Guide to solar panels in Tucson, AZ (2025)
Updated August 18, 2020
Tuscon is a great place to go solar. You’re probably using Tuscon Electric Power (TEP) as your utility. TEP offers net billing to their customers, so they pay for any excess solar energy their solar customers send to the grid.
The most significant incentive to install solar panels in Tuscon is the 26% federal tax credit. However, the tax credit is set to step down to 22% at the end of 2020. This means in order to get the most solar savings, the best time to go solar in Tuscon is now.
Another key incentive for going solar in Tuscon is the Arizona solar tax credit, which is equal to 25% of the costs of a solar system, up to $1,000. By entering your address into our solar panel calculator, you can see what other local incentives are available in your area.
On this page:
Current cost of solar panels in Tucson
Showing data for:
Prices based on a 6.7kW system, after 30% federal tax credit
Solar prices near you
Net profit (savings less system cost)
$27,275-$33,336
Payback period
8.1-9.9 years
Recommended size for the selected utility bill
6.7kW
Solar panel cost calculator
Tucson solar panel cost & savings calculator
Current solar incentives and tax credits available in Tucson, AZ
Net metering
Arizona does not offer full retail net metering. Instead, Arizona utilties compensate their solar customers who export energy to the grid with an on-bill 'export credit'. This export credit is worth less than the full retail rate of electricity.
For instance, Tuscon resdients who use TEP will recieve $0.0964 per kilowatt hour (kWh) of excess solar energy they send to the grid. This is slightly lower than TEP's retail rate of electricity of around $0.11 per kWh.
Arizona solar energy tax credit
Not only do Arizona residents get to take advantage of the federal tax credit, but they can also receive the state’s solar energy credit. Arizona’s solar energy credit is equal to 25% of the costs of a solar system, up to $1,000. That is a significant amount of savings on your income taxes.
The 30% federal solar tax credit explained
The most significant incentive to install solar panels for homes and and businesses is the federal tax credit. Right now, the federal tax credit is equal to 30% of the total cost to install a solar system. The amount of the tax credit is then deducted from your federal taxes. You can claim the credit over several years if the amount you owe in taxes is less than the amount of your tax credit. You can only take advantage of the federal tax credit if you pay federal income taxes. At the end of 2032, the amount of the tax credit will fall to 26%. Even though there is no rush to get the maximum tax credit value, you don’t want to wait when it comes to a financial investment like installing solar. The best time to go solar is now.
How much will solar panels on my home save me?
The answer to this question depends on your electricity usage. Generally speaking, the higher your power usage, the greater your potential savings are from installing solar.
The average monthly electricity usage in Arizona is about 1,030 kWh per month. However, you are most likely using a lot more than this since this average includes small apartments and condos.
The Tucson solar panel savings calculator uses our database of electric rates from local utilities to convert your monthly power bill into how much electricity your home uses. From there, the calculator can work out how many solar panels you need to offset your power usage, how much a solar system will cost based on prices of local solar companies, and the amount of money you will save on your electric bill.
Cost and savings for a 9.49 kW average-sized solar system in Tucson
Cost per watt range
$2.4 - $2.93
Average payback
8.1 - 9.9 years
Annual power production
14,212 kWh
Levelized cost of solar energy
5¢ /kWh
If you don't get solar
22¢ /kWh
(forecast avg Arizona electric rates over the next 25 years)
Average solar savings on this system over the next 25 years
$44,992
(Savings shown after repayments of capital)
Related topics:
Are solar panels worth it in Tucson
Solar panels have fallen in price by more than 80% in the last ten years. In 2025 they also remain subsidized by the 30% federal tax credit and the net metering law making them an excellent investment. They offer a return well above the long term average return from both the share market and also property investment.
Another way to look at this question is the levelized amount you will pay for each kWh of power you will use over the next 25 years with and without solar panels. As you can see below the savings are significant.
Going solar in AZ
Check out all of the ways energy providers of can help you be more energy efficient and save money.
Table 2: Available incentive programs
| Incentive name | Eligibility | Type |
|---|---|---|
| Residential Clean Energy Tax Credit | Federal | Personal Tax Credit |
| Net BIlling | State | Net Metering |
| Solar and Wind Equipment Sales Tax Exemption | State | Sales Tax Incentive |
| Energy Equipment Property Tax Exemption | State | Property Tax Incentive |
| Residential Solar and Wind Energy Systems State Tax Credit | State | Personal Tax Credit |
Table 2: Available incentive programs
|
Eligibility: Federal incentive
Type: Personal Tax Credit
|
|
Eligibility: State incentive
Type: Net Metering
|
Note: Please keep in mind that the best source of up-to-date information on incentives are the solar installers who specialize in your area.
