How to Get Solar Panels in Phoenix: Incentives Guide

Solar energy is no longer a futuristic concept—it’s a practical, cost-effective, and environmentally responsible choice for homeowners in Phoenix, Arizona. With over 300 days of sunshine annually, Phoenix ranks among the top cities in the United States for solar potential. But while the climate is ideal, navigating the path to solar panel installation can feel overwhelming without clear guidance on incentives, regulations, and local programs. This comprehensive guide walks you through every step of securing solar panels in Phoenix, with a sharp focus on maximizing financial benefits through state, federal, and local incentives. Whether you’re a first-time homeowner, a long-time resident looking to reduce utility bills, or an eco-conscious decision-maker, this guide equips you with the knowledge to make informed, strategic choices that deliver long-term savings and energy independence.

Step-by-Step Guide

Getting solar panels in Phoenix is a structured process that combines research, planning, financing, and installation. Follow these seven key steps to ensure a smooth transition to solar energy while fully leveraging available incentives.

Step 1: Assess Your Home’s Solar Potential

Before investing in solar, determine whether your property is suitable. The ideal rooftop for solar panels faces south, has minimal shading from trees or nearby structures, and has sufficient surface area—typically at least 300–500 square feet for a standard residential system. Phoenix’s flat terrain and low cloud cover make it one of the most favorable locations in the country, but roof condition and angle still matter. Use free online tools like Google Project Sunroof or the National Renewable Energy Laboratory’s PVWatts Calculator to estimate your home’s solar production based on address, roof pitch, and local weather patterns. These tools factor in historical irradiance data specific to Maricopa County, giving you a realistic projection of annual kilowatt-hour (kWh) output.

Additionally, inspect your roof’s age and material. If your roof is older than 15 years or made of fragile materials like clay tile, consider a roof replacement before installing solar panels. Many reputable installers offer bundled roof and solar packages that can reduce long-term costs.

Step 2: Understand Arizona’s Solar Incentive Landscape

Arizona offers a robust set of incentives that significantly reduce the upfront cost of solar installations. Unlike some states, Arizona does not have a state-level solar tax credit, but it compensates with other powerful benefits:

• Federal Solar Investment Tax Credit (ITC): As of 2024, homeowners can claim 30% of their total system cost (including equipment and installation) as a federal tax credit. This credit is applied directly to your federal income tax liability and is available through 2032, with a gradual step-down to 26% in 2033 and 22% in 2034. There is no income cap or maximum credit limit, making it one of the most valuable incentives nationwide.
• Property Tax Exemption: Arizona law (A.R.S. § 42-11152) exempts the added value of solar energy systems from property tax assessments. This means installing solar panels will not increase your annual property tax bill, even though your home’s market value may rise.
• Sales Tax Exemption: Arizona waives the 6.6%–8.6% state and local sales tax on solar panel equipment and installation labor. This can save you hundreds to over a thousand dollars depending on system size.
• Net Metering: Arizona’s investor-owned utilities—including SRP, APS, and TEP—are required by state law to offer net metering. This allows you to receive full retail credit for excess electricity your panels send back to the grid. These credits roll over monthly and can offset winter usage when solar production is lower.

These incentives stack together, meaning you can combine the federal tax credit with sales and property tax exemptions for maximum savings. For example, a $20,000 solar system could receive $6,000 in federal tax credits, $1,300–$1,700 in sales tax savings, and no increase in property taxes—reducing your net cost to under $12,000 before any utility rebates.

Step 3: Research Local Utility Programs

Phoenix residents are served by three primary utilities: Salt River Project (SRP), Arizona Public Service (APS), and Tucson Electric Power (TEP)—though TEP serves only the southern edge of the metro area. Each utility offers unique programs that can further reduce your solar investment.

SRP’s Solar Program: SRP offers a $0.10 per watt rebate for residential systems up to 10 kW, capped at $1,000. While modest, this rebate is applied at the time of installation and reduces your out-of-pocket cost immediately. SRP also provides a “Solar Performance Payment” for systems that exceed production benchmarks, rewarding efficiency.

APS’s Solar Program: APS offers a $0.07 per watt rebate (capped at $700 for systems under 10 kW). Additionally, APS has a “Solar Energy Incentive Program” that pays $0.02–$0.04 per kWh for excess energy exported during peak hours (3–7 p.m.), effectively creating a time-of-use bonus for solar owners.

