Solar Panels in Arizona (2026 Guide)

Q: How much do solar panels cost in Arizona in 2026?

About $2.50–$3.30 per watt — roughly $12,500–$16,500 for a 5 kW system and $25,000–$33,000 for a 10 kW system, before incentives.

Q: Does Arizona have a solar tax credit?

Yes — a state income tax credit of 25% of system cost, capped at $1,000, with a 5-year carryforward. The 30% federal credit expired December 31, 2025.

Q: Does Arizona still have net metering?

No. Arizona retired traditional net metering; new customers are on net billing, where exports are credited below the retail rate (roughly 4–6 cents/kWh, locked for about 10 years).

Q: Is solar worth it in Arizona?

Often yes — abundant sun, low-ish costs, the 25% state credit, and property and sales tax exemptions help. But with net billing instead of net metering, a battery and right-sizing matter more than before.

Arizona has some of the best sun in the country and is one of the few states that still offers a real state solar tax credit in 2026. The catch: Arizona retired traditional net metering, so new solar customers are now on net billing, where exported power is worth less than the retail rate. That makes how you design and use your system more important than ever.

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How Much Do Solar Panels Cost in Arizona?

Arizona installs run about $2.50–$3.30 per watt before incentives:

5 kW system: ~$12,500–$16,500
10 kW system: ~$25,000–$33,000

See our 2026 cost breakdown for national context.

Arizona Solar Incentives in 2026

25% state solar tax credit

Arizona offers a state income tax credit worth 25% of your system cost, capped at $1,000, with a 5-year carryforward — one of the few state solar credits still active in 2026.

Property & sales tax exemptions

The added home value from solar is exempt from property tax, and solar equipment is exempt from state and county sales tax — cutting your upfront and ongoing costs.

No federal credit in 2026

The 30% federal residential credit (Section 25D) expired December 31, 2025. The remaining federal benefit flows through leases and PPAs (48E through 2027). See our 2026 incentives guide.

Net Billing — What Replaced Net Metering

As of late 2025, Arizona no longer offers traditional net metering. New solar customers are on net billing: power you export is credited at an avoided-cost rate well below retail — roughly 4–6 cents/kWh depending on utility (APS ~6.2¢, TEP ~5.7¢, SRP ~3.7–6.3¢), and that rate is typically locked for about 10 years. Because exports are worth so much less than the power you'd buy, the winning strategy is to use your solar as it's produced and often add a battery to store the excess.

Is Solar Worth It in Arizona?

For many homeowners, yes — excellent sun, relatively low install costs, the 25% state credit, and both tax exemptions all help. The big shift is net billing: without full net metering, right-sizing your system to your daytime use (or pairing it with storage) is what protects your savings. A custom quote for your utility (APS, SRP, or TEP) is the only way to see your real payback.

Frequently Asked Questions

How much do solar panels cost in Arizona in 2026?
About $2.50–$3.30 per watt — ~$12,500–$16,500 for 5 kW, $25,000–$33,000 for 10 kW.

Does Arizona have a solar tax credit?
Yes — 25% of system cost, capped at $1,000 (state). The federal credit expired December 31, 2025.

Does Arizona still have net metering?
No — net billing only, with exports credited below retail (~4–6¢/kWh).

Is solar worth it in Arizona?
Often yes, especially with the state credit and great sun — but design for self-consumption under net billing.

Sources

State credit & exemptions: SolarReviews, DSIRE. Net billing rates: Phoenix Valley Solar. Costs: EnergySage. Federal credit expiration: IRS OBBB FAQ.