How Much Is Solar in Phoenix, AZ? $2.21/W, 10.7–19.0-Yr Payback

In Phoenix, AZ, an 8 kW system at $2.21/W produces about 1,688 kWh per kW and pays back in roughly 10.7–19.0 years at 13.46–16.45¢/kWh with the federal credit at $0.

Updated September 2026 · Source: EIA Electric Power Monthly Table 5.6.A (July 2026 data) · next EIA update ~Oct 23

On this page: CalculatorTableHow we calculatedSources

Phoenix against the rest of Arizona

Across the 3 Arizona cities with their own modeled figures, production spans 3.0% — Flagstaff at 1,661 kWh per kW to Tucson at 1,711. Every column except production is identical down this table: same 15.4¢/kWh retail rate, same export regime, same $2.21/W installed cost. The payback differences are caused by weather and nothing else.

Against the state figure, Phoenix runs 0.2% above Arizona’s 1,685 kWh per kW — a payback 6.2 years shorter than the statewide 16.9-year estimate on the same hardware at the same price.

Sonoran Desert sun, minus a heat penalty

Phoenix has close to the best irradiance in the United States and one of the worst thermal environments for silicon. Rooftop cell temperatures past 150°F are routine in July, and module output falls roughly 0.3-0.4% per degree Celsius above 25°C. The 1,688 figure already carries that loss; it is why Phoenix does not lead this dataset despite leading on raw sunshine.

Two design consequences worth raising with an installer: standoff height and airflow beneath the array measurably affect operating temperature, and microinverters mounted under modules in this climate are working in a harsher thermal environment than their datasheet ratings assume. Dust accumulation between monsoon rains is a smaller but real recurring loss.

Your utility, officially

Arizona’s average residential rate is 15.4¢/kWh, but the bill in Phoenix comes from APS (Arizona Public Service) at 16.45¢ — 7.0% above the state figure, one of 2 utilities serving the metro. These are the residential figures Phoenix’s utilities reported to the U.S. Energy Information Administration on Form EIA-861 for 2024 — computed as revenue ÷ sales from the official file, not estimated:

How exports are treated matters as much as the headline price: APS (Arizona Public Service) is modeled here under the state’s net billing rules, and that treatment is baked into every payback figure on this page.

If an EV is in the picture, note that Arizona’s major utilities run the time-of-use tariffs our EV + TOU whole-home calculator ships presets for — worth running before sizing an array, because overnight charging is load daytime solar cannot touch. (And if the EV itself is still hypothetical, check where the EV tax credit stands in 2026 first.)

Phoenix is the only city on this site where the most important solar question is a street address. The metro is split between two utilities that share almost nothing: Arizona Public Service (APS), investor-owned, with 1,256,120 residential customers paying an average of 16.45¢/kWh, and Salt River Project (SRP), a political subdivision of the state, with 1,053,407 residential customers paying 13.46¢. The boundary between them tracks the valley’s old irrigation-district geography rather than city limits, so two houses a mile apart can face different prices, different rate designs, and entirely different deals for exported power.

Here is why the ownership distinction matters more than the 3¢ price gap. APS answers to the Arizona Corporation Commission, so the state’s Resource Comparison Proxy (RCP) export regime described on our Arizona page binds it — exports credited below retail, under a rate that steps down on an annual cycle each October 1. SRP answers to no regulator at all; its publicly elected board sets everything. The RCP does not apply to SRP, which writes its own solar price plans and has historically favored designs with demand charges — a component billed on your peak draw rather than your total usage, which changes solar math in ways a simple per-kWh comparison never captures. Confirm the current solar plan lineup on SRP’s own site before you sign anything, because no state rule constrains what that lineup looks like next year.

The adoption data is lopsided in an interesting way. SRP reported 59,735 residential net-metering customers and 393.22 MW to EIA for 2024 — roughly 6.6 kW per home. APS, the state’s largest utility, reported no residential net-metering figures in the same file at all, so there is no honest way to compare uptake across the boundary.

On rate structure: APS’s residential menu leans heavily time-of-use, with plan choice mattering a great deal for a solar home; the official comparison is at aps.com . SRP’s standard plan is priced seasonally with time-of-use options alongside it, but solar customers are steered onto solar-specific plans its board approves.

One more twist: cheap power cuts both ways. SRP’s 13.46¢ rate makes monthly bills easier to live with, but it also means every self-consumed solar kilowatt-hour saves you less than it would next door in APS territory. The same panels, on the sunnier-priced side of the line, pay for themselves noticeably faster — which is a strange thing for a canal boundary drawn a century ago to decide.

Source: EIA Form EIA-861, 2024 final release , accessed 2026-09-02. Average price is total residential revenue divided by total residential sales for the year — your own rate depends on your tariff and usage tier.

