Federal solar credit ended Dec 31, 2025
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Solar costs · Tucson, AZ

Solar Panel Cost in Tucson, Arizona

Fact-checked by Sorted & Saved data desk
Updated Data verified Nov 5, 2026

Tucson gets about 1,780 kWh per kW per year[1] from a rooftop solar array, according to NREL's PVWatts model at the city's coordinates. TEP's residential customers paid an average of 15.63¢ per kWh[2] and used 800 kWh a month[2]. A system sized to that use, about 5.4 kW est.[1,2], costs roughly $14,000 to $19,500 est.[1,2,3] before incentives, and pays back in about 15 years est.[1,2,3,4] for a cash buyer.

On this page [ 8 ]

Tucson solar at a glance

Output per kW of panels1,780 kWh/yr[1]PVWatts, this city
Sunlight on panels6.55 kWh/m²/day[1]Annual average
TEP avg. price15.63¢/kWh[2]2024 average, bundled customers
TEP avg. home use800 kWh/mo[2]2024 average
Typical system5.4 kWCovers 100% of use
Typical price$16,700Estimate, before incentives
Year-1 savings$970Estimate
Payback15 yearsEstimate, cash purchase
Estimated monthly output of a 5.4 kW system in Tucson (PVWatts, typical weather year)kWh / month

TEP credits exports at 4.62¢ per kWh (Rider R-14 Resource Comparison Proxy Export Rate (RCP-PRS)). Assumptions: methodology.

How Tucson Electric Power treats solar

UtilityExport policyExport creditAvg. residential priceMonthly basic charge
TEPRider R-14 Resource Comparison Proxy Export Rate (RCP-PRS)4.62¢ per kWh, locked 10 years[4]15.63¢ per kWh[2]$15.00[5]

Tucson Electric Power: Rider R-14 Resource Comparison Proxy Export Rate (RCP-PRS)

TEP meters exported energy instantaneously and gives a monthly bill credit at the RCP rate in effect when the customer submitted the interconnection application (before October 1). That rate is locked for 10 years from interconnection, then follows the current annual RCP. Excess credits carry forward; each year on the October bill TEP pays out remaining RCP credits over $10. Export rates are locked for 10 years from interconnection.

  • Basic service charge: $15.00/month single-phase on the Basic plan (TRRES); $12.00/month on the residential Time-of-Use plan (TRREST) that solar RCP customers typically use. Effective Sept 1, 2023 (Decision No. 79065).[5]
  • TOU plan required for RCP: Customers on the RCP export rider must be on a residential time-of-use rate.[6]
  • Annual payout of export credits: Remaining RCP export credits over $10 are paid out each year on the October bill (September usage).[6]
  • Pending rate case: TEP's general rate case is under ACC review; TEP says the administrative law judge's recommended rates would raise average residential bills about 11% and could take effect before the end of 2026.[7]
  • System size limit for RCP: DG system capacity must be no more than 125% of the customer's total connected load (or below service drop capacity if no load data).[6]

Permits and local programs in Tucson

  • Permitting (SolarAPP+): City of Tucson lets licensed solar contractors use SolarAPP+ for eligible residential rooftop projects, with permits issued within 24 hours of payment through TDC Online.[8]
  • SolarAPP+ processing fee: SolarAPP+ charges its own processing fee separate from the city permit fee; the city page states $35 (PV) and $25 (PV + storage).[8]
  • SolarAPP+ eligibility limits: Not eligible: ballasted systems, additions to existing PV, or sites in historic preservation zones, environmentally sensitive/hillside zones or (for owner-owned systems) county flood hazard areas; those use standard plan review.[8]

Tucson solar cost by system size

SystemPrice before incentives[3]After incentiveskWh in year 1[1]Year-1 savings[2][4]Payback (years)
4 kW$12,400$11,4007,120$72014
6 kW$18,600$17,60010,680$1,08015
8 kW$24,800$23,80014,240$1,44015
10 kW$31,000$30,00017,800$1,80015
12 kW$37,200$36,20021,360$2,04016

Incentives for Tucson homeowners

Federal · tax creditEnding soon

Business credit for leased and PPA systems (48E)

Claimed by the system owner, not the homeowner; solar must begin construction by July 4, 2026 or be in service by December 31, 2027[9]

If a company owns the panels on your roof (a lease or power purchase agreement), that company may claim the business clean electricity investment credit and can reflect it in your price. You cannot claim it yourself.

Who
Third-party-owned systems (leases and PPAs). Ask the provider whether the price assumes this credit.
Deadline
December 31, 2027
Checked
November 5, 2026
State · tax creditAvailable

Arizona Residential Solar Energy Devices Tax Credit (A.R.S. 43-1083)

25% of the cost of the device, up to $1,000 (lifetime cap per residence); unused credit carries forward up to 5 years[10]

Subsection B: 'The maximum credit in a taxable year may not exceed one thousand dollars' and credits may not cumulate over different tax years beyond $1,000 for the same residence. Subsection C: carryforward 'for not more than five consecutive taxable years'. Subsection F: device and installation must meet A.R.S. title 44, ch. 11, art. 11 (warranty/installer standards). Nonrefundable (carryforward only). Claim form (ADOR Form 310) not verified because azdor.gov returned 403.

