AZ is a dessert: Not ideal for lemons which is tropical. The very air is parched and will suck the life out of anything. When I was there, I literally felt myself cooking in the sun.

do you have it as a house/conservatory plant?
You need to keep the air more moist around it, perhaps regular misting would help.
Glad Tug said AZ was a desert as that made me think AZ was Arizona. Not up on abbreviations for the various States.

Arizona--southern AZ, anyway--is a desert, but we still grow lemons commercially. Do you know what kind of lemon you got, Korusa? 'Eureka', the common, California grown store lemon doesn't hold its fruit well in our climate. 'Lisbon', 'Villa Franca', and 'Meyer Improved' work much better here.
Another common cause of early fruit drop is frequent, shallow watering. Since your tree is more than a year old, I would give it a deep (3 feet deep or more) soaking once every two weeks in summer, and once a month in winter. With flood irrigation, that's 6-8 inches of standing water at the end of the irrigation cycle. With drip irrigation, that's 8-10 gallons per emitter, one emitter per foot of canopy width.
Heavy feeding during and right after flowering can also cause heavy fruit drop.

I was in Scottsdale, AZ. Beautiful topography but I needed buckets of sunblock.

@Bathgate: I rode my bicycle (LA to Boston) across Arizona in 1994, and New Mexico was much worse.

Yep, parts of New Mexico are pretty ferocious, especially near White Sands and Los Alamos. Most of southern Arizona just skirts the definition of desert, actually being classified as semi-arid scrub.

I agree Tug. It's hard to call it a desert because it's teaming with life unique to that area. I saw a sidewinder snake which was awesome.

Wyl - Congratulations! That's a monumental achievement. I'm thirsty already just thinking about it. I need a glass of cold water!

It was the best vacation ever. I had just retired from the Navy and at the end of the ride I got on an airplane to come to the Azores. Water is so much better than those sports drinks. After a while, sports drinks become unbearably sweet and I would look for any 7-11 or mini store to get something like orange juice. Of course, not too many of those from Palm Springs to Texas and up to Kansas. Rode across the entire state of Oklahoma in a few hours (It was the panhandle).

That's amazing Wyl and I understand exactly why you did it. You had a fire in your bones. I'm not keen on those sports drinks either and the added 'electrolites' do nothing for you. It's only salt.