Southwest Solar Comparison: Arizona vs Nevada vs New Mexico vs Utah

The American Southwest offers some of the nation's best solar resources, with abundant sunshine, high solar irradiance, and growing renewable energy commitments. But how do Arizona, Nevada, New Mexico, and Utah compare for solar investment? This comprehensive comparison analyzes incentives, costs, payback periods, and unique considerations for each state.

Solar Resource Comparison

Peak Sun Hours (Daily Average)

• Arizona: 6.0-6.5 hours (Highest in region)
• Nevada: 5.5-6.0 hours
• New Mexico: 5.5-6.0 hours
• Utah: 5.0-5.5 hours

Winner: Arizona (though all four states rank in top 10 nationally)

Annual Solar Production (8 kW System)

• Arizona: 13,500-14,500 kWh/year
• Nevada: 13,000-14,000 kWh/year
• New Mexico: 12,500-13,500 kWh/year
• Utah: 11,500-12,500 kWh/year

State Incentive Comparison

Federal Tax Credit (All States)

All Southwest homeowners receive 30% federal ITC through December 31, 2025.

State-Specific Incentives

Arizona:

• State tax credit: 25% up to $1,000
• Equipment sales tax exemption: ~$1,200 savings
• Property tax exemption
• Total state incentives: ~$2,200

Nevada:

• Property tax abatement: 100% for 20 years (significant value)
• Sales tax exemption: ~$1,500 savings
• No state solar tax credit
• Total state incentives: ~$1,500 + property tax savings

New Mexico:

• State solar tax credit: 10% up to $6,000
• Gross receipts tax exemption: ~$1,800 savings
• Property tax exemption
• Total state incentives: ~$7,800 (Best in Southwest!)

Utah:

• State tax credit: 25% up to $1,600
• Property tax exemption
• No sales tax exemption
• Total state incentives: ~$1,600

Winner: New Mexico (highest total state incentives)

Electricity Rates & Costs

Average Residential Rates (2025)

• Nevada: $0.14-$0.15/kWh (Highest)
• Arizona: $0.13-$0.14/kWh
• Utah: $0.11-$0.12/kWh
• New Mexico: $0.13-$0.14/kWh

Average Monthly Electric Bill

• Nevada: $145-$165
• Arizona: $135-$155
• New Mexico: $95-$115
• Utah: $85-$105

Higher rates = faster solar payback, making Nevada and Arizona attractive despite lower state incentives.

Solar Installation Costs

Average Cost per Watt (Before Incentives)

• Arizona: $2.70-$3.30/watt
• Nevada: $2.80-$3.40/watt
• New Mexico: $2.90-$3.50/watt
• Utah: $2.80-$3.40/watt

8 kW System Total Cost (Before Incentives)

• Arizona: $21,600-$26,400
• Nevada: $22,400-$27,200
• New Mexico: $23,200-$28,000
• Utah: $22,400-$27,200

Winner: Arizona (lowest installation costs due to high competition)

Net Payback Period Comparison

After All Incentives (8 kW System)

Arizona:

• Net cost: $14,000-$17,000
• Monthly savings: $145
• Payback: 8.0-9.8 years

Nevada:

• Net cost: $14,700-$18,000
• Monthly savings: $155
• Payback: 7.9-9.7 years

New Mexico:

• Net cost: $10,000-$13,000 (thanks to generous state credit)
• Monthly savings: $110
• Payback: 7.6-9.8 years

Utah:

• Net cost: $14,300-$17,500
• Monthly savings: $95
• Payback: 12.5-15.3 years

Winner: Nevada & New Mexico (tied for fastest payback)

Net Metering Policies

Arizona:

• Varies by utility (APS, SRP, TEP)
• Reduced export rates for new customers
• Battery storage recommended

Nevada:

• Net metering at 75% of retail rate
• Monthly credit rollover
• Annual payout at avoided cost

New Mexico:

• Excellent net metering at full retail rate
• Unlimited rollover
• Very solar-friendly policy

Utah:

• Net metering transitioning to export credits
• New customers receive reduced export rates
• Battery storage becoming more valuable

Winner: New Mexico (best net metering policy)

Climate & Environmental Considerations

Extreme Heat Performance

Arizona:

• Temperatures exceed 115°F regularly
• Heat reduces panel efficiency by 10-15%
• Requires premium, heat-rated equipment

Nevada:

• Las Vegas: 110°F+ summers
• Northern Nevada: Much cooler
• Heat concerns in southern regions

New Mexico:

• High altitude mitigates extreme heat
• Cooler than Arizona despite similar latitude
• Better panel efficiency

Utah:

• Generally cooler climate
• Minimal heat derating
• Best efficiency retention

Winner: Utah/New Mexico (cooler climates = better panel performance)

Snow Considerations

Arizona: Minimal (except Flagstaff area) Nevada: Moderate (Reno, northern areas) New Mexico: Moderate (Albuquerque, Santa Fe) Utah: Significant (Salt Lake City, Park City)

Snow can temporarily reduce production but also cleans panels. Proper tilt angle allows snow to slide off.

State Energy Policies & Future Outlook

Renewable Energy Standards

Arizona: 15% by 2025 Nevada: 50% by 2030 (Most ambitious) New Mexico: 80% by 2040 Utah: No mandatory standard

Net Metering Security

• New Mexico: Most stable, pro-solar policies
• Nevada: Moderate, evolving
• Arizona: Declining benefits, transitioning to export credits
• Utah: Declining benefits for new customers

Best State for Solar by Category

Best Overall Solar Resource: Arizona Best State Incentives: New Mexico Fastest Payback Period: Nevada/New Mexico (tied) Best Net Metering: New Mexico Highest Electricity Rates: Nevada Lowest Installation Costs: Arizona Best Long-term Policy Stability: New Mexico

Which Southwest State is Right for You?

Choose Arizona if:

• You want maximum solar production
• You're in Phoenix or Tucson metro (high competition = low prices)
• You're considering battery storage
• You value year-round consistent production

Choose Nevada if:

• You have high electricity bills (NV Energy rates)
• You live in Las Vegas or Reno
• You want fast payback despite higher costs
• You value property tax abatement

Choose New Mexico if:

• You want the best state incentives ($6,000 tax credit)
• You value stable, pro-solar policies
• You want excellent net metering
• You're willing to accept slightly lower production than AZ

Choose Utah if:

• You're comfortable with longer payback periods
• You value cooler climate (better panel efficiency)
• You have lower electricity bills
• You're committed to long-term ownership

ProsperShield's Southwest Expertise

We've installed thousands of solar systems across all four Southwest states. Our SHIELD framework delivers:

• State-specific system design: Optimized for each state's unique climate and incentives
• Incentive maximization: We navigate federal, state, and utility programs
• Complete energy solutions: Solar, HVAC, insulation, efficiency—customized for desert climates
• Battery storage integration: Essential in Arizona/Nevada, increasingly valuable in NM/UT

Ready to compare your exact savings in your Southwest state? Call 877-317-9079 or Book Your Free Assessment

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ProsperShield serves homeowners throughout Arizona, Nevada, New Mexico, and Utah with customized solar + energy solutions.