Both utilities require you to apply for rebates before installation. Visit their official websites to download applications and confirm eligibility. Note that rebates are often limited by annual funding caps and may be claimed on a first-come, first-served basis.

Step 4: Obtain Quotes from Reputable Installers

Not all solar companies are equal. In Phoenix, the market is saturated with both established firms and fly-by-night operators. To avoid scams and ensure quality, get at least three detailed, itemized quotes from licensed and insured contractors. Look for installers with:

• Active Arizona Registrar of Contractors (ROC) license (e.g., ROC

  123456)

• North American Board of Certified Energy Practitioners (NABCEP) certification
• At least five years of experience in Maricopa County installations
• Transparent pricing with no hidden fees
• Strong online reviews and local references

Ask each installer to provide a breakdown of:

• Equipment brands (e.g., Tesla, LG, SunPower, Enphase)
• Panel efficiency ratings (aim for 20%+)
• Inverter type (string vs. microinverters)
• Warranty terms (panel: 25+ years; inverter: 10–15 years)
• Estimated annual production (kWh/year)
• Payback period and lifetime savings projections

Compare quotes not just on price, but on projected energy output. A slightly more expensive system with higher-efficiency panels may generate 15–20% more power over its lifetime, accelerating your return on investment.

Step 5: Secure Permits and Approvals

Arizona requires both building and electrical permits for solar installations. Your installer typically handles this, but you should verify the process. In Phoenix, permits are issued through the City of Phoenix Building and Development Services Department. The application requires:

• Site plan showing panel layout
• Electrical schematics
• Structural engineering analysis (if roof modifications are needed)
• Proof of insurance

Permit processing usually takes 1–3 weeks. Once approved, inspections are scheduled after installation. The city will check for code compliance, proper grounding, labeling, and disconnect switches. Failure to pass inspection delays utility interconnection and prevents you from receiving incentives.

After permitting, you must apply for interconnection approval from your utility. This ensures your system can safely connect to the grid. APS and SRP use online portals for this step—submit your system specs and inverter details. Approval typically takes 5–10 business days.

Step 6: Install and Activate Your System

Once permits and approvals are secured, installation takes 1–3 days for most residential systems. The process includes mounting racking, installing panels and inverters, wiring to your electrical panel, and connecting to the meter. After installation, a final inspection is conducted by the city and utility. Only after passing all inspections will your utility install a bi-directional meter and activate net metering.

At this point, your system is live. You’ll begin generating electricity immediately. Monitor your production using the inverter’s app or utility portal. Keep all documentation—permits, contracts, rebate applications, and inspection reports—for tax filing and future resale value.

Step 7: Claim Your Incentives

After installation, file for your federal tax credit using IRS Form 5695 when you file your annual tax return. Keep your Solar Energy System Credit Worksheet and a copy of your installer’s invoice showing total cost. The credit is non-refundable but can be carried forward to future tax years if your liability is insufficient in year one.

For utility rebates, submit your completed application with proof of installation (photos, permit copies, and final inspection reports). Most utilities pay rebates via check or direct deposit within 4–8 weeks. Sales tax exemption is automatic if your installer is licensed and follows state guidelines—verify with your contractor that the exemption was applied at checkout.

Finally, register your system with the Database of State Incentives for Renewables & Efficiency (DSIRE) to ensure you’re eligible for future program updates.

Best Practices

Maximizing your solar investment in Phoenix requires more than just installing panels. These best practices ensure long-term performance, compliance, and financial optimization.

Choose High-Efficiency Panels with Strong Warranties

Phoenix’s intense UV radiation and heat can degrade lower-quality panels faster. Opt for Tier-1 manufacturers like SunPower, LG, or Panasonic, which offer degradation rates as low as 0.25% per year. This means after 25 years, your panels will still produce 93%+ of original output. Avoid bargain-bin panels with 0.7% annual degradation—they’ll lose nearly 40% output by year 25, drastically reducing your savings.

Install Microinverters or Power Optimizers

Traditional string inverters are vulnerable to partial shading. In Phoenix, even a small shadow from a chimney or tree can reduce output by 30% across an entire string. Microinverters (one per panel) or DC optimizers eliminate this issue by allowing each panel to operate independently. While slightly more expensive upfront, they increase annual production by 5–15% in shaded or complex roof environments.

