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Solar in Arizona
At 15.38¢ per kWh and 1755 kWh of production per kW each year, a household paying $200 a month needs a 8.36 kW system. Paid in cash, it returns its $17,471 cost in 13.4 yr.
Two prices, two answers
Payback 13.4 yr — at competitive quoted prices ($2.21/W, EnergySage 2026): net cost $17,471, 25-year net $21,851.
Payback 21.6 yr — at typical reported prices ($4.00/W, LBNL 2023): net cost $32,432, 25-year net $6,890.
The gap is methodology, not staleness: the first what you get if you shop around for competitive quotes; the second what the average buyer actually paid, as recorded in permit and incentive data. Every table below uses quoted prices. Why we show both.
By monthly bill
| Your bill | Use / yr | System | Panels | Net cost | Payback | 25-yr net (cash) | Lease, year 1 |
|---|---|---|---|---|---|---|---|
| $100/mo | 6,866 kWh | 3.91 kW | 10 | $7,646 | 15.5 yr | $7,811 | −$82 |
| $150/mo | 10,767 kWh | 6.14 kW | 16 | $12,559 | 14 yr | $14,831 | −$129 |
| $200/mo | 14,668 kWh | 8.36 kW | 21 | $17,471 | 13.4 yr | $21,851 | −$176 |
| $300/mo | 22,471 kWh | 12.8 kW | 33 | $27,296 | 12.8 yr | $35,895 | −$269 |
Cash, loan or lease — at $200 a month
| How you pay | 25-year net | Upfront | Year 1 | Payback / cash flow | Federal credit to you |
|---|---|---|---|---|---|
| Cash | $21,851 | $17,471 | $1,253 | 13.4 yr | $0 |
| Loan $135/mo · 6.99% APR · 20 yr | $6,838 | $0 | −$371 | positive from year 22 | $0 |
| Lease / PPA | −$8,277 | $0 | −$176 | never | $0 |
The 30% federal credit goes to the system owner, not to you. It is reflected in the rate you are offered. The owner claims it at 30% under IRC 48E.
The inputs, and where they came from
| Input | Value | Source |
|---|---|---|
| Residential electricity rate | 15.38¢/kWh | U.S. EIA API v2, electricity/retail-sales, residential sector, 2026-07 |
| Specific yield | 1755 kWh/kW/yr | NLR (formerly NREL) PVWatts v8 API, 1 kW reference system (city:phoenix-az) |
| Installed cost | $2.21/W | EnergySage Marketplace real-quote average, as of Sep 2026; page updated 2026-08-28 · LBNL Tracking the Sun 2023 median: $4/W, reference only |
| Export compensation | net billing, export credited below retail · 37% | Rate Rider RCP, A.C.C. No. 6248, effective 1 September 2026 under Arizona Corporation Commission Decision No. 82122. Exports are metered instantaneously and credited at the Resource Comparison Proxy export price: $0.05554/kWh for the 2026 tranche (1 September 2026 to 31 August 2027). A customer's rate is fixed for 10 years from interconnection, and the RCP may not fall by more than 10% a year. Export credits above the monthly bill carry forward; a balance over $25 after the December bill is paid out by cheque. $0.05554/kWh from the tariff sheet against an Arizona residential retail rate of 15.18 c/kWh (EIA 2026-06) gives 0.366, recorded as 0.37. Follows: Arizona Public Service (the state's largest electric utility). Tucson Electric Power and UNS Electric set their own Resource Comparison Proxy rates. Source, read 2026-09-05. |
| Federal credit, purchase | 0% | IRC 25D (expired) |
| Federal credit, third-party owner | 30% | IRC 48E (Clean Electricity Investment Credit) |
| State incentives | $1,000 | Residential Solar Energy Device Credit (Form 310, A.R.S. 43-1083) (25%, up to $1,000) |
City-level production on file for: Phoenix. The figures above use Phoenix.