Trevor has worked in home improvement and residential solar since 2016 and maintains the EcoGen Solar Cost Index.
Arizona has the cheapest installed solar in the United States: $2.39 per watt, 17.6% below the national average and the lowest of any state. It also has the best sun in the country, 6.66 peak hours producing 1,789 kWh per installed kW each year. What it does not have is net metering. Exports here earn avoided-cost rates as low as 3.45¢ per kWh, and that changes what a smart Arizona system looks like. This guide prices the hardware, lays out each utility’s actual export rate, and shows why the winning math in Arizona is about when you use your power, not just how much you make.
The Cheapest Panels in America
Arizona’s typical system is 7.21 kW at about $17,234 gross. The same array produces around 12,900 kWh a year here, enough to cover the average home’s 1,075 kWh monthly consumption on paper. Scale, competition, and easy roofs (single-story homes, no snow load) keep installation costs low: the $2.39 per watt benchmark is where fair Arizona bids cluster, and quotes meaningfully above it should come with a specific engineering reason.
Arizona is one market of fifty; the full national pricing picture shows where it lands.
The benchmark by size, gross before incentives:
| System size | Gross price at $2.39 per watt |
|---|---|
| 5 kW | $11,950 |
| 6 kW | $14,340 |
| 7.21 kW, the typical Arizona system | $17,234 |
| 8 kW | $19,120 |
| 10 kW | $23,900 |
| 12 kW | $28,680 |
What Each Arizona Utility Pays for Your Exports
Arizona retired retail net metering for new customers back in 2017-18. Today your exported power earns an export credit set per utility, and the gap between the retail rate you avoid (15.72¢ average) and the export rate you are paid is the single most important number in any Arizona solar decision:
Utility | Export Credit | Terms That Matter |
|---|---|---|
APS | 6.171¢/kWh | RCP rate locked 10 years from interconnection; current tranche covers applications through August 31, 2026; next step-down expected September 1, 2026 |
TEP | 5.13¢/kWh | Rider R-14, effective October 1, 2025; 10-year lock from interconnection |
SRP | 3.45¢/kWh | E-13/E-14 export plans effective November 2025; recalculated each May from 2026; current plans end November 2029 |
Two timing details deserve attention. APS’s Resource Comparison Proxy rate can fall up to 10% per tranche, and the current 6.171¢ tranche closes to new applications on August 31, 2026; interconnecting under it locks that rate for 10 years. And SRP customers face the structurally weakest export value in the state, which pushes SRP homes hardest toward the self-consumption strategy below.
See which export rate your address gets
Self-Use Decides Your Payback
Every kilowatt-hour you consume as it is produced avoids the retail rate your own plan charges, modeled here at the 15.72¢ statewide average. Every kilowatt-hour you export earns your utility’s credit instead. The split between those two, your self-consumption share, is worth more to your payback than panel brand, inverter choice, or even a fair price. Here is the same 7.21 kW APS-territory system at three realistic self-use levels:
Self-Consumption Share | Modeled Year-1 Value | Modeled Simple Payback |
|---|---|---|
30% (away all day, no load shifting) | ~$1,165 | ~15 years |
50% (some daytime load, timed appliances) | ~$1,410 | ~12 years |
70% (home days, pool pump and cooling on sun hours) | ~$1,660 | ~10 years |
Those rows run on the 15.72¢ statewide average, which is ranking context rather than the rate on an APS bill. APS prices by rate plan, so pull the per-kWh figure from your own plan and rerun the middle column before treating any row as yours.
The lever is behavioral and free: run the pool pump, laundry, and pre-cooling during production hours. In SRP territory the same shifts matter roughly twice as much, because exports there earn barely a fifth of the retail rate. A battery raises self-use further but adds cost the low export rates then have to justify; price it as its own decision, not a default.
Sizing Against the Export Trap
Under net billing, oversizing is expensive. Extra production beyond what your home absorbs turns into 3.45¢ to 6.171¢ exports that take decades to repay their own hardware. Sizing should start from your usage pattern, not your roof area: a system at 80% to 100% of annual consumption with deliberate daytime load-shifting beats a bigger array feeding cheap exports. Ask any bidder to show modeled self-consumption for your household schedule, not just annual production.
