Solar payback in Arizona (2026)
In Arizona, a typical 8 kW home-solar system costing about $24,000 ($3/W, no federal credit in 2026) has an estimated simple payback of 9.4 years and roughly $54,660 in net savings over 25 years. This assumes an average rate of 15.59¢/kWh and ~1,850 kWh produced per kW each year.
Source: EIA & NREL. Data as of March–June 2026.
Arizona has the best sun resource of any state, so each panel produces more. Rates are moderate and net billing (rather than full retail net metering) applies, so self-consumption and batteries improve returns.
Arizona solar payback at a glance
| Metric | Value (AZ) |
|---|---|
| Average residential rate | 15.59 ¢/kWh |
| Peak sun hours (daily avg) | 6.5 h |
| Production factor | 1,850 kWh/kW/yr |
| 8 kW system annual output | 14,800 kWh |
| Est. up-front cost (8 kW @ $3/W) | $24,000 |
| Year-1 bill savings | $2,307 |
| Estimated simple payback | 9.4 years |
| Estimated 25-year net savings | $54,660 |
Source: EIA Electric Power Monthly (Mar 2026) & NREL PVWatts. Data as of June 2026.
Run your own numbers for Arizona
The calculator below is pre-filled with Arizona's electricity rate and production factor. Change the system size, cost per watt or escalation to match your own quote.
Figures are planning estimates that ignore financing, inverter replacement and maintenance. They assume cash purchase, 3%/yr rate escalation and 0.5%/yr panel degradation. See the methodology and disclaimer.
How Arizona compares
Browse all states to compare payback, or read the guides: Is solar worth it in 2026 without the federal credit? and solar payback period explained.
Frequently asked questions
What is the solar payback period in Arizona?
For a typical 8 kW system costing about $24,000 ($3/W) with no federal tax credit in 2026, the estimated simple payback in Arizona is roughly 9.4 years, based on an average residential rate of 15.59¢/kWh and a production factor of about 1,850 kWh per kW per year. Your actual payback depends on your quote, usage and net-metering rules.
Is solar worth it in Arizona now that the federal tax credit has expired?
The 30% federal residential credit (Section 25D) expired on December 31, 2025, which raises the up-front cost of 2026 installs by about 30%. Arizona has the best sun resource of any state, so each panel produces more. Rates are moderate and net billing (rather than full retail net metering) applies, so self-consumption and batteries improve returns.
How much electricity does an 8 kW system produce in Arizona?
About 14,800 kWh in year one (8 kW × 1,850 kWh/kW), declining slowly as panels degrade ~0.5% per year.
Other states
Last updated: 2026-06-14