It’s hot but solar panels love it in Phoenix Arizona

The sun is no joke in Arizona. For six months out of the year, the sun just beats down on the city below.

Temps average above 100 degrees Fahrenheit in the summer months and close to that for six months out of the year. And then the other six months are sunny and actually quite pleasant.

Phoenix boasts an average of 299 sunny days per year, and this is one of the reasons solar is taking off. Every time people go outside they are reminded of the sun’s power. Solar is increasing every year and the state is one of the top ranking states for both industrial solar capacity and residential solar.

This is why we chose a home in Phoenix to be our next test city in the ongoing series of the cost of solar installations in different cities.
 

How much power do they need?

The home we chose is a modest house with solar panels already on it. Although we did not contact them in any way or ask for any information, we are going to make some assumptions. It is an average one-story three-bedroom house and a family of four lives there. They use the air conditioning a lot, and that is their major use of power in the household.

The average cost for power in Phoenix is about $120 a month. Since this is probably an average house in the area, let’s use this number for their monthly electric bill. When we go to the HahaSmart price checker tool and we enter the address and the monthly average bill, the price checker gives us a lot of useful information about getting a solar system installed. 

It recommends a 5.5 kW system for the home. Most solar installers will tell you a southern facing roof is the best for solar panels, and luckily this home has a great unobstructed southern facing rooftop so there are no issues. Solar panels can soak up the sun’s rays facing different directions, but the optimum is a southern facing roof.

The power in Phoenix is a little more expensive than in most of the country, so the payback of the solar panels is pretty fast, saying the system would pay for itself within six years. 
 

How much it costs for the solar system equipment 

As we stated earlier, the HahaSmart Price Checker Took recommends a 5.5 kW solar panel system and it breaks down the cost and the permits needed. You can’t just slap a solar system together, you first need the approval of the design and a permit to build the residential solar system. That engineering and permitting process costs $798.

If you add together the cost of all the equipment, meaning the solar panels, the power inverters, the racking, the material needed to mount the panels, and other miscellaneous items, the total comes to about $7,178. The sales tax in Phoenix is 8.6 percent which is a lot better than in some states. If you add the sales tax of about $617 it brings the total to about $7,795 in equipment and permitting.

It is important to note this cost does not include the electrical main service panel upgrade, and expenses or interest if you choose to finance your solar system.
 

The average cost for a solar system installation

At HahaSmart we asked almost 2300 solar installers and the price checker tool compiles their data and it states the average installation cost is from $5,225 to $6,765 for the solar panels. If we average the two numbers we get $5,995 as an average installation cost. 

Installation costs can vary and we recommend you compare two to three different installers quotes for your needs. At hahaSmart, we work with verified installers all over the country. When you talk to multiple installers please note, local installers are certified because they are local companies that care about their work. Many times they are also less expensive than national chains. 

Generally, a solar installation package includes an application for a solar installation permit from the local building safety department. A plan and layout of the overall installation, a guarantee from the installation company the project will be done right, and then a permit to operate the solar system.
 

The total cost and the federal tax credit applied

Now to get the grand total for the project, we add the product cost of $7,795 and the installation cost of  $5,995, and we get $13,790 before local, state, and federal tax incentive programs. That means before any other savings are explored, the cost per watt for this system is $2.51 per Watt.

Programs differ in every state, but we know everyone is able to take 30 percent of the total installation cost and deduct it in their income taxes If we factor in the tax credit, from the system, the homeowner is allowed to write off $4,137. If we subtract this from the overall cost, it drops the cost down to $9,653.
 

Arizona personal tax credit

This is a state program where homeowners can deduct 25 percent of the cost of their solar system. The official policy is the credit is allowed against the taxpayer's personal income tax in the amount of 25 percent of the cost of a solar or wind energy device, with a $1,000 maximum allowable limit, regardless of the number of energy devices installed. The credit is claimed in the year of installation. Even though it has a $1,000 limit, it is still a good program that helps homeowners in the state.
 

Solar powered net metering in Phoenix

Arizona does participate in net-metering, but the program is different than in other states. It is now state law the utilities buy back the power at an avoided cost rate, which means although the power company charges all its customers a retail rate, they buy back the extra power you generate at the wholesale cost they buy from other utilities and power generators. The only limit to the program is the customer cannot generate more than 125 percent of their usage. It is important to check with your local utility to see their individual programs.
 

How much could you save on electricity costs?

After 20 years, a homeowner who installed solar panels on their home could save approximately $35,447 in electricity costs. After you factor in both the state and federal tax credits, the payback is about four times what the panels cost. 

Of course, all these prices and savings amounts can change slightly when different brands of solar panels and inverters are used, but the general point is solar power is affordable. 

Those panels also increase the value of the home, they pay for themselves in a little more than six years, the whole solar panel system can save a homeowner more than $35,000 in power costs, and the homeowners can use the air conditioning as much as they want.

To learn more about how you can run your air conditioning endlessly and still have a zero dollar electric bill, visit HahaSmart and try out our Price Checker Tool yourself. You can not only see how much a solar panel system would cost and how much you can save. 

For information relating to going solar don’t forget to visit our solar blog section for more handy guides and articles.