Plan for Future Energy Needs

If you plan to buy an electric vehicle, install a pool pump, or expand your home, oversize your system by 10–20%. Arizona’s net metering policy allows you to export excess power, so building a larger system now avoids costly upgrades later. A 8 kW system today might become a 6 kW system after 10 years due to degradation—plan ahead.

Monitor System Performance Regularly

Use your inverter’s mobile app to track daily production. A sudden drop in output could indicate a fault, shading, or dirt buildup. Phoenix’s dry climate means dust accumulation is common—clean panels every 6–12 months with water and a soft brush. Avoid pressure washers, which can damage seals.

Document Everything

Keep digital and physical copies of:

• Contract with installer
• Equipment warranties
• Permit approvals
• Rebate applications and confirmations
• Utility interconnection agreement
• Final inspection reports

This documentation is essential for tax filings, insurance claims, and when selling your home. Homes with documented solar systems sell 3–4% faster and at a premium in Arizona.

Consider Adding Battery Storage

While not required for net metering, battery storage (like Tesla Powerwall or LG Chem) provides backup power during grid outages—increasingly common during Arizona’s monsoon season and extreme heat events. Batteries also allow you to store excess solar energy for use during peak rate hours, even if your utility doesn’t offer time-of-use billing. The federal ITC covers battery storage if paired with a solar system, making this a smart financial move.

Tools and Resources

Use these verified, up-to-date tools and resources to support your solar journey in Phoenix.

Online Calculators

• Google Project Sunroof: https://sunroof.withgoogle.com – Provides solar potential estimates based on satellite imagery and local weather data.
• NREL PVWatts Calculator: https://pvwatts.nrel.gov – Offers detailed kWh production forecasts using NREL’s meteorological database.
• EnergySage Solar Marketplace: https://www.energysage.com – Compares quotes from pre-vetted Phoenix installers with real-time pricing and incentive calculations.

Government and Utility Portals

• DSIRE (Database of State Incentives for Renewables & Efficiency): https://www.dsireusa.org – The most comprehensive source for state and local solar incentives. Filter by Arizona and Phoenix for accurate, current programs.
• SRP Solar Programs: https://www.srpnet.com/solar – Official rebate and net metering details.
• APS Solar Programs: https://www.aps.com/solar – Includes application forms and eligibility rules.
• City of Phoenix Building Permits: https://www.phoenix.gov/building – Apply for permits and check inspection status.

Financial and Tax Resources

• IRS Form 5695: https://www.irs.gov/forms-pubs/about-form-5695 – Official form for claiming the federal solar tax credit.
• AZ Department of Revenue – Property Tax Exemption: https://azdor.gov – Details on the solar property tax exemption statute.
• Arizona Solar Energy Industries Association (AzSEIA): https://azseia.org – Industry advocacy group offering consumer guides and installer directories.

Community and Education

• Arizona State University (ASU) Solar Power Program: https://solar.asu.edu – Offers free public webinars and technical resources on residential solar.
• Phoenix Public Library – Sustainability Workshops: Check local branches for free solar information sessions.

Real Examples

Real-world case studies illustrate how Phoenix homeowners benefit from solar incentives.

Case Study 1: The Martinez Family – 7.5 kW System

Located in Scottsdale, the Martinez family installed a 7.5 kW system using SunPower panels and Enphase microinverters in early 2023. Total installed cost: $21,500.

• Federal ITC (30%): $6,450
• Arizona Sales Tax Exemption (7.6%): $1,634
• SRP Rebate ($0.10/watt): $750
• Net Cost After Incentives: $12,666

Annual production: 12,800 kWh. Their previous annual electricity bill was $2,100. With net metering, their net utility bill dropped to $180/year (only minimal connection fees). Payback period: 6.1 years. Over 25 years, they saved over $52,000 in electricity costs.

Case Study 2: The Chen Residence – 10 kW System with Battery

In Tempe, the Chens installed a 10 kW system paired with a Tesla Powerwall 2 in 2024. Total cost: $32,000.

