Full Guide to Residential Solar Panels In Phoenix (2021)

Home to an incredible mix of historic value and modern culture, Phoenix stands as the most populated capital in the entire country. This thriving metropolis is expanding every year. Backdropped with scenic national forests and mountains, this city harbors an array of cutting edge technology, immaculate cuisine, and some of this country’s greatest fine arts. With both feet planted firmly in the future, Phoenix has truly become one of the greatest cities for solar energy!

Before we start, here is our Solar Report Card for Phoenix:

More and more residents are opting to install solar panels on their homes. You’re probably seeing neighbors make the switch, and you’re curious to know if all those benefits you’ve heard about solar energy are real. We’ve put together this guide to help answer the big questions you may have. We’ll look at the benefits of solar energy (from a financial perspective and beyond), the total cost of your investment into solar panels, how to leverage some of the country’s greatest incentives available to you as a Phoenix resident, and of course the incredible savings you can expect!

Benefits of Solar

Everyone is talking about solar energy and the advantages that come with producing your own power, and there’s a reason for it. We’re going to break down some of the most impactful benefits that you can expect when you install your solar panels.

Electricity Bill Savings

Financially, this is one of the biggest benefits you can expect and one that gets most people excited. Paying for traditional electricity through utility companies is a cost burden we have all become used to. Prices on electricity continue to rise every year, and without an alternative, you are stuck paying higher and higher bills to support your home. Solar energy puts the power in your hands, saving you thousands of dollars over the life of your panels. Further down, we’ll dive deeper into exactly how much you can expect to save as a resident of Phoenix, AZ.

Environmental Impact

Electricity runs more and more of our daily life, and through high consumption, the drain that we put on our environment is only getting worse. The burning of fossil fuels puts toxins in the air that not only hurt our world but the very communities that we live and breathe in. It’s estimated that each household switching to solar energy removes as much carbon emission as driving a standard passenger car for 20 years!

Energy Independence

Energy outages can be caused by a number of reasons, from downed power lines to an unscheduled maintenance call. The last thing you want to experience on a sweaty hot summer day in Phoenix is losing power to your home. With traditional energy, you are at the mercy of a giant company simultaneously juggling millions of other citizens in the same city. Solar panels give you freedom and peace of mind because you don’t have to be reliant on anyone other than yourself for the power that your home needs!

The Cost of Phoenix Solar

So, the benefits sound incredible, but now you want to know what something so great is going to cost you. We not only want you to fully understand everything that goes into the total cost of your installation but how to get the best price possible. Below we have put together an infographic simplifying all the pieces that make up your total cost: You can see here that your estimated cost will come to $13,200. We calculated this number using a 5 kW solar panel system, which is the average-sized system in the Phoenix area. Covering approximately 1,500 sq. feet, this system will be capable of providing your home with all its energy needs. Now, this price can vary depending on the installers that you speak with, so we recommend that you talk to more than one. This way you can make sure you’re getting the best deal for your precise needs. So, now that we know our base price, let’s look at how you can cut thousands of dollars off your final price!

Incentives and Tax Credits of Phoenix Homeowners

Solar energy brings some amazing benefits to the table, and to help maximize these benefits, you want to make sure you’re taking advantage of all the incentives and credits available to you. To make this process as easy as possible, we have broken down the best of the best for you as a resident of Phoenix, AZ.

Federal Solar Tax Credit

The Federal Solar Tax Credit is the biggest incentive available, offering an enormous 26% rebate on your entire solar panel installation! It’s important to note that this credit may not be around forever, as it is set to expire in 2023. This means that if you are serious about taking the step to producing your own solar energy, sooner will be better than later. How much better? With a 26% return, you’re looking at $3,432 in savings from this incentive alone! That would bring your total investment down to an even better $9,768. This level of savings will not come again, so make sure you take advantage of it while it’s available!

Residential Arizona Solar Tax Credit

Unique to the beautiful state of Arizona, this tax credit reimburses 25% of the cost of your solar panels, up to $1,000 off your personal income tax for the year you install it. With 25% coming in above the maximum, you can expect this credit to bring your total savings up to $4,432 and your cost down to $8,768!

