solar panels needed in the U.S. to generate enough power for most households ranges from 17 to 21. Taking into account incentives, the cost of installation can fall anywhere between $16,870 and $23,170. As of April 2023, the average cost of solar panels in Arizona is $2.46 per watt. On average, a 5-kilowatt solar panel system in the state may cost between $10,455 and $14,145, with the average cost being $12,300. This is below the national average, which tends to be around $20,498.
Highlights & Key Takeaways
- For a 5-kilowatt solar panel system, the installation cost in Arizona can range from $10,455 to $14,145, with the average gross price being $12,300.
- Owning a solar energy system in Arizona can increase your home's value by over 4% and help protect you against future energy price increases.
- Assuming an average cost of $12,300, an Arizona solar panel system could pay for itself within seven to ten years.
- Solar panels in Arizona are a highly effective way to help reduce our demand on the environment and less use on the U.S. power grid.
How Much Do Solar Panels Cost in Arizona?
Arizona is well-known as the sunniest state in the U.S., with residents reveling in over 300 days of sunshine each year. And, of course, this abundance of sunshine helps explain why Arizona holds the reputation as the fifth-best state in the U.S. for solar panel installation.
However, as with any state, the cost of solar panels in Arizona varies depending on factors such as the size of the system, type of panel, and installation costs. That said, various resources state that the average cost of a 5-kilowatt solar panel system in Arizona ranges from $10,455 to $14,145, with the average gross price being $12,300. Of course, the cost could be higher or lower based on individual circumstances.
How Does the Current Cost of Solar in Arizona Compare to the National Average?
Arizona's favorable regulatory environment and abundant sunlight make it an attractive state for solar panel installation. The state offers various financial incentives and tax credits that make it easier for homeowners to access affordable solar panel installation options. And, to make it that much more appealing, the upfront costs for a typical 6-kilowatt system in Arizona vary between $10,455 and $14,145, making it lower than the national average that tends to run between $16,870 and $23,170. This adds to the sentiment that the long-term benefits of reduced energy bills and a clean energy future make it an intelligent investment for homeowners, especially in Arizona.
How Are Solar Costs Trending in Arizona?
According to data from ConsumerAffairs, the average cost of solar panel installation in Arizona has decreased significantly in recent years. In 2016, Arizona's average cost per watt for residential solar panels was $3.14, but by 2021, it had dropped to $2.57.
This cost reduction is tied to advances in solar technology, increased competition among solar installers, and the availability of various solar incentives and tax credits in Arizona. Overall, the trend suggests that Arizona's solar installation cost will continue to decrease, making it an attractive and cost-effective option for homeowners seeking to switch to clean energy.
Are Solar Panels in Arizona Less Expensive Than Electricity Bills?
Solar panels in Arizona can be less expensive than electricity bills. Arizona's average monthly residential electricity bill is around $141.16, which translates to an annual cost of $1,693.92. The average price of a 5-kilowatt solar panel system in Arizona ranges between $10,455 to $14,145.
Assuming an average cost of $12,300, the system could pay for itself within seven to ten years through savings on electricity bills. Additionally, Arizona offers various solar incentives and tax credits that can further reduce the cost of solar panel installation and make it even more cost-effective than traditional electricity bills.
How Much Money Can You Save by Going Solar in Arizona?
The amount of money you can save by going solar in Arizona depends on several factors, including the size of your solar panel system, your energy consumption, and the cost of electricity in your area. A 5-kilowatt solar panel system can generate around 7,246 kilowatt-hours (kWh) of electricity annually, resulting in annual savings of $878 to $1,026.
Over the lifetime of the solar panel system, typically 25 years, the savings can add up to $21,950 to $25,650. However, the actual savings can vary depending on various factors, such as the amount of sunlight your panels receive, your energy usage, and the cost of electricity.
How Long Does it Take to Pay Back Solar Panels in Arizona?
The payback period for solar panels in Arizona is typically around eight years, but this can vary based on factors such as the cost of the solar panel system, the amount of power it generates, and the homeowner's energy usage. Generally, the more energy a solar panel system generates, the faster it will pay for itself. In addition, the various solar incentives and tax credits available in Arizona can significantly reduce the initial cost of installation and further shorten the payback period.
