Is Solar Worth It in Arizona in 2026? The Real Payback Math

Full transcript

What changed in 2026

Start with the rule change, because it drives everything else. the federal residential solar credit (Section 25D) expired for systems purchased with cash in 2026; a lease or PPA may still capture 30 percent through the Section 48E commercial credit. That single change is why a 2026 cash payback looks different from what you may have read a year ago. This is general information, not advice.

The Arizona system and what it costs

A typical Phoenix system is about 8.8 kW. As a 2026 cash purchase it runs around $25,520, because the federal residential credit no longer applies to a cash buy. If you go through a lease or a power-purchase agreement that captures the 30 percent commercial credit instead, the comparable basis is closer to $17,864 — but that is a different ownership path, not the cash price.

Arizona's state credit and net metering

Arizona adds a state tax credit worth 25% of system cost, but capped at $1,000, and your electricity rate of about $0.153/kWh sets how fast the system pays you back by offsetting the grid. The higher your bill, the faster solar works.

How to read your payback

Here is the honest 2026 picture for Phoenix. As a cash purchase, with no federal credit, the payback is about 12.0 yrs. Through a lease or PPA that captures the 30 percent commercial credit, it is closer to 8.4 yrs. Either way solar pays back in Phoenix — the path you choose moves the timeline by a few years. Run your exact bill and roof in our explorer to see your number.