Equipment and Property Tax Exemptions

We said from the start that Phoenix is one of the greatest cities in the country for solar energy. To help solidify this fact, you can rest assured that your solar panel system will be tax-free! Phoenix, AZ, has a sales tax of 8.6% which means that this exemption is saving you $1,135 that you would normally have to pay on your purchase. Furthermore, while solar panels can add thousands to your home’s value (we will get into this more a little later) that added value is exempt from any additional property tax, saving you money year over year.

Financing Options

While there are great opportunities to save, we understand that not everyone has thousands of dollars sitting around. Thankfully there are also great solar financing options available to those looking to make a purchase of solar panels. One option we don’t recommend is something known as a Power Purchase Agreement. Due to the way these agreements work, your cost-efficiency will fall. It also removes the ability for you to add to your home’s value. We recommend that you speak to your bank or even through a solar manufacturer (they often have relationships with installers that could be beneficial for you as well). Your loan options will be either a secured or unsecured loan. While secured loans, unlike their unsecured counterpart, will require collateral, they do offer lower interest rates and require a less strict credit score for approval.

Solar Savings

So now that you have your brand new solar panels installed, it’s time to start saving money. But how much money can you expect to put back into your pocket? And how long will it be till you’ve paid off your solar panels? We’ll explore these amazing savings right now! When we looked at cost, we determined that for a 5 kW system, you’d be expecting to pay $8,768 after applying your available incentives. This 5 kW system will produce about 6,750 kiloWatt hours (kWh). Currently, in Phoenix, the cost of electricity is at almost 12 cents per kilowatt-hour, 5% above the state average. By multiplying the energy produced by your solar system with the price of electricity, we find you’ll be saving $810 each year by creating your own energy! Instead of sending money off to a traditional utility company every month, you’ll be able to pocket these savings. Putting that money back towards your solar panels, you would be looking at fully paying off your solar installation in only 10.8 years! Furthermore, the life of the quality solar panels you can expect to be installing is estimated at 30 years. So after paying off your installation, you can expect to save $810 every year for the final 19 years, making a lifetime profit of $15,390!

Return on Investment

We like to think of solar energy as an investment, and that’s because it really is. Already you can see that your solar panels are capable of paying for themselves in just under 11 years. On top of that, we saw how you’ll save an additional $15,390 over the life of your panels. It’s important to note that this doesn’t even take into consideration the fact that the price of electricity has been rising over the past 30 years, and will continue to over the life of your solar system. So as traditional prices rise, your savings potential rises with it. Earlier we mentioned that installing solar panels also brings value to your home. Across the country, solar panels add an additional 4% of home value, on average. In Phoenix, the median home value is $340,000. Adding 4% of this price would mean raising the home value by $13,600! Thanks to the incredible incentives available to you as a resident of Phoenix, this value is also exempt from any additional property taxes. So as your home gains a competitive edge in the market, your taxes stay consistent. If we add together the value put back in your pocket after paying off your installation ($15,390) with the potential value added to your home ($13,600) the total return on your investment would come to $28,990 (that’s a 330% ROI)! Hopefully, now you can see just how incredible solar energy can be for you. The benefits are incomparable and with the incentives available there is no time like the present, to make the switch to solar.

Finding a Quality Solar Installer in Phoenix, AZ

At Solar Action Alliance, we take pride in helping homeowners like yourself learn more about solar energy. Helping you determine whether or not solar panels are the right fit for you is why we put together articles like this. We believe that solar energy is the future. These benefits are astounding and they could be yours. That’s why we don’t settle at just providing information. Instead, we want to help Phoenix homeowners get in contact with quality solar energy companies that you can rely on. We’ve formed relationships with companies in your home city so we can help you find the installers that offer the best price, service, and product. When you think Phoenix, AZ, you probably think of one word: hot. With an average of almost 300 days of sun per year, it’s no surprise that Phoenix has picked up the nickname, “Valley of the Sun.” It’s not hard, then, to see why Phoenix has the optimal climate for a switch to solar energy. Combine this fact with the incredible market and incentives available right now, and you have yourself a truly phenomenal deal. We know that solar is a big decision and we don’t take that lightly. That’s why we encourage you to speak to multiple installers, ask questions and receive quotes from trusted companies in Phoenix. If you’re interested in taking the next step and want to get serious about the incredible benefits we’ve discussed in this article, just enter your zipcode below and get started on your future with solar!

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