Is It Better to Buy or Lease Solar Panels in Arizona?
Financing solar panels is a common approach for homeowners in Arizona who are ready to purchase. While leasing is also an option, owning the system can be a better long-term option for homeowners who want to increase the value of their homes, reduce electricity bills, and earn money through net metering.
The advantages of financing solar panels in Arizona include the following:
- Ownership allows homeowners to own their solar panel system, giving them complete control over their energy production and savings. They also have the opportunity to earn money through net metering and increase their home's value.
- While financing requires an upfront investment, the long-term savings, and benefits of reduced energy bills and protection against future price increases can make it a financially sound decision.
- Financing a solar panel system may make homeowners eligible for federal and state tax credits and other incentives, which can help offset the upfront costs of installation and financing.
The advantages of leasing solar panels in Arizona include the following:
- Leasing allows homeowners to avoid the upfront costs of purchasing and installing a solar panel system, making it a more accessible option for those who cannot afford the outright purchase.
- Many leasing agreements include maintenance and repair services, which can alleviate homeowners' burden and cost of upkeep.
- Leasing may be a good option for those who plan to sell their home soon, as it allows them to benefit from solar energy savings without committing to long-term investment.
What Determines the Cost of Solar Panels in Arizona?
Regarding solar panels in Arizona, several factors can impact the cost. These include equipment and installation costs and any incentives offered by the state. And you should know that the average cost per watt for solar panels in Arizona is $2.61, below the national average of $2.66 per watt.
Homeowners can take advantage of various incentives and tax credits offered by the state to reduce the cost of their solar panel system, which we’ll discuss in further detail below.
Solar System Size
The average size of a home in Arizona is 2,500 square feet, which consumes around 12,815 kWh of electricity annually. To meet this requirement, a 7.31 kW solar panel system is necessary. Using 400-watt (400 W) solar panels, homeowners need approximately 19 panels to provide sufficient energy to power their homes.
Off-Grid vs. On-Grid
Going off-grid or on-grid can significantly impact Arizona's solar panels cost. On-grid systems are connected to the local utility grid, allowing you to sell excess energy back to the utility company through net metering.
On the other hand, off-grid systems are not connected to the local utility grid and require battery storage to store excess energy for later use. This can increase the overall cost of the solar panel system since battery storage can be expensive. Off-grid systems are typically used in remote locations where connecting to the local utility grid is impossible. An off-grid system may not be the most cost-effective option since the state receives significant sunshine and has a well-established net metering program.
In most cases, an on-grid system is a more affordable option, allowing you to take advantage of the benefits of net metering and earn money through excess energy generation.
Type of Solar Panel Cell
The type of solar cell used in a solar panel system is crucial to Arizona's solar panels' cost. The two primary types of solar cells used are monocrystalline and polycrystalline. However, other types of solar panels are also available, such as thin film solar panels, bifacial solar panels, and concentrated solar panels, each with unique characteristics and cost implications.
- Monocrystalline solar cells are more expensive to produce as they are made from a single, pure silicon crystal and are generally more efficient and durable than polycrystalline cells.
- Polycrystalline solar cells are less expensive as they are made from multiple silicon crystals. However, they are typically less efficient and less durable than monocrystalline cells.
- Thin-film solar cells deposit a thin layer of photovoltaic material onto a substrate, are less efficient than their counterparts, and are not as widely used.
Solar Panel Brand and Quality
Better quality solar panels often come with a higher cost but are usually associated with more extended warranties and better energy production rates. According to EnergySage, the most highly recommended solar panel brands, such as LG, Panasonic, and SunPower, tend to be pricier but are known for their high efficiency, durability, and reliability.
Other brands that are worth considering include ADT Solar and NRG Solar. Consider the manufacturer's reputation and track record when choosing a solar panel brand. Investing in a well-established and trustworthy company can bring peace of mind and long-term savings.
Solar Power Incentives
Arizona offers several incentives that can help lower the solar panel investment cost.
- Inflation Reduction Act (IRA) - Qualified homeowners with home solar may be eligible for a tax credit of up to 30% against the cost of the system.
- Arizona Residential Solar Energy Tax Credit - The 25% state solar tax credit is available for purchased home solar systems in Arizona, providing up to a $1,000 personal income tax reduction.
