According to data from EnergySage, the typical pre-incentives price for a home solar system in Arizona was $28,426 in the second half of 2023, which is on the lower end compared to other states. Despite policies that can make going solar in Arizona less cost-effective, the state has the fifth-largest installed solar capacity in the nation. Solar costs in Arizona have dropped by 43% in the last decade.
The average home solar power system size in Arizona at the end of 2023 was 12.4kW, slightly higher than the national average due to higher household electricity use. The low cost per watt of solar in Arizona makes systems cost-effective, with the federal solar tax credit potentially reducing the cost by 30%.
The average payback period for a solar system in Arizona is 11 years, with 20-year savings estimated at $19,628. Solar costs in Arizona have been trending down, dropping by 2% between the first and second half of 2023. State incentives and policies in Arizona, such as the federal solar tax credit and the Renewable Energy Standard and Tariff, have encouraged solar installations in the state.
Net metering programs in Arizona have been phased out and replaced with the Resource Comparison Proxy program, which compensates solar customers at a lower rate for excess power sent to the grid. It’s advisable to go solar sooner rather than later in Arizona due to the decreasing export rates under the RCP program. The cost of home solar batteries in Arizona averages $8,526 after the federal tax credit, according to EnergySage. These batteries can be beneficial due to various reasons in the state. One reason is that they improve the economics of home solar under net billing by allowing you to store excess energy for later use instead of sending it back to the grid at a lower credit. Additionally, most Arizona solar customers are on a time-of-use (TOU) electricity rate, where electricity rates are lower during low-demand times and higher during high-demand times. A battery can help lower costs by storing energy generated during the day for use in the evening. Some TOU rate plans in Arizona also include demand charges, which can spike your electricity bill during peak usage times. Batteries can help lower these charges by storing electricity for use during these times. Furthermore, with heat waves straining the power grid, batteries provide reliable energy backup, as solar systems shut off during outages for safety reasons. Battery costs are expected to decrease, and with residential demand response programs in Arizona, homeowners can benefit from shifting energy use to lower-demand times with the help of home solar batteries. Under net billing, known as RCP in Arizona, the electricity you feed back into the grid is compensated at a lower rate. This rate may be the avoided cost rate or the value of the electricity to the grid at the time it is returned. Typically, your system will generate the most electricity during the middle of the day when demand is lower. As a result, under the avoided cost rate, this electricity is considered less valuable and credited at a significantly lower rate compared to NEM.
Can I install solar panels now and add a battery later? Yes, you can. If energy storage is not suitable for you currently, you can still install solar panels and integrate a battery at a later time when costs decrease. Unlike solar panels, energy storage will not be impacted by potential reductions in Arizona’s RCP net billing export rate. following sentence:
The dog ran quickly across the yard.
The dog sprinted through the yard with great speed.