Is Electrification Worth It in Arizona?

120°F summer days. 3°C winter nights. How does a heat pump handle that?

Arizona is actually perfect for heat pumps, but not for the reason most people think. Yes, the cooling load is insane—Phoenix uses more electricity for AC than almost anywhere else in America. But you barely heat at all. Maybe 20-30 days per year. And natural gas costs are rising fast as the state grows.

Get a high-SEER heat pump and solar. That's the play. Your AC runs 6+ months a year, so efficiency matters more here than almost anywhere. A SEER2 18+ heat pump will cut your summer bills by 30-40%. Solar pays for itself in 5-6 years with Arizona's sun hours. This isn't even a close call.

Updated December 2024Data from EIA, DSIRE, NREL
Heat Pump Payback
Not Recommended
With incentives
Annual Savings
$2,403
Full electrification
Available Incentives
$10,475
Federal + state + utility
CO₂ Reduction
12.1 tons
Per year

Arizona Energy Costs

Electricity Rate
$0.135/kWh
Natural Gas Rate
$1.28/therm
Average Electric Bill
$162/month
Average Gas Bill
$48/month
Climate Zone
hot
Heating Degree Days
1,400
Cooling Degree Days
3,500

Visual ROI Analysis

Payback Period Comparison

Lower is better • Shortest payback = fastest return on investment

Annual Savings Comparison

Higher is better • More annual savings = greater long-term benefit

Cumulative Net Savings Over Time

Point where line crosses $0 = payback achieved • Steeper line = faster savings growth

Return on Investment by Upgrade

🌡️

Heat Pump HVAC

Upfront Cost$12,000 - $22,000
Total Incentives-$2,400
Net Cost$9,600 - $19,600
Annual Savings$-12/yr
Payback PeriodNot Recommended
Lifetime ROI5%
CO₂ Reduction1.8 tons/yr
☀️

Solar Panels

Upfront Cost$15,000 - $30,000
Total Incentives-$4,500
Net Cost$10,500 - $21,000
Annual Savings$1,094/yr
Payback Period15.1 years
Lifetime ROI142%
CO₂ Reduction3.8 tons/yr
💧

Heat Pump Water Heater

Upfront Cost$2,500 - $4,500
Total Incentives-$2,250
Net Cost$250 - $2,250
Annual Savings$182/yr
Payback Period9.1 years
Lifetime ROI61%
CO₂ Reduction1.8 tons/yr

EV Charger + Electric Vehicle

Upfront Cost$800 - $2,500
Total Incentives-$1,325
Net Cost$-525 - $1,175
Annual Savings$1,140/yr
Payback Period0.4 years
Lifetime ROI1475%
CO₂ Reduction4.8 tons/yr

Full Electrification Package

Total Upfront Cost
$30,300 - $59,000
Total Incentives
-$10,475
Net Cost After Incentives
$19,825 - $48,525
Annual Energy Savings
$2,403/year
Lifetime Savings (18 years)
$43,262
Simple Payback
16.0 years
💡

Best ROI for Arizona

Based on your state's energy costs and climate, EV Charger offers the best return on investment with an average payback of 0.4 years and an ROI of 1475%.

0.0 years slower than average compared to the national average.

Ready to electrify your Arizona home?

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