Who else serves the metro

Phoenix itself already splits between two main utilities, APS at 16.45¢ and Salt River Project at 13.46¢, and the wider 14-county EIA-861 area adds more: Navopache Electric Cooperative at 13.4¢, Sulphur Springs Valley Electric Cooperative at 13.5¢, and the USBIA-San Carlos Project at 19.5¢. That range runs about 3.05¢ below APS’s rate and 3.05¢ above it — wide enough that a payback figured on one system wouldn’t hold on another, since export rules vary by utility as much as price. Arizona’s July 2026 state average, 15.38¢, is a later, differently sourced number. A ZIP code, not city limits, determines which utility applies.

The exact answer is a ZIP question, not a city question: look up your utility by ZIP . Candidates: utilities EIA-861 lists in 14 service counties of the metro’s main utilities; prices are 2024 revenue ÷ sales from the official file.

RCP steps down every October

Arizona replaced net metering with the Resource Comparison Proxy in 2016. Exports are credited at a rate set annually by the Corporation Commission, it steps down each 1 October, and the rate you lock at interconnection is fixed for ten years.

So in Arizona, when you interconnect is worth money. A system energized before the annual step-down locks the higher rate for a decade. And because RCP credit sits well below Phoenix’s 13.46–16.45¢ retail rates, self-consumption is where the value is — which in Phoenix is convenient, since air conditioning load runs in phase with generation for months at a time.

What Arizona pays Phoenix for exported power

Arizona does not credit exports at the retail rate, and that rule reaches Phoenix unchanged. The program is Resource Comparison Proxy (RCP) , in force since 2016, crediting surplus power at an assumed 4.6¢/kWh, about 30% of retail, because no per-kWh figure is published against a retail rate of 15.4¢.

Because a typical home uses only about 40% of its generation as it is produced, most of what a Phoenix array makes is sold at that lower rate. That is why the payback above is 10.7–19.0 years and not the 9.4 years the same hardware would return under full-retail net metering. Raising self-consumption is the lever that closes the gap.

RCP steps down on an annual cycle each 1 October. APS’s own rate was not confirmed from a primary source.

Sources and method

• Production: modeled with PVGIS v5.2 PVcalc (European Commission JRC) using the PVGIS-NSRDB radiation database — the same NREL satellite dataset PVWatts draws on for the Americas. Assumptions: 4 kWp, standard c-Si, 14% system loss, roof mounting, 20-degree tilt, due south, horizon shading on. The 1,688 kWh per kW figure for Phoenix is a modeled location point, not an interpolation from the Arizona average. PVGIS is free to use with JRC attribution requested; the underlying NSRDB is public domain (NREL/DOE).
• Real-roof derate: a separate 10% deduction for azimuth, pitch and shading, applied in the shared model rather than folded into the production data — so you can adjust it if your roof is genuinely unobstructed.
• Electricity rate: U.S. Energy Information Administration, average price by state . This is Arizona’s residential average; EIA does not publish a Phoenix figure, so the state rate is used and labeled as such.
• Export rules: Resource Comparison Proxy (RCP) , from our Arizona state page and the shared export-rules dataset behind it.
• State average rate: EIA Table 5.6.A, July 2026 data (released Sep 2026), used for every state-average comparison on this page.
• Payback model: shared with the solar savings calculator and the state pages — 2.5%/yr utility inflation, 0.5%/yr degradation, $150/yr running costs, one $2,000 inverter replacement in year 14, federal credit $0. The rest of the toolset — battery, sizing, financing — is under all calculators .
• Incentives: DSIRE . City and utility programs change more often than state ones — check yours directly.

Electricity rate, export regime, production figure and installed cost on this page were last verified on 30 August 2026. Export credits reset on annual tariff cycles and incentive budgets run out mid-year, so treat every figure as a snapshot at that date and confirm current terms before acting. Nothing here is tax or financial advice.

Frequently asked questions

Sources: U.S. Energy Information Administration (EIA) electricity rates · DSIRE incentive records · public IRS/OBBBA guidance. Figures are modeled estimates, not quotes or tax advice. See our methodology.

Compare with the rest of Arizona

• Solar panel cost in Arizona — The statewide picture: Arizona’s rate, incentives, export rules and the 1,685 kWh per kW average this page corrects.
• Solar panel cost in Tucson — 1,711 kWh per kW and a 16.7-year payback — better than Phoenix on identical hardware.
• Solar panel cost in Flagstaff — 1,661 kWh per kW and a 17.1-year payback — worse than Phoenix on identical hardware.
• Solar panel cost in Las Vegas — 1,689 kWh per kW in Nevada — the closest production match to Phoenix in our data.
• Solar panel cost in Lubbock — 1,682 kWh per kW in Texas — the closest production match to Phoenix in our data.
• All city solar figures — The 66 US cities with their own modeled production data, and the spreads between them.