Solar resource
Your solar production in Phoenix
6.54 avg peak sun hours/day
Monthly avg solar radiation (kWh/m²/day) — Austin, TX. Bars update to show estimated kWh production when you use the calculator above.
Utility rate
Arizona Public Service (APS) electricity rate
$0.128/kWh residential
- Utility
- Arizona Public Service (APS)
- Residential rate
- $0.128/kWh (blended)
APS switched new solar customers from full retail net metering to a net billing structure under the Resource Comparison Proxy (RCP) rate of approximately $0.076/kWh for exported energy, per Arizona Corporation Commission order effective 2017. The blended savings rate of $0.128/kWh used here reflects avoided retail energy costs for self-consumed solar — which represents the majority of a typical residential system's output. Salt River Project (SRP) serves the East Valley; SRP residential rates are similar (~$0.115–0.125/kWh) but SRP uses a demand-charge structure for solar customers.
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Incentives
Available solar incentives in Phoenix, AZ
Federal + state + utility
| Incentive | Type | Value | Scope |
|---|---|---|---|
| Federal Solar Investment Tax Credit (ITC) | Tax Credit | 30% of system cost | Federal |
| Arizona Residential Solar Energy Tax Credit | Tax Credit | 25% of installation cost, up to $1,000 | State |
| Arizona Solar Equipment Property Tax Exemption | Exemption | 100% of added home value from solar | State |
| APS Net Billing (Resource Comparison Proxy) | Net Metering | ~$0.076/kWh for exported solar energy | Utility |
Incentive amounts and eligibility rules change. Verify current terms with your installer and a tax professional before installation.
System cost
Cost breakdown (6 kW default)
- Gross system cost
- $17400
- Federal ITC (30%)
- −$5220
- Net system cost
- $12,180
- Installed cost per watt
- $2.9/W
Lawrence Berkeley National Laboratory Tracking the Sun 2024 — Southwest/Arizona median installed cost for systems 3–10 kW
Payback & long-term value
25-year outlook
- Annual savings (yr 1)
- $1,306
- Simple payback period
- 9.3 years
- 25-year net savings
- $20470
- Assumed annual rate increase
- 2.5%/year
25-year estimate uses flat electricity rate for conservative baseline. Accounting for 2.5% annual rate increases, lifetime savings increase substantially.
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How it works
How solar savings work in Phoenix
- Your panels capture sunlight Solar panels convert sunlight into DC electricity. Phoenix averages 6.54 peak sun hours per day — the highest of any major U.S. city — meaning your panels produce at or near their rated capacity for over 6 hours each day on average. Summer months deliver especially intense irradiance, with May and June often exceeding 8 hours of effective solar production.
- An inverter converts DC to AC A solar inverter converts the DC power from your panels into the AC electricity your home uses. Modern string inverters and microinverters achieve 96–99% conversion efficiency. In Phoenix's extreme heat, high-quality inverters with robust thermal management are worth the investment.
- You use solar power instead of buying from APS Every kilowatt-hour (kWh) your system produces during daylight reduces what you buy from Arizona Public Service at $0.128/kWh. A 6 kW system produces about 10,200 kWh/year in Phoenix — among the highest output in the country — enough to offset most or all of a typical home's usage.
- Excess power flows back to the grid When your panels produce more than your home uses — common during midday hours — excess electricity flows to APS's grid. Under Arizona's net billing structure, APS credits this exported energy at the Resource Comparison Proxy (RCP) rate of approximately $0.076/kWh. Sizing your system to maximize self-consumption is the best strategy under this structure.
- You claim the federal and state tax credits In the tax year your system is installed, you claim a 30% federal tax credit on the full installed cost. On a $17,400 system, that's $5,220 off your federal income taxes. You also qualify for Arizona's 25% residential solar tax credit, capped at $1,000 — reducing your net cost further to approximately $11,180.
- Your savings grow over time As APS rates rise (historically ~2.5%/year), your solar savings increase while your system cost stays fixed. Over 25 years, a 6 kW system in Phoenix nets roughly $20,500 after repaying the installation cost — one of the strongest solar returns in the United States.
FAQ
Common solar savings questions for Phoenix, AZ
How much can I save with solar panels in Phoenix, AZ?
A 6 kW system — typical for a Phoenix home — produces about 10,200 kWh/year and saves approximately $1,306/year at APS's current rate of $0.128/kWh. After the 30% federal tax credit ($5,220) and the $1,000 Arizona state tax credit, the effective net system cost is around $11,180, with a payback period of about 9 years and 25-year net savings near $20,470. Phoenix's exceptional solar resource makes it one of the best solar markets in the U.S.
Does APS have net metering for solar?
APS no longer offers full retail net metering for new solar customers. Instead, APS credits excess solar energy exported to the grid at the Resource Comparison Proxy (RCP) rate, approximately $0.076/kWh — about 60% of the retail rate. The RCP rate is reviewed annually by the Arizona Corporation Commission. To maximize savings, size your system for high self-consumption rather than exporting large amounts to the grid.
What solar incentives are available in Arizona?
Arizona offers strong solar incentives: (1) the 30% federal Investment Tax Credit (ITC) through 2032; (2) Arizona's 25% residential solar tax credit, up to $1,000 (ARS §43-1090.02); and (3) a full property tax exemption for the value added to your home by a solar installation (ARS §42-11054). Combined, these incentives significantly reduce the net cost of going solar in Phoenix.
How much does a solar system cost in Phoenix?
A 6 kW system in Phoenix costs approximately $17,400 before incentives ($2.90/watt installed, per Lawrence Berkeley Lab 2024 data for the Southwest). After the 30% federal ITC ($5,220) and the $1,000 Arizona state credit, the net cost is about $11,180. Phoenix has a highly competitive installer market — getting 3–4 quotes is recommended.
Is Phoenix really the best city for solar in the U.S.?
By raw solar resource, yes. Phoenix averages 6.54 peak sun hours per day — more than any other major U.S. city and roughly 30% more than the national average. A 6 kW system in Phoenix produces about 10,200 kWh/year, compared to ~8,500 in Austin or ~8,100 in Houston. Combined with Arizona's state tax credit and the high electricity costs driven by summer air conditioning demand, Phoenix consistently ranks as one of the top solar markets in the country.
How many solar panels do I need for my Phoenix home?
A typical Phoenix home using 1,200–1,500 kWh/month (elevated by summer AC demand) needs a 7–9 kW system. A 6 kW system covers a smaller or more efficient home. Use the calculator above to enter your monthly bill and get a system size estimate tailored to your usage. Panel count depends on wattage: a 6 kW system uses approximately 14–16 panels at 390–430 W each.
Sources
Data sources and freshness
- https://pvwatts.nrel.gov/
- https://openei.org/apps/USURDB/
- https://www.aps.com/en/residential/service-plans
- https://azleg.gov/ars/43/01090-02.htm
- https://azleg.gov/ars/42/11054.htm
- https://emp.lbl.gov/tracking-the-sun
- https://www.energy.gov/eere/solar/homeowners-guide-federal-tax-credit-solar-photovoltaics
- https://dsireusa.org/
- https://www.azcc.gov/utilities/electric
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Disclaimer: This calculator provides estimates for informational purposes only — not financial or investment advice. Solar savings depend on actual shading, roof orientation, energy usage patterns, rate changes, and equipment performance. Consult a licensed installer and a tax professional before making purchasing decisions. Verify incentive eligibility with official sources. Data last verified 2026-04-13.