- Energy Equipment Property Tax Exemption - Property tax exemption on the added home value from the rooftop panel system.
- Solar Equipment Sales Tax Exemption - 5.6% home solar system state sales tax exemption.
Roof Condition and Setup
Various factors, including the position of your home, roof age, pitch, and condition, influence the efficiency of a solar energy system. Roofs facing south or with a steep slope tend to have higher efficiency. However, shading from nearby buildings or trees can reduce the efficiency of the solar panels. If your roof is old or damaged, it may require repairs or replacement before solar panel installation.
Installation Company
Solar panels are a significant financial endeavor, costing Arizona residents an estimated $12,300 in upfront costs. Homeowners must do their homework when finding the right installer. An inexperienced installer may incorrectly assess the condition of your roof or install the panels at the wrong angle for your location, which can result in reduced energy output. Additionally, they may use equipment not in good repair or cut corners during installation, leading to lower system efficiency and potential issues later.
Permitting Costs
In most cases, the cost of obtaining building permits for installing your solar panels will be built into the installation costs. Individual municipalities determine the process of obtaining permits for PV (photovoltaic) system installations in Arizona, but all installations require building permits.
The average cost of a building permit for solar installation in Arizona is around $350, above the national average of $300. However, the price can vary depending on which city you live in. For example, the cost for a solar permit in Phoenix can range from $225 up to $600, while in Scottsdale, the price for residential systems is only $150.
Solar Panel Financing
Lenders such as LightStream, Credible, SoFi, and Upgrade offer some of the best solar panel loans. The interest rates for solar panel loans vary depending on the lender, loan amount, and borrower's credit score, typically ranging from 3% to 8%. However, rates can be higher. Borrowers with excellent credit scores or those who opt for shorter loan terms may be eligible for lower interest rates. It's advisable to compare loan offers from multiple lenders to determine the most favorable interest rate and terms for your solar panel financing.
Average Solar Panel Costs in Arizona
Solar panel costs in Arizona are influenced by the type of solar panels used, installation costs, incentives, and permits. The average cost of solar panel installation in Arizona ranges from $10,455 and $14,145 before incentives. However, the mentioned incentives and rebates can significantly reduce the overall cost.
Average Solar Panel Cost in Arizona by System Size
The average cost of solar panels in Arizona varies depending on the system size. Generally, a small 4 kW system costs around $9,840 before incentives, while a larger 10 kW system costs around $24,600. The cost per watt ranges from $2.68 to $3.38. Remember that these costs are before any incentives or rebates are applied, which can significantly reduce the total cost.
Average Solar Panel Cost in Arizona by Type
Monocrystalline and polycrystalline solar panels are popular options for Arizona solar panel systems. Monocrystalline panels are typically more expensive, ranging from $200 to $315 per panel, but can have higher efficiency and longevity. Polycrystalline panels are slightly less expensive. Thin-film panels are the most budget-friendly option, with an average cost of around $150 to $250 per panel.
Average Solar Panel Cost per Watt in Arizona
Monocrystalline panels, which are highly efficient, tend to be the most expensive, with a price range of $.32 to $1.50 per watt. Polycrystalline panels, while less efficient, are less expensive and typically cost between $0.70 and $1.00 per watt. Thin-film panels are the least expensive option, with a price range of $0.43 to $0.70 per watt, but they are also the least efficient.
Average Cost of Solar Panels Per Square Foot in Arizona
Arizona's average home size is between 1,763 and 1,879 square feet. Based on national pricing data, the average cost of solar panels per square foot for a home of this size is estimated to be between $7,000 and $12,500.
| Home Size in Square Feet | Average Cost of Solar Panels |
| 1,000 | $5,000 to $6,000 |
| 1,500 | $7,000 to $9,000 |
| 2,000 | $10,500 to $12,500 |
| 2,500 | $13,000 to $16,000 |
| 3,000 | $17,000 to $20,000 |
Average Labor Cost of Solar Panel Installation in Arizona
Installing solar panels requires specialized skills; attempting the installation yourself is not recommended. Solar panel installers need expertise in electrical wiring, basic construction, reading and interpreting design plans, performing electrical testing, and using various hand and power tools. Additionally, installers must possess practical skills such as working at heights, physical strength and stamina, attention to detail, and excellent communication skills to interact effectively with customers and team members.
