Is Solar Worth it in Arizona? (2025 Homeowner's Guide)

Arizona’s endless sunshine makes it one of the best places in the U.S. to install solar panels. With more than 300 sunny days each year, Arizonans have a unique opportunity to harness free, renewable solar energy and significantly reduce their utility bills. But despite the known benefits, you might be wondering: is solar power really worth the investment for your home? 

For many homeowners, the upfront costs of solar installation can seem like a big decision. But with generous incentives like the 30% federal tax credit and long-term savings on energy bills, many Arizona homeowners find that solar pays off in the long run – literally! In this guide, we help you understand if solar power is worth it for your home, the benefits of going solar in Arizona, and things to consider when deciding on solar. 

Key takeaways: 

• Arizona is the sunniest state in the country with 7 to 8 peak sun hours per day. This abundant sunshine makes our state a prime location for harnessing solar power and turning it into free electricity. 
• Installing a residential solar energy system can help you save money on utility bills while also increasing your home’s value, all of which add up to make a considerable return on investment. 
• The upfront costs of installing solar can be offset with long-term savings, federal tax credits, and other state incentives, including a property tax and sales tax exemption. 

How to know if solar power is worth it in Arizona

If you live in Arizona, you’re in the perfect location to take advantage of solar power. With more sunny days than anywhere else in the U.S., you’re already off to a great start. But while solar energy systems are likely to benefit the majority of Arizonans, they’re not necessarily for everyone. 

To understand if solar power is worth it for you, you’ll need to weigh up a few key factors, including your unique property and expected return on investment (ROI). Below are some things to consider when deciding if solar power is right for you.

Your unique energy consumption habits

Your household’s energy usage determines how many solar panels you’ll need and the overall cost of your system. The more energy you tend to use, the more solar panels you’ll need. While this means higher initial costs, it also means you’ll be saving more on utility bills each month by switching to solar power. 

If your household doesn’t consume much electricity – say, you only use 500 kWh or less per month – you might not see enough savings on your utility bill to make solar worth it. That said, the average Arizona household uses 1,114 kWh per month, which means most homeowners will benefit significantly from solar power. 

To see if your energy consumption aligns with making solar worthwhile, take a look at your past utility bills. We have a detailed guide on how to do this in our guide on calculating your solar ROI: Solar Panels ROI: Calculating Your Average Returns.

The cost of solar panels in Arizona

Adding solar panels to your home is one of very few home improvement projects that begins to pay for itself from the moment it’s switched on. This is especially true if your home consumes a lot of electricity and/or rates are particularly high where you live. 

Keep in mind that there’s no one-size-fits-all price when it comes to solar energy systems, and many factors will contribute to the final system configuration and cost, including: 

• Solar panel size, capacity, brand
• Solar racking system
• Type and condition of your roof
• Inverter preference
• Performance monitoring systems
• Solar batteries
• Capacity and condition of your electrical panel
• Local AHJ requirements.

Average solar payback period in Arizona

Most Arizona homeowners pay off their solar panels in around 8 to 14 years. This is known as the ‘payback period’ – the time it takes for your electricity savings to offset your initial solar investment. After this point, you’ll essentially be generating free electricity. 

To calculate your solar payback period, look over past utility bills to understand how much you pay on electricity each year. Now take the upfront costs of solar and divide it by your yearly electricity costs – this is your estimated payback period. 

For example, if you invest in a $24,000solar panel system that is designed to offset 100% of your bill, and your annual pre-solar electricity costs are $2000 per year, your payback period would be $24,0001 divided by $2,000 or around 12 years. With most high-quality solar panels lasting upwards of 30 years, that still gives you nearly two decades of free electricity. 

If you have a longer than average payback period - maybe your system is much larger or your goal was to offset just 70% of your electric bill – you’ll still save enough money to make solar worth it, it’ll just take longer to pay off your initial investment.

Your roof’s sun exposure

The more sunlight your roof receives throughout the day, the more electricity your solar panels will be able to generate. With Arizona’s abundant sunshine, most homes throughout the state work well with solar panels. 

But if your roof is shaded by trees or nearby buildings, or doesn’t face south, west, or east, your panels might operate at reduced efficiency. That doesn’t necessarily mean that solar is out of the question, but it will play a role in determining whether it’s worth the investment. Speaking to a reputable solar installer is the best way to get a clear picture of how much sunlight your solar panels could capture and whether it’s enough to produce significant savings. 

See More: Solar Panel Direction: What is the Best Angle?

The benefits of solar for Arizona homeowners

For Arizona homeowners, switching to solar means saving money on utility bills, taking advantage of generous financial incentives, and increasing your home’s value – all while contributing to a cleaner, greener future for us all. Let’s take a closer look at how you can benefit from installing solar panels.

Save money on electricity bills

For many people, the biggest benefit of going solar is saving money on electricity bills. With the average Arizona utility bill sitting at around $128.40 per month, homeowners could save as much as $1540.8 per year by generating 100% of their energy needs with solar. By the end of your typical 30-year solar panel warranty period, these savings would add up to more than $46,000 in total. Even with the warranty period over, your panels will continue to generate free electricity for years to come. 

On top of that, electricity prices have been rising each year for the last decade and they’ll continue to do so. Locking in electricity rates with solar can help shield you from future price hikes, adding to your overall savings.

To save even more with solar power, you can install a solar battery system to store excess power and use it when your panels aren’t producing energy. While this adds to your initial costs, it’ll help you save even more in the long-term by reducing your reliance on grid power and protecting you from expensive on-peak charges while giving you peace of mind during blackouts or inclement weather. 

