According to the U.S. Bureau of Labor Statistics, energy costs have increased roughly 3% in Arizona over the last few years. However, the cost of solar energy equipment has dropped by around 52% over the last decade, as reported by the Solar Energy Industries Association (SEIA). With this significant price decrease in solar equipment, now might be the perfect time for Arizona homeowners to transition to solar energy.
Solar Panel Cost in Arizona
The cost of solar panels in Arizona averages $2.61 per watt, lower than the national average of $2.66. However, the total price for a mid-sized solar system in Arizona typically averages around $21,011 after factoring in federal credits. This amount is higher than the national average of $16,758, with a difference of roughly $4,500. Residents of Arizona use an average of 1,048 kilowatt-hours (kWh) per month, slightly more than the U.S. average of 886 kWh. This increased energy usage necessitates larger solar systems, resulting in higher installation costs.
Factors That Affect Solar Installation Costs in Arizona
Several factors contribute to the cost of solar panel installation in Arizona, including:
- System Size: The size of the solar system you require depends on your electricity usage, the size of your home, and the types of appliances in your household. Greater electricity consumption generally means a larger solar system, which translates to higher costs.
- Roof Orientation: South-facing roofs receive more direct sunlight, making installation easier and more cost-effective.
- Panel Type: Different types of solar panels are available, each with its own price point and efficiency level.
- Panel Quality: High-quality panels come at a premium price but tend to last longer and yield greater long-term savings.
- Tax Incentives: Both federal and state governments offer tax incentives to reduce the installation costs of solar panels.
Arizona Tax Credits and Incentives
In Arizona, there are three primary ways to save money on solar panels:
Federal Solar Tax Credit
The federal government offers a solar tax credit — known as the ITC — equal to 30% of solar installation costs, which can be claimed on your federal taxes. It’s important to note that this credit will gradually decrease to 26% in 2033 and 22% in 2034, with an expiration date in 2035 unless renewed by Congress.
Arizona Solar Tax Credit
Arizona offers a residential solar energy tax credit of 25% of the total system cost or $1,000, whichever is lower. This credit is deducted from your state taxes.
Arizona Power Payback Program
The Arizona Power Payback Program is an initiative enabling residents and businesses to adopt solar energy, reduce energy costs, and contribute to sustainability. Participants can install solar panels, generate excess power, earn Net Energy Metering (NEM) credits, and use them to offset future electricity bills and potentially eliminate expenses.
When considering a switch to solar power in Arizona, obtaining quotes from multiple companies is essential to find the best deal. Balancing quality with affordability and considering financing options are essential steps in making an informed decision about your solar energy investment.
Start Your Solar Journey
Want to switch to solar in Arizona? Don’t hesitate to contact us. Solar Optimum is an award-winning solar provider offering premier solar energy solutions across the country. Start your solar journey today and take the first step toward energy independence.
