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#5 Solar ROI State

Solar Panel ROI in Arizona (AZ)

Arizona averages 1,750 kWh per installed kW per year. At $13.2¢/kWh average utility rates, a 7 kW system produces a 25-year NPV of $14,954.

$11,740
System Cost (After Credits)
$14,954
25-Year NPV
8 years
Payback Period
$0.101/kWh
Solar LCOE

Solar Cost Breakdown in Arizona

7 kW system (2.60/W)$18,200
Federal ITC (30%)-$5,460
Arizona state credit (25%, capped at $1,000)-$1,000
Net Cost$11,740

Solar Production in Arizona

Arizona receives an average of 1,750 kWh of solar energy per installed kW per year, based on NREL PVWatts data for a south-facing system at 20° tilt. A 7 kW system produces approximately 12,250 kWh in year one, declining by 0.5% annually due to panel degradation.

At Arizona's average residential rate of $13.2¢/kWh with 4% annual escalation, first-year savings are $1,617. The solar LCOE of $0.101/kWh is 23% below the current utility rate and stays fixed while utility rates continue to climb.

Net Metering in Arizona

Export credit at avoided cost rate (~$0.03-0.04/kWh) for new customers

Solar by Utility in Arizona

Arizona Public Service (APS)

Avg Rate: $13.2¢/kWh
Structure: TOU
Peak: $24.5¢/kWh / Off-Peak: $7.2¢/kWh
View analysis ›

Salt River Project (SRP)

Avg Rate: $12.8¢/kWh
Structure: TOU
Peak: $21.8¢/kWh / Off-Peak: $6.8¢/kWh
View analysis ›

Tucson Electric Power (TEP)

Avg Rate: $12.8¢/kWh
Structure: TOU
Peak: $23.5¢/kWh / Off-Peak: $6.5¢/kWh
View analysis ›

Solar FAQ for Arizona

How much does solar cost in Arizona?
A typical 7 kW residential solar system in Arizona costs $18,200 before incentives. After the 30% federal ITC and $1,000 state credit, the net cost drops to $11,740.
What is the solar payback period in Arizona?
Based on the average AZ utility rate of $13.2¢/kWh and local solar irradiance of 1,750 kWh/kW/year, a 7 kW system typically pays for itself in 8 years. The 25-year NPV is $14,954.
Does Arizona have net metering?
Export credit at avoided cost rate (~$0.03-0.04/kWh) for new customers
What is the LCOE of solar in Arizona?
The levelized cost of solar energy in Arizona is approximately $0.101/kWh, compared to the current average utility rate of $13.2¢/kWh. Solar electricity costs 23% less than grid electricity at today's rates, and the gap widens as utility rates rise.
How much electricity does a solar panel produce in Arizona?
Arizona receives approximately 1,750 kWh of solar energy per installed kW per year. A 7 kW system produces about 12,250 kWh in its first year, enough to offset 117% of the average U.S. household's electricity consumption.

Compare Options in Arizona

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Solar ROI in Similar States

California

NPV: $41,579 · Payback: 5yr
Rate: $28.2¢/kWh · #1 ranked

Hawaii

NPV: $68,203 · Payback: 3yr
Rate: $39.8¢/kWh · #2 ranked

New York

NPV: $20,948 · Payback: 6yr
Rate: $22.2¢/kWh · #3 ranked

Massachusetts

NPV: $27,033 · Payback: 6yr
Rate: $28.2¢/kWh · #4 ranked

Nevada

NPV: $12,806 · Payback: 8yr
Rate: $13.2¢/kWh · #6 ranked

Connecticut

NPV: $24,321 · Payback: 7yr
Rate: $27.2¢/kWh · #7 ranked

Get Your Arizona Solar Analysis

These are averages. Your ROI depends on your specific utility, consumption, roof, and system size. Run a personalized 25-year NPV analysis — free.

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