Are you experiencing sticker shock each time you receive your electric bill? It’s not your imagination; you’re paying more for your electricity than ever before. In January 2023, the average price of a kilowatt of electricity was 12.78 cents, with the same kilowatt costing 13.33 cents in January 2024. It’s perfectly natural to look at your latest electric bill and wonder if it’s time to install a few solar panels. The truth is that now is an excellent time to install solar panels, as the process is more affordable than ever.
Costs Connected to Installing Residential Solar Panels in Arizona
The exact cost of installing solar panels on your home is impacted by a few different factors, including:
- The size and complexity of the solar system you require
- The brand and type of solar panel you choose
- Your home’s energy consumption
Cost Savings of Solar Panels in Arizona
When it comes to solar panels, the initial cost is much cheaper in Arizona compared to other states. The lower upfront cost, paired with several cost-saving programs make installing solar panels very appealing.
Federal Tax Credit
The Federal Clean Energy Credit generates the biggest cost savings. This program’s setup for 2024 allows you to recoup 30% of the installation costs of your solar system. The only downside is that you won’t see that return until you file your 2024 federal taxes.
Arizona’s Sales Tax Exemption
Arizona’s Solar and Wind Equipment Sales Tax Exemption eliminates the 5.6% sales tax from the purchase price of your new solar panels and battery. The state also has an Energy Equipment Property Tax Exemption. This program uses solar panels to increase property value, but since that increase is from an energy savings program, it doesn’t increase your property taxes.
Payment Option
For those paying for panels with cash or a loan, you can experience an increase in your cost savings over time as your panel production offsets the upfront investment. Loans or PPAs are great options for those who don’t have the money to pay in full but want to start enjoying the benefits of solar.
Average Payback Period in Arizona
Just like the exact cost of solar panel installation varies from one home to another, the length of time it takes to see a complete return on your investment will also vary. This can depend on the cost of the installation, how much electricity you use and your solar panel’s efficiency. On average, it takes about 7 years in Arizona. The good news is that the rate of return can be calculated with the PV Watts calculator.
Open the calculator. Enter your location and information about the solar system you’re considering, and the calculator does the rest. It provides you with how much you can save per kilowatt-hour every single year. Once you have this number, multiply it by the amount you’re currently paying the electric company. Most Arizona homeowners are surprised to find that they’re able to see a complete return on their investment in about seven years.
Start Saving With Solar Optimum
To save even more on your solar system, it’s best to work with a knowledgeable solar provider. Solar Optimum has years of experience serving Maricopa County and the Greater Phoenix area. Contact us to learn more about the benefits of going solar in Arizona, or download Solar Optimum’s Ultimate Guide to Going Solar.
