Arizona Solar Power at a Glance


Electricity costs


Renewable Portfolio Standards


Solar Carve Out


Net Metering




Performance Payments




State Tax Credits


Property Tax Exemption


Sales Tax Exemption



  • Lower range of electric prices
  • Renewable Portfolio Standard
  • Net Metering
  • Few Incentives/Rebates
  • State Tax Credits
  • Property Tax Exemption
  • Sales Tax Exemption


  • No Solar Carve Out Program
  • No Solid Interconnection Policies
  • No Performance Payments

Solar Power in Arizona

Arizona Solar Power


Arizona is a beautiful warm sunny State and has a lot of good reasons for wanting to depend on solar energy as their renewable energy. The residents have recognized this and have shown it with being rated as having the highest solar energy per capita. They have gained recognition as being the reason why solar use has tripled in the US over the last three years.Many believe that Solar Power Arizona is the best way to go and the state is tied for 18th place in the nation for their electricity costs. Their cost is 13 cents kwh.

Average Costs of going Solar Power Arizona

The cost for those Arizonians who want to install a 5kW solar system will be $17,500. Then from this, you can deduct $7,289 in incentives. This leaves the first year cost at $10,211.

Savings for Arizona Solar

For those residents who are going to capitalize on what the sun can do for them by way of energy they are going to save about $78. a month off their energy bills. When it comes to the increased value of their home they can expect an increase of about $18,720.

Payback Periods For Arizona Solar Systems

For a solar system the size of 5kW the payback period will be ten years.

Return On Investment On Solar Electric System

A solar power Arizona system is going to generate 12.7% rate of return on this investment.

Incentivesfor Arizona Solar Power

Current Arizona Legislative Environment For Solar

For Arizona’s Renewable Portfolio Standard they are rated as #23 best in the nation. Their mandate is 15% by the year 2025. The RPS is the mandate that utilities must meet in the production of renewable energy by a specific time period.

Arizona is actively involved in a Solar Carve out and in fact, it is rated as the nations 6th best. A Solar Carve Out means those companies generating electricity must produce a percentage from the sun, and if they don’t then they face fines for non-compliance. In Arizona the utilities are required to generate 30% from distributed energy technology.

Incentives Available For Arizona Solar

Arizona does not offer Solar Performance Payments like some of the other states do.

Arizona Net Metering Available

This state has an excellent net metering program in place. Net metering allows you to store your extra energy that has been created by your solar system. Then you get a credit for this extra. In Arizona unlike some of the other states there is no limit on who can join the program. The only stipulation is keeping the solar to 125% of what your requirements are. For those residents who do generate the extra 25% of solar power they will get some extra cash at year end.While Arizona is rating well in the majority of its solar energy policy and regulations, it is not the same when it comes to their interconnection policies which are quite weak.

Arizona Solar Energy

Rebates / Tax Credits

Arizona rebates rate as #27 in the nation.

At one time Arizona was known for some great rebates when it came to solar energy, but these have dwindled and only a few utility companies are now offering them.

Arizona ranks #20 in solar tax credits. Those who install a solar system in Arizona will get a 25% tax credit on the total cost of the system, up to $1,000.

There is the Federal tax credit of 30% which there is no limit.

One great aspect about the Solar Power Arizona program is that it does offer an exemption of property tax increase due to the solar power installation. In addition to this the solar system is also exempt from sales tax.


Overall Arizona is one of the better states for encouraging the use of Solar Power energy. No doubt they will continue their efforts going forward in the future.