Solar + battery installation in Arizona
Battery-coupled solar is the package that closes most often in Arizona. Federal Clean Tech ITC (30%) on storage stacks with state net metering. Free quote, ~2 minutes.
Get my free solar + battery quote- 7.5 kW
- Average system size
- $2.60/W
- Average cost (USD)
- 9 yrs
- Average payback
- 178+
- Local installers
Why solar in Arizona
Arizona is one of the sunniest states in the country, with desert sun-hours that let a solar array generate exceptional output year-round. Traditional one-to-one net metering has been replaced by net-billing 'export rate' or 'resource comparison proxy' riders at the major utilities, so exported solar is credited below the retail rate and the value of self-consumption (and batteries) is higher. The 30% federal Residential Clean Energy Credit (Section 25D) ended on December 31, 2025 - cash and loan purchases in 2026 no longer receive it, though leased / PPA systems can still indirectly access the surviving 30% commercial Section 48E credit. Arizona's own state income tax credit (25% of cost up to a $1,000 lifetime cap) remains active, and solar equipment is still exempt from state sales tax and excluded from property tax. Thanks to very high production, a typical 7.5 kW Arizona system pays back in roughly 9-12 years for a cash purchase in 2026.
Incentives & rebates
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Federal Residential Clean Energy Credit (Section 25D) - ENDED
The 30% federal Residential Clean Energy Credit (IRC Section 25D) expired for property placed in service after December 31, 2025, under the One Big Beautiful Bill Act. Homeowners who purchased and installed solar by year-end 2025 can still claim it on their 2025 return. Cash and loan purchases made in 2026 receive no federal tax credit.
Federal Commercial ITC (Section 48E) - via Lease / PPA
Section 48E (the commercial Clean Electricity Investment Credit) survives at 30% and is still available to third-party owners of residential systems under solar leases, PPAs, and similar TPO structures. The TPO company claims the credit and typically passes the savings through to the homeowner. To qualify, projects must begin construction by July 4, 2026; otherwise they must be placed in service by December 31, 2027.
Arizona Residential Solar Energy Tax Credit (ARS §43-1083)
State personal income tax credit equal to 25% of the cost of a solar energy device installed on the taxpayer's residence, capped at $1,000 per taxpayer as a lifetime limit (tracked since 1995). Unused credit can be carried forward up to five years.
Solar Equipment Sales Tax Exemption
Arizona exempts the retail sale of qualifying solar energy devices from state transaction privilege (sales) tax.
Solar Property Tax Exemption
Arizona excludes the added home value of a qualifying residential solar energy system from the property's assessed value, so going solar does not raise your property tax bill.
Net metering: Net billing / export rate riders
Arizona retired full retail net metering. Major utilities now use net billing with an export (or resource-comparison-proxy) rate that credits exported solar below the retail rate and steps down over time. This raises the value of self-consumption and makes battery storage increasingly attractive.
Why solar + battery in Arizona
Arizona is one of the sunniest states in the country, with desert sun-hours that let a solar array generate exceptional output year-round. Traditional one-to-one net metering has been replaced by net-billing 'export rate' or 'resource comparison proxy' riders at the major utilities, so exported solar is credited below the retail rate and the value of self-consumption (and batteries) is higher. The 30% federal Residential Clean Energy Credit (Section 25D) ended on December 31, 2025 - cash and loan purchases in 2026 no longer receive it, though leased / PPA systems can still indirectly access the surviving 30% commercial Section 48E credit. Arizona's own state income tax credit (25% of cost up to a $1,000 lifetime cap) remains active, and solar equipment is still exempt from state sales tax and excluded from property tax. Thanks to very high production, a typical 7.5 kW Arizona system pays back in roughly 9-12 years for a cash purchase in 2026.
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How payback works in Arizona
- System cost
- $19,500
- After 30% federal tax credit
- $13,650
- Estimated payback
- ~8.4 years
- 25-year net savings
- ~$26,850
These figures are illustrative; your actual quote reflects your roof, sun exposure, and local utility rates.
Frequently asked questions
How much do solar panels cost in Arizona?
Arizona solar averages about $2.60 per watt installed, so a typical 7.5 kW system runs roughly $18,000-$21,000. The 30% federal Residential Clean Energy Credit ended December 31, 2025 - cash and loan purchases in 2026 no longer receive it (leased/PPA systems can still indirectly capture 30% via the commercial 48E credit). The Arizona state credit can still take up to $1,000 off your tax bill.
Does Arizona still have net metering?
No. Arizona moved to net billing, where exported solar is credited at an export rate below the retail price. This makes using your own solar power (and pairing with a battery) more valuable than exporting it.
What solar incentives does Arizona offer?
Arizona has a 25% state income tax credit capped at $1,000 (lifetime), a state sales tax exemption on solar equipment, and a property tax exclusion for the added home value. The 30% federal Residential Clean Energy Credit (Section 25D) ended for purchases in 2026, but leased/PPA systems can still indirectly access the surviving 30% commercial Section 48E credit through their third-party owner.
Is solar worth it in Arizona?
For most homes, yes. Arizona has some of the best sun in the U.S., so panels produce more energy per watt installed; combined with the state credit and tax exemptions, typical payback is about 9-12 years for a cash purchase in 2026, even under net billing.