Keep Reading: How Many Batteries Do You Need To Run a House on Solar?

Take advantage of solar incentives

Arizonans are eligible for numerous financial solar incentives that make switching to solar more affordable, including: 

• Federal solar tax credit: This gives homeowners a federal income tax credit of 30% of your total solar system cost. In Arizona, this averages to about $10,385 off your total solar investment. 
• Residential solar energy tax credit: This offers a state tax credit of 25% of your entire system value, capped at $1,000.
• Solar equipment sales tax exemption: In Arizona, homeowners are exempt from paying the 5.6% sales tax on solar energy equipment and installation fees, reducing upfront costs.
• Energy equipment property tax exemption: Solar panels are known to increase property value, however this exemption means you won’t have to pay more property taxes as a result of going solar. 

See More: Federal Solar Tax Credit: Everything You Need to Know

Increased home value

Solar panels won’t just save you money on electricity, but they’ll also increase your home’s value. According to data from Zillow, 67% of homebuyers consider energy efficiency a ‘very to extremely important’ factor when choosing a home. This is backed by data from the U.S. Department of Energy’s Berkeley Lab, which found that homebuyers were willing to pay an additional $15,000 for a home powered by solar energy. 

Zillow also reports that prospective buyers would spend 4.1% more for a solar-powered home. With the median U.S. home value sitting around $420,800 in 2024, this could mean an increase of over $17,250. In solar-friendly regions like Arizona, this amount could be even higher. Arizona real estate expert, Tara Rutkowski, estimates that solar installations can increase home value by $1,000 to $1,500 per kW, depending on the system’s age and energy savings. 

Overall, an estimated property value increase of $15,000 or more thanks to a solar panel installation is not uncommon. And with the property tax exemption in place, you won’t have to pay higher taxes, making solar a win-win for Arizona homeowners. 

Keep Reading: Do Solar Panels Increase Home Value?

Generate clean, renewable energy

Beyond the financial benefits of solar, there’s the feel-good aspect of reducing your carbon footprint and doing something good for the planet. Switching to solar power means you’re less reliant on fossil fuels and greenhouse gas emissions.

While it might seem like a small step towards combating global warming, as more homes and businesses jump on board, the collective environmental impact could be transformative for our future. It all starts with changing our individual habits, and embracing solar energy is a great step. 

Things to consider when deciding on solar 

While switching to solar power offers numerous benefits, there are still some things to consider before making the leap. Let’s take a look at things to be aware of when exploring solar power in Arizona. 

Installation costs

Solar panels understandably require an initial upfront investment, which can be significant depending on the size of your system. In Arizona, where most of us rely on air conditioning to get us through the intense heat, many homes require large solar arrays to meet high energy demands. 

However, there are ways to minimize your upfront costs. For example, you can opt for a simpler system or choose to add solar batteries in the future. You can also explore financing options, like no-money-down solar loans. 

While solar leasing options might seem like an attractive way to avoid the upfront investment, it’s almost always more cost-effective to finance or buy your equipment outright. These two options give you access to federal incentives and a greater return over time.

See: Leasing vs Buying Solar Panels – Which is Best For You? 

Your payback period

As mentioned earlier, understanding your estimated payback period is an essential consideration when determining whether solar is worth it for you. This is the time it takes for your solar panels to pay for themselves. 

A shorter payback period means you’ll start seeing savings sooner, increasing your overall ROI. If your expected payback period is on the longer side, it’ll take more time to see the financial benefits of solar and your overall ROI may be lower. 

Net billing options

In Arizona, you can still earn credits for sending surplus electricity back to the grid, although these credits are much smaller than they were just a few short years ago. This process is known as ‘net billing’, and while compensation rates are lower than the retail costs of electricity and decreasing annually, it can still add more savings to your utility bills. 

Some homeowners choose to install solar batteries rather than participate in net billing. This allows you to store unused solar power and use it during periods when the sun isn’t shining, like at night or on cloudy days. While solar batteries can add to your upfront costs, they’ll significantly increase your energy savings over time by reducing your reliance on grid power. 

Solar scams and misleading practices

Arizona’s solar industry is booming, and this has unfortunately led to an increase in solar scams and misleading sales practices. When considering solar panels, it’s important to be cautious of companies offering ‘free solar panels’, heavily promoting solar leases, or putting pressure on you to sign up today. Going solar is a big investment, and the payback requires understanding how energy offset and net billing applies to your chosen rate plan. In short, ask a lot of questions, take your time, and make sure you understand how the whole scenario works before you sign. 

It’s also important to do your research and carefully vet a solar installation company before choosing to work with them. Your solar panels will be with you for upwards of 30 years, and you want to choose a reliable installer who’ll be there to offer expert guidance and support throughout the lifespan of your system. 

To learn more about what to look for in a reputable solar installer, read our guide: 10 Things to Check Before Hiring Solar System Installers.

Is solar worth it in Arizona?

Arizona’s abundant sunshine and financial incentives make it one of the best places to go solar, but deciding if it’s worth it for your home requires careful consideration. To get a clearer picture of how solar could benefit you, it’s important to assess your unique energy usage, property’s sun exposure, and potential return on investment. 

For customized guidance on whether solar is a smart investment for your home, contact our team at Sun Valley Solar Solutions for a free, no-obligation consultation. We’ll assess your unique energy habits, roof’s suitability for solar, and energy goals to provide an initial quote and estimated ROI calculation.

As Arizona locals, we understand our state’s unique climate, net billing rules, and financial incentives deeply, and we’ve been working with Arizonans just like you for decades. Join the growing number of homeowners embracing solar power and reach out to us today.