• Federal ITC (30%): $9,600
• APS Rebate ($0.07/watt): $700
• Sales Tax Exemption (8.1%): $2,592
• Net Cost After Incentives: $19,108

Annual production: 17,200 kWh. With battery storage, they now use 95% of their solar energy, reducing grid dependence. During a 2024 summer blackout, the Powerwall powered their home for 18 hours. Their annual utility bill is now $85. Payback period: 7.3 years. Lifetime savings estimated at $78,000.

Case Study 3: The Thompsons – Solar + EV

The Thompsons added a 6 kW system in 2022 to offset their new Tesla Model Y. Total cost: $18,000.

• Federal ITC: $5,400
• APS Rebate: $420
• Sales Tax Exemption: $1,458
• Net Cost: $10,722

System produces 9,800 kWh/year. Their EV consumes 3,500 kWh/year. Net grid electricity use: 6,300 kWh. Their annual utility bill dropped from $1,900 to $320. They now drive “free” using solar power. Payback period: 5.8 years.

FAQs

Do I need to own my home to get solar panels in Phoenix?

You must own your home or have the landlord’s written permission to install solar panels. Renters cannot install systems but can participate in community solar programs offered by SRP and APS, which allow you to subscribe to a shared solar farm and receive bill credits.

Can I get solar panels if my roof is old?

Yes, but it’s recommended to replace a roof older than 15 years before installation. Installing panels on a failing roof risks leaks and costly removal/reinstallation later. Many installers offer roof replacement bundled with solar, often at a discount.

How long do solar panels last in Phoenix’s heat?

High-quality panels are designed to withstand extreme temperatures. Most manufacturers guarantee 80–90% output after 25 years. Phoenix’s heat slightly reduces efficiency on the hottest days, but modern panels are tested to operate safely up to 185°F. Proper ventilation under panels helps mitigate heat buildup.

What happens if I move after installing solar?

Solar panels increase your home’s resale value. Buyers in Phoenix are highly motivated by solar due to high electricity costs. You can transfer the system to the new owner, who inherits the remaining incentives and utility agreements. Alternatively, you can remove and reinstall the system at your new home—though this is rarely cost-effective.

Are there income limits for solar incentives in Arizona?

No. The federal tax credit, property tax exemption, and sales tax exemption have no income caps. Utility rebates are available to all residential customers regardless of income.

Can I install solar panels myself in Phoenix?

Technically yes, but it’s strongly discouraged. DIY installations rarely qualify for rebates or net metering. Permits require licensed electrical work, and most utilities won’t interconnect a self-installed system. Professional installation ensures compliance, warranty validity, and access to incentives.

Do solar panels require maintenance in Phoenix?

Minimal. Rain washes away most dust, but periodic cleaning (once a year) improves efficiency. Check for debris, bird droppings, or shading from new tree growth. Inverters may need replacement after 10–15 years—factor this into long-term planning.

Is solar worth it in Phoenix if I don’t plan to stay long?

Yes. Even if you move in 5–7 years, you’ll benefit from reduced bills and increased home value. The average payback period in Phoenix is 6–8 years. If you stay beyond that, you enjoy nearly free electricity for the system’s remaining life.

Can I use solar to power my entire home?

Yes. A properly sized system (typically 8–12 kW for an average Phoenix home) can cover 100% of your annual electricity needs. With net metering, you effectively use the grid as a “battery,” storing excess summer production for winter use.

What if my utility doesn’t offer net metering?

All Arizona investor-owned utilities are legally required to offer net metering. If you’re told otherwise, contact the Arizona Corporation Commission to report non-compliance.

Conclusion

Getting solar panels in Phoenix is one of the most financially intelligent decisions a homeowner can make. With abundant sunshine, powerful federal and local incentives, and utility programs that reward clean energy production, the path to solar is clearer and more rewarding than ever. By following this guide—from assessing your roof to claiming your tax credit—you position yourself to cut electricity bills by 80–100%, increase your home’s value, and contribute to a cleaner, more resilient energy future.

The incentives are time-limited and subject to funding caps, so delaying action means missing out on savings. Start by running your home through Google Project Sunroof, request quotes from three certified installers, and apply for rebates before your system is installed. Every step you take today brings you closer to energy independence.

Phoenix doesn’t just have the sun—it has the policy, the infrastructure, and the community support to make solar work for you. Take the first step. The sun is already shining.