| Peak sun hours per day | 5.8 – 6.5 |
|---|---|
| Annual kWh per kW installed | 1,600 – 1,900 |
| Typical system size | 7 – 11 kW |
| Electricity rates | Around the national average, with very high summer consumption |
| Export credit regime | Export rate set per utility, not full retail |
How Arizona credits the power you export
Arizona replaced retail net metering with a system where each utility's
export credit is set through the regulatory process, generally at a rate
below retail and stepped down over time. Customers are typically
locked into the export rate in force when they interconnect for a defined term,
which makes the timing of your interconnection genuinely relevant.
Combined with widespread time-of-use pricing and demand charges on some
residential plans, this makes Arizona a state where when you generate and
consume can matter as much as how much.
The general mechanics are in net metering explained; this is how they land in Arizona.
What a system costs here
Arizona pricing sits broadly within the national band of $2.50–$3.50 per watt before incentives, so a typical 7 – 11 kW system lands somewhere around $18,000–$39,000 before credits. Local labour rates, permitting fees and whether you need an electrical panel upgrade move that more than the panel brand does. Full breakdown in what solar panels cost.
Incentives that stack in Arizona
| Layer | What it does |
|---|---|
| State tax credit | Arizona has offered a residential solar credit worth a percentage of system cost up to a capped amount. Confirm the current percentage and cap. |
| Sales tax | Solar equipment has been exempt from state sales tax. |
| Property tax | The added value from a solar system has been excluded from property tax assessment. |
When solar is a poor fit in Arizona
- Extreme heat reduces panel efficiency — output on a 45°C afternoon is measurably below the same irradiance on a mild day. Good designers model this; optimistic ones don't.
- If your utility plan carries a demand charge, an array without storage may not reduce your bill as much as a simple kWh calculation suggests.
- Dust and monsoon-season soiling mean production models that assume clean panels year-round will overstate output.
The universal disqualifiers apply here too — renting, a roof near end of life, or moving within a few years. See roof age and solar and what happens when you sell.
Arizona solar questions
Does Arizona still have net metering?
Not in the full retail sense. Each utility has an export rate set through the regulatory process, generally below retail and stepping down over time, with customers locked in for a term at interconnection. Check the current rate for your specific utility.
How much can I generate in Arizona?
Arizona has among the best sun resource in the US — roughly 1,600 to 1,900 kWh per year per kW installed, against 1,000 to 1,250 in the Pacific Northwest. The same array produces substantially more here.
Does heat hurt solar panel output?
Yes. Panels lose roughly 0.3–0.4% of output per degree Celsius above 25°C, so extreme summer afternoons produce less than the irradiance alone would suggest. It doesn't undo Arizona's advantage, but it should be in the model.
General information for Arizona homeowners, not financial, tax or engineering advice. Figures are planning ranges; your own quote depends on your roof, your consumption and your utility.