Is solar worth it in Phoenix in 2026?
A roof in Phoenix produces about 1,772 kWh a year per kW of panels. For a home with a $150 monthly bill, a 6.6 kW system costs about $20,395 at Arizona's median price and pays for itself in roughly 18.3 years, with no federal tax credit.
1,772kWh per kW a year
Source: PVGIS, NSRDB data
15.4¢per kWh
Source: EIA, 2026 year to date
$3.10per watt
Source: Berkeley Lab
Calculator · 2026 data, no federal tax credit
How long would solar take to pay for itself?
Simple payback
18.3 years
- System size
- 6.6 kW
- Installed cost
- $20,395
- Savings, year one
- $1,116
- Net over 25 years
- $5,893
Sized to cover your yearly use at today's price. Panels lose 0.5% a year; prices held flat. Method
How Phoenix homes get paid for solar
Export rules are set at the state and utility level, not by the city. Phoenix is under Arizona's net billing: APS and TEP credit exports at a fixed Resource Comparison Proxy rate locked for 10 years, and SRP uses its own export credits under separate price plans. The full rules, incentives and sources are on theArizona page.
Phoenix: your utility, incentives and permits
Main utility: Arizona Public Service (APS) and Salt River Project (SRP), depending on your address. Checked 2026-10-27 against the sources below.
Two utilities sell power in the Phoenix area, and your address decides which one is yours: Arizona Public Service (APS) or Salt River Project (SRP). APS publishes a service area map for the Phoenix metro, and SRP describes itself as the largest electricity provider in the greater Phoenix area. The rules below differ a lot between the two.
What APS pays for exported power
APS buys the power you send to the grid under its RCP export rider, a net billing arrangement. The surplus earns a monthly bill credit. Credits roll over month to month, and after the December bill a check is issued if the remaining credit is more than $25.
The RCP rate is set for each yearly group of new solar customers. For systems whose interconnection application was filed from September 1, 2026 through August 31, 2027, the rate is $0.05554 per kWh. The group before it, to August 31, 2026, got $0.06171. Your starting rate applies for 10 years from interconnection, then follows the rate in effect at that time. State rules limit each year’s cut to 10%. To keep a rate, you must finish the installation and get city approval within 180 days of your application (270 if APS or a third party causes the delay). APS also lists a second option, Renewable Energy Net Billing (EPR-2), which pays different on-peak and off-peak rates in summer and winter.
What SRP does
SRP’s E-27 Customer Generation Price Plan nets each billing cycle: SRP subtracts the kWh you send to the grid from the kWh you take, and if the result is negative, you are credited for the net kWh at the plan’s retail per-kWh price, tracked by time-of-use period. E-27 is scheduled to be eliminated with the November 2029 billing cycle, and anyone still on it then moves to the E-16 price plan, so ask SRP which solar price plan a new system would start on.
Incentives in 2026
- No federal credit. The 30% credit is not available for property placed in service after December 31, 2025; see what ended with the federal credit.
- State income tax credit. Arizona law allows a credit of 25% of the cost of a solar energy device at your home, up to $1,000 per tax year, and no more than $1,000 in total for the same residence.
- Sales tax. Arizona deducts the amount received from sales of solar energy devices from the retail sales tax base.
- Property tax. Solar devices for on-site use are considered to add no value to the property for appraisal.
Permits and connection
The City of Phoenix Planning and Development Department accepts SolarAPP+ approved designs for single-family or duplex rooftop systems. Excluded are battery storage, ground-mounted or ballasted systems, and homes in a Historic Preservation district or FEMA Special Flood Hazard Area. SolarAPP+ charges a processing fee. You then apply through the city’s online permit portal with the approval ID. A permit revision costs a $37.50 record change fee. The Fire Department requires a separate permit for photovoltaic and battery systems.
For APS homes, the sequence is: your installer files the interconnection application, APS approves it, the city inspects, APS installs meters, and APS issues Permission to Operate. The wider Arizona rules are on the state page.
Sources
- APS: understanding rooftop solar, buyback rates and the connection process
- APS: renewable energy riders, including the RCP export rider
- APS Rate Rider RCP, resource comparison proxy export rate (effective September 1, 2026, ACC Decision No. 82122)
- APS: service area maps
- SRP: E-27 Customer Generation Price Plan ratebook (November 2025 billing cycle)
- SRP media release, with SRP's description of its service
- Arizona Revised Statutes 43-1083, credit for solar energy devices
- Arizona Revised Statutes 42-5061, retail classification (subsection M, solar energy devices)
- Arizona Revised Statutes 42-11054, standard appraisal methods (subsection C, solar devices)
- IRS: Residential Clean Energy Credit
- City of Phoenix Planning and Development: SolarAPP and photovoltaic projects
- City of Phoenix: SolarAPP eligibility and process (TRT/DOC/00290)
Why the city matters
Two things change from one city to another in the same state: the sun, which sets how many panels you need, and the utility, which sets what exported power is worth. Phoenix gets 1,772 kWh per kW a year on a south-facing roof at a 20° tilt, so covering a year of use for a $150 bill at 15.4¢ takes about 6.6 kW, roughly 17 panels of 400 W. Electricity prices in the calculator are the Arizona residential average; your utility's rate can be higher or lower, so put your own bill in.
Other Arizona cities: Tucson.
Method: how we calculate payback. Compare all states in theranking or size a system with the panel calculator.