For this reason, you can’t hire just any contractor to do the job. But on average, the cost to install solar panels in Arizona will fall between $12,900 and $15,180, according to Fixr.
| National average cost | $14,040 |
| Average range | $12,900 to $15,180 |
| Low-end | $4,300 |
| High-end | $48,000 |
Average Cost to Run and Maintain Solar Panels in Arizona
The maintenance cost for Arizona solar panels is typically lower than for conventional energy systems. Solar panels require minimal maintenance, but it is crucial to keep them clean and clear of debris. Cleaning can be done by washing them with water once or twice a year.
Nevertheless, it's essential to have a professional inspection done every few years if not more frequently, to ensure the panels are working optimally. A professional inspection usually ranges from $150 to $300.
How to Calculate the Cost of Solar Panels for Your Arizona Home
To estimate the solar panels cost for your Arizona home, follow these steps.
- Determine your energy usage by checking your electricity bills for the past year
- Calculate the system size by dividing your average monthly usage by 30 to get your daily energy usage in kWh. Next, divide this number by the hours of sunlight you get daily in your location, which you can find online. The result is the size of the solar panel system you need in kilowatts (kW).
- Estimate the system's cost. As a frame of reference, in 2021, Arizona's average cost per watt for residential solar panels was $2.57.
- Factor in installation costs using a guide of $2 to $5 per watt.
- Calculate tax incentives and rebates.
- Do the math on your payback period by dividing the total cost of your system (including installation costs and tax incentives) by your estimated annual energy savings.
Tips for Getting the Best Price on Solar Panels in Arizona
Research and shop around for the best upfront costs on Arizona solar panels. Here are a few tips to help you save money:
- Research and compare - Research and compare solar panel installation companies to find the best pricing, warranties, and equipment offered.
- Take advantage of incentives - Arizona offers various incentives, including tax credits and rebates, to reduce the overall cost of installation.
- Consider financing options - Many solar panel installation companies offer financing options to help you spread the installation cost over time. Choose the one that fits your budget.
- Purchase during the off-peak season - Consider purchasing during the off-peak season when prices may be lower.
- Negotiate - Feel free to negotiate with the installation company to get the best deal possible. Ask for discounts or negotiate the price.
Are Solar Panels Worth the Cost in Arizona?
The cost of solar panels is a significant factor when investing in Arizona's solar energy. However, solar panel costs have trended downward, making it a more appealing option for homeowners. If you are interested but worried about the upfront costs, solar panel financing can make the investment easier to handle.
Here are some pros and cons to consider:
Pros
- Solar energy is a viable option throughout the year in Arizona.
- Solar energy is renewable and clean and helps reduce greenhouse gas emissions to combat climate change.
- Installing solar panels can reduce electricity bills and earn credits through net metering programs.
- Solar panels can increase home value, and homes with solar panels sell for more money.
- Arizona offers various tax credits, rebates, and incentives for solar panel installations.
Cons
- Solar panels require a significant upfront investment, and it may take several years to see the return on investment.
- Panel installation requires space, and not all roofs suit solar panels.
- Regular maintenance is required for solar panels, which can be costly.
- Solar panels produce less energy during cloudy or rainy weather.
- Solar panel installation may require permits and approval from homeowners associations, adding additional costs and time.
Ways to Finance Solar Panels in Arizona
Various lenders are available to help you finance your solar panels in Arizona. Here are some of our favorites.
- Rocket Loans - Offers an easy application process with rates as low as 5.970% with borrowing limits as high as $45,000.
- Upgrade - A great option for those with fair credit who want to experience solar energy's benefits. Though the APR may be higher, borrowers can often get up to $50,000 to finance their solar panel purchase.
- LightStream - Offers rates as low as 2.99% for those demonstrating good creditworthiness, with borrowing limits as high as $100,000.
Final Word
The cost of solar panels in Arizona can vary depending on system size, panel type, and installation method. However, with the state's incentives and tax credits, solar energy systems have become more affordable and attractive to homeowners in Arizona. To get the best price on solar panels, compare quotes from multiple solar panel installers, explore financing options from reputable lenders like Rocket Loans, Upgrade, and LightStream, and maintain the system to enhance its lifespan and enhance efficiency.