When Arizona Solar Is the Wrong Buy
- Nobody home in daylight and no way to shift load. At 30% self-use the modeled payback stretches toward 15 years; timers, smart thermostats, or a schedule change should come before a contract.
- Counting the federal credit. The 25D residential credit is $0 for host-owned systems whose installation is completed after December 31, 2025, and residential PPAs are restricted in Arizona, so the third-party route to the remaining 48E credit is largely closed to homeowners here.
- A quote sold on export income. Any proposal showing exports valued at retail, or projecting income from overproduction, is modeling a tariff Arizona has not offered since 2017.
- Short-horizon owners. A 10 to 15 year modeled payback needs either a long stay or a buyer who values the locked export rate; plan for one or the other.
Arizona Solar Cost FAQs
Arizona is the cheapest solar market in the country at $2.39 per watt installed as of March 1, 2026. The typical 7.21 kW system runs about $17,200 before incentives.
No. Arizona closed retail net metering to new customers in 2017-18. Exports now earn per-utility credits: about 6.171¢ per kWh at APS, 5.13¢ at TEP, and 3.45¢ at SRP, all well below the 15.72¢ average retail rate.
APS’s current export credit of 6.171¢ per kWh covers applications through August 31, 2026, and is locked for 10 years from interconnection. The next tranche is expected September 1, 2026 and can be up to 10% lower.
Modeled payback on a typical APS-territory system ranges from about 10 years at high self-consumption to about 15 years if most production is exported. How much of your own power you use as it is produced matters more than any other factor.
Sometimes. A battery raises self-consumption, which is exactly what Arizona’s low export rates reward, but it adds cost those same rates must then justify. Price the system with and without storage and compare the two paybacks directly.
Your utility decides your export rate, and your schedule decides your payback. Enter your ZIP code and we will start from both.
Get quotes sized for self-use, not exports
Methodology: Cost figures in this guide use the EcoGen Solar Cost Index for Arizona, $2.39 per watt as of March 1, 2026, with payback modeled with no federal residential credit for host-owned systems, exports at each utility’s published credit rate, rate escalation at the state 5-year average of 3.71%, 0.5% annual panel degradation, and a 25-year horizon.
References & Research Sources
EcoGen America reviewed Arizona utility export-credit tariffs and decisions, federal electricity price and utility datasets, Census home-value data, federal tax guidance, state PPA-legality research, and Arizona contractor licensing classifications for this Arizona solar cost guide. Sources were accessed between June 10 and August 15, 2026, unless another date is listed below.
- Arizona Corporation Commission / Arizona Public Service (APS). Rate Schedule RCP, Decision 81439. Resource Comparison Proxy export credit for residential solar. Accessed June 11, 2026.
- Tucson Electric Power (TEP). Rider R-14, Decision 81488. Residential export credit rider. Accessed June 11, 2026.
- Salt River Project (SRP). Residential Solar Export Credit Plans. Export pricing effective November 2025. Accessed June 11, 2026.
- U.S. Energy Information Administration (EIA). Electric Power Monthly, Table 5.6.A. Average residential electricity prices by state, March 2026 edition. Accessed June 10, 2026.
- U.S. Energy Information Administration (EIA). Form EIA-861: Annual Electric Power Industry Report, 2024. Utility residential customer data for APS, SRP, TEP and cooperative shares. Accessed June 10, 2026.
- U.S. Census Bureau. American Community Survey, 2024. Median home value data used for cost-to-value context. Accessed June 11, 2026.
- Internal Revenue Service (IRS). One, Big, Beautiful Bill Provisions. Guidance on Public Law 119-21, including termination of the Section 25D residential credit for systems whose installation is completed after December 31, 2025. Accessed August 15, 2026.
- Database of State Incentives for Renewables & Efficiency (DSIRE). Third-Party Solar PV Power Purchase Agreement Policies, May 2026. State-by-state PPA legality map. Published May 2026. Accessed August 15, 2026.
- Arizona Registrar of Contractors (ROC). License Classifications. Contractor licensing classes covering solar installation work. Accessed August 15, 2026.