Who
An Arizona resident who is not a dependent of another taxpayer and installs a solar energy device in their Arizona residence. Credits for the same residence cannot exceed $1,000 in total across tax years.
Maximum
$1,000
Deadline
No sunset date in the statute text
Checked
November 5, 2026
State · tax exemptionAvailable

Arizona TPT (sales tax) deduction and use-tax exemption for solar energy devices

Sales of solar energy devices by a registered solar energy retailer are deducted from the state transaction privilege tax base; purchases from a registered solar retailer or contractor are exempt from use tax[11]

Use tax: A.R.S. 42-5159(E) (https://www.azleg.gov/ars/42/05159.htm): tax 'does not apply to the purchase of solar energy devices from a retailer that is registered with the department as a solar energy retailer or a solar energy contractor.' The separate prime-contracting deduction for solar installation contracts (A.R.S. 42-5075(B)(13)) applied only to taxable periods ending before January 1, 2017, so how a turnkey installation contract is taxed today was not verified. City (municipal) TPT…

Who
Applies to solar energy devices sold by a retailer registered with the Arizona Department of Revenue as a solar energy retailer. Buyers should confirm their seller/installer is registered.
Deadline
No sunset in A.R.S. 42-5061(M) or 42-5159(E)
Checked
November 5, 2026
State · tax exemptionAvailable

Arizona property tax exclusion for residential solar (A.R.S. 42-11054)

Solar energy devices and grid-tied PV systems primarily for on-site use are considered to add no value to the property for property tax assessment[12]

Subsection C(2). percent=100 means 100% of the system's added value is excluded from assessed value. For personal-property solar (C(3)), A.R.S. 42-13056 values it at depreciated original cost with assessor percentages of 3% in years 1-3 rising to 100% in year 10 (https://www.azleg.gov/ars/42/13056.htm).

Who
Owner-installed solar energy devices and grid-tied PV systems designed primarily for on-site consumption. Systems characterized as personal property (e.g., third-party-owned) are valued under A.R.S. 42-13056 instead.
Deadline
No sunset in statute text
Checked
November 5, 2026

Every Arizona incentive →

FAQ

Frequently asked questions

How much do solar panels cost in Tucson?

About $16,700 est.[1,2,3] before incentives for a 5.4 kW est.[1,2] system, using Arizona's median installed price of $3.10 per watt est.[3]. Get at least three written quotes; prices for the same system often differ by thousands of dollars.

How does TEP pay for solar I send to the grid?

Under Rider R-14 Resource Comparison Proxy Export Rate (RCP-PRS), TEP credits exports at 4.62¢ per kWh[4], well below the retail price, so using your solar power at home is worth more than exporting it.

How long is the payback for solar in Tucson?

Our model estimates about 15 years est.[1,2,3,4] for a cash purchase, with year-one savings of about $970 est.[1,2,4]. Financing, a battery or a different rate plan changes this; the calculator lets you test each.

sources

[ 12 ]

Every number on this page links to one of these sources. Dates show when we last checked each one.

  1. NREL/NLR PVWatts v8 (1 kW-DC, fixed roof mount, 20° tilt, south-facing, 14% losses, TMY weather)pvwatts.nlr.gov · checked Nov 5, 2026
  2. EIA Electric Sales, Revenue, and Average Price 2024, Table 6: Utility bundled retail sales, residentialeia.gov · checked Nov 5, 2026
  3. U.S. Distributed Solar and Storage 2026 Data Update (Barbose, Darghouth, O'Shaughnessy, Forrester), Berkeley Labeta-publications.lbl.gov · checked Nov 5, 2026
  4. TEP: Rider R-14 Resource Comparison Proxy Export Rate (RCP-PRS)tep.com · checked Nov 5, 2026
  5. TEP residential tariffdocs.tep.com · checked Nov 5, 2026
  6. TEP: TOU plan required for RCPdocs.tep.com · checked Nov 5, 2026
  7. TEP: Pending rate casetep.com · checked Nov 5, 2026
  8. Tucson: Permitting (SolarAPP+)tucsonaz.gov · checked Nov 5, 2026
  9. Public Law 119-21 - Sec. 70513(a) and (g)(5) (48E); Sec. 70512(a) and (l)(4) (45Y)govinfo.gov · checked Nov 5, 2026
  10. A.R.S. 43-1083 - Credit for solar energy devicesazleg.gov · checked Nov 5, 2026
  11. A.R.S. 42-5061(M) - Retail classification deductionsazleg.gov · checked Nov 5, 2026
  12. A.R.S. 42-11054 - Standard appraisal methods and techniquesazleg.gov · checked Nov 5, 2026

City data last re-checked November 5, 2026.