In 2018, it’s rare to have a discussion about the top solar markets in the U.S. without mentioning Arizona. The Grand Canyon State offers a dynamic combination of bountiful sunlight and record low solar prices thanks to its lucrative state tax credit. When homeowners realize that Arizona is the third best state for solar after California and North Carolina, it’s hard not to see the appeal of installing a PV system in 2018.
How much do solar panels cost in Arizona?
As of 2018, the average cost for solar panels in the state of Arizona is $2.67 per watt. Since the average system size in the U.S. is 6 kilowatts (6,000 watts), the average cost of a solar panel system in AZ is $16,020 before any federal or local incentives.
Arizona’s solar prices are clearly competitive when you look at typical payback period in the state – usually between 5 and 7 years. However, the favorable pricing is even more clear when you compare Arizona to the rest of the U.S. Check out this data table that compares Arizona and national pricing.
Solar pricing: Arizona costs compared to national averages
| System size | National cost of solar panels (with federal tax credit) | Arizona cost of solar panels (with federal and state tax credit) |
|---|---|---|
| 3 kW | $6,694.00 | $4,907 |
| 6 kW | $13,188 | $10,514 |
| 10 kW | $21,980 | $17,990 |
| 12 kW | $26,376 | $21,728 |
*Note – prices in this table have the 30% Federal solar rebate already deducted
The data in the above table, which exhibits real quotes submitted to homeowners on the EnergySage Solar Marketplace, clearly illustrates very favorable pricing in the sunny state of Arizona when compared to the rest of the country. Looking at Arizona’s dollar-per-watt average ($3.01) and the U.S. average ($3.14), there is a large disparity. However, Arizona’s state tax credit adds even more to the great economics of solar in the Grand Canyon State.
The Arizona state tax incentive is offered as a rebate for your next year’s state taxes, and it’s valued at 25 percent of total installation costs up to $1,000. Because it’s very unlikely your total costs of going solar will be less than $4,000, it’s safe to think of this incentive as a simple $1,000 deduction for any Arizona homeowner. Depending on the size of the system you are installing, the state tax credit when paired with the federal ITC credit could lead to as much as a 40 percent deduction of your overall cost of going solar.
Why Arizona is a solar leader in the U.S.
A key factor for the success of solar markets has been the concept of the Renewable Portfolio Standard (RPS) – a regulation that applies to utilities in specific states, requiring them to source a certain percentage of their power supply from renewable energy. Arizona’s RPS mandates that a 15% renewables target be met by 2025 – one of the higher state goals in the U.S.
A big reason for why this RPS will be easily achievable for Arizona is its extensive workforce. In addition to being arguably the third best state in the U.S. for solar power, Arizona is also the #7 state for solar jobs. These factors as well as its state tax credit that is not expected to expire anytime soon make Arizona a pretty safe bet for continued strong solar market growth in years to come. For those planning to buy a solar system in Arizona in the near future, check out our three pieces of advice:
Three Tips for Solar Shoppers
1. Homeowners who get multiple quotes save 10% or more
As with any big ticket purchase, shopping for a solar panel installation takes a lot of research and consideration, including a thorough review of the companies in your area. A recent report by the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) recommended that consumers compare as many solar options as possible to avoid paying inflated prices offered by the large installers in the solar industry.
To find the smaller contractors that typically offer lower prices, you’ll need to use an installer network like EnergySage. You can receive free quotes from vetted installers local to you when you register your property on our Solar Marketplace – homeowners who get 3 or more quotes can expect to save $5,000 to $10,000 on their solar panel installation.
2. The biggest installers typically don’t offer the best price
The bigger isn’t always better mantra is one of the main reasons we strongly encourage homeowners to consider all of their solar options, not just the brands large enough to pay for the most advertising. A recent report by the U.S. government found that large installers are $2,000 to $5,000 more expensive than small solar companies. If you have offers from some of the big installers in solar, make sure you compare those bids with quotes from local installers to ensure you don’t overpay for solar.
3. Comparing all your equipment options is just as important
National-scale installers don’t just offer higher prices – they also tend to have fewer solar equipment options, which can have a significant impact on your system’s electricity production. By collecting a diverse array of solar bids, you can compare costs and savings based on the different equipment packages available to you.
There are multiple variables to consider when seeking out the best solar panels on the market. While certain panels will have higher efficiency ratings than others, investing in top-of-the-line solar equipment doesn’t always result in higher savings. The only way to find the “sweet spot” for your property is to evaluate quotes with varying equipment and financing offers.
For any homeowner in the early stage of shopping for solar that would just like a ballpark estimate for an installation, try our Solar Calculator that offers upfront cost and long-term savings estimates based on your location and roof type. For those looking to get quotes from local contractors today, check out our quote comparison platform.
