30% of system cost
Federal Solar Tax Credit (ITC)
Phoenix homeowners can deduct 30% of their solar system cost from federal taxes through 2032, delivering major savings on residential installations.
☀️ Phoenix Solar Guide 2026
Best Solar Installers in Phoenix
Phoenix is the sunniest major city in America with 299 sunny days and 6.58 peak sun hours per day. Combined with Arizona's state tax credit, property and sales tax exemptions, and the federal ITC, Phoenix homeowners save an average of $1,700 per year with solar.
299
Sunny Days/Year
$1,700
Avg Annual Savings
5.8 yrs
Avg Payback Period
$2.55
Avg Cost per Watt
Phoenix Solar at a Glance
☀️
Avg Sunshine
6.58 peak sun hours/day
⚡
Local Utility Rate
$0.12–$0.24/kWh (APS/SRP TOU)
🏠
Avg System Cost
$17,850 (7kW before incentives)
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Typical Savings
$1,700/year · $42,500+ over 25 years
Phoenix Incentives
Phoenix Solar Incentives & Rebates
Phoenix combines the nation's best sunshine with Arizona's generous state incentives and federal benefits.
25% up to $1,000
AZ Residential Solar Tax Credit
Arizona offers an additional state income tax credit of 25% of system cost (capped at $1,000) on top of the federal ITC, further reducing your net cost.
Demand rate optimization
APS Solar Communities Program
APS customers in Phoenix benefit from demand-based rate plans where solar + battery storage helps minimize demand charges during peak summer hours.
Energy export credits
SRP Customer Generation Plan
Salt River Project offers a Customer Generation Plan for Phoenix solar owners, providing credits for excess energy exported to the grid during off-peak hours.
100% exempt from assessment
Property Tax Exemption
Arizona's property tax exemption ensures your solar panels don't increase your Phoenix home's property tax assessment, protecting your investment value.
Save ~5.6% on purchase
Sales Tax Exemption
Arizona exempts residential solar equipment from the state Transaction Privilege Tax, saving Phoenix homeowners approximately 5.6% on their system purchase.
FAQ
Phoenix Solar FAQs
How much do solar panels cost in Phoenix in 2026?
The average cost of solar panels in Phoenix is approximately $2.35–$2.75 per watt before incentives. For a typical 7kW system, that's $16,450–$19,250 before the 30% federal tax credit and $1,000 state credit, bringing the net cost to roughly $10,515–$12,475.
Is Phoenix the best city in the US for solar?
Phoenix is widely considered one of the top 3 cities in America for solar energy. With 299 sunny days per year and 6.58 peak sun hours daily — the highest in the country — Phoenix solar systems produce significantly more energy than the national average, leading to faster payback and higher lifetime savings.
Should I choose APS or SRP for solar in Phoenix?
Both APS and SRP offer solar programs for Phoenix residents, but they differ in structure. APS uses a demand-based rate plan while SRP offers a Customer Generation Plan with export credits. Your best option depends on your usage patterns, system size, and whether you add battery storage.
How does Phoenix heat affect solar panel performance?
While extreme heat can slightly reduce panel efficiency (about 0.3-0.5% per degree above 77°F), Phoenix's extraordinary sunshine more than compensates. Modern panels are designed for hot climates, and Phoenix systems still produce 20-30% more energy annually than systems in average US cities.
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