If you are looking up Arizona net metering in 2026, here is the plain version: Arizona no longer has traditional, full-retail net metering. The state’s regulator ended it for the big utilities years ago, so today your solar exports are paid through net billing, where the power you use straight from your own panels offsets the full retail rate, but the surplus you send to the grid is bought back at a lower, utility-set export rate. What that export rate is, and how much it changes the math, depends entirely on whether your utility is APS, SRP, or TEP. This page explains how Arizona net billing works, what each utility pays for your exported power in 2026, why the export credit sits below retail, and how to squeeze the most value out of a system when the buyback rate is low.
Updated for 2026 with Arizona’s current net-billing rules, the 2026 export rates at APS, SRP, and TEP, and the federal tax-credit change.
Arizona net metering in 2026, the short read
- Arizona does not have traditional net metering anymore. The Arizona Corporation Commission ended full-retail net metering for the state’s regulated utilities in its Value-of-Solar case, Decision No. 75859 (voted December 2016, issued January 2017), and replaced it with net billing for new solar systems (DSIRE Arizona, as of 2026).
- Your exports are bought back below the retail rate. Under net billing, the solar you use in real time avoids the retail rate, but the surplus you export is credited at a lower export rate your utility sets, not kilowatt-hour for kilowatt-hour (APS Renewable Energy Riders, as of July 2026).
- APS, SRP, and TEP each pay a different rate. In 2026 APS credits exports at roughly 6 cents per kWh, TEP at roughly 5 to 6 cents, and SRP through its own solar price plans at a lower export price plus a demand charge, all well under Arizona’s retail rate (see the utility table below).
- Arizona power is cheap, so self-consumption is where the savings live. Residential electricity averages about 15.48 cents per kWh, below the national average, so using your own solar on site is worth far more than exporting it (EIA, as of April 2026).
- A battery is more valuable in Arizona than in most states. Because the buyback rate is so far below retail, storing your daytime surplus to use at night, instead of selling it low and buying it back high, changes the payback more here than in a full-retail net-metering state.
- The 30 percent federal homeowner credit ended after December 31, 2025. An Arizona homeowner who buys solar in 2026 cannot claim the federal Residential Clean Energy Credit (Section 25D), so the state’s own credit and your utility’s net billing are what pay you now (IRS, as of January 1, 2026).
See which Arizona solar programs are available in your ZIP code
Export rates, net-billing plans, installer availability, and electric rates change by utility and location. Enter your ZIP and we’ll match you with licensed installers who serve your area.
Free to check. About a minute. No credit pull to check.
Submitted securely and used to match you with licensed installers in your area. Some homeowners may qualify for $0-up-front lease/PPA options where available.
Does Arizona still have net metering in 2026?
No. Arizona ended traditional full-retail net metering for its regulated utilities and replaced it with net billing, so a new solar home is credited for exported power at a below-retail export rate rather than the full retail price. The Arizona Corporation Commission (ACC) made the change in its Value-of-Solar case, voted in December 2016 and issued as Decision No. 75859 in January 2017 (DSIRE Arizona, as of 2026). APS phased out net metering first, TEP followed, and both now use an export-rate credit. Homeowners who already had net metering were grandfathered onto their old terms, typically for 20 years from their original connection.
The practical difference is what happens to the extra power your roof makes. Under old-style net metering, every exported kilowatt-hour was worth a full retail kilowatt-hour off your bill, a true one-to-one swap. Under Arizona net billing, the solar you consume the instant your panels make it still offsets the full retail rate, but any surplus you push to the grid is bought back at a lower export rate the utility sets (APS Renewable Energy Riders, as of July 2026). So the value of your system now depends heavily on how much of your own solar you use on site. For the plain-English mechanics of how any export credit works, see how net metering credits your solar exports; the rest of this page is about how Arizona specifically applies it.
How APS, SRP, and TEP credit your solar exports in 2026
The single most important thing about going solar in Arizona is that your utility, not the state, sets what your exported power is worth, and the three big utilities do it very differently. APS and TEP are regulated by the ACC and use a Resource Comparison Proxy (RCP) export rate that is locked when you interconnect and then steps down on an annual schedule. SRP is a public power district run by its own elected board, is not ACC-regulated, and sets its own residential solar price plans, which lean on a demand charge and a low export credit. The table compares the three against Arizona’s roughly 15.48 cent retail rate. Treat every figure as a dated snapshot, because each utility resets on its own schedule.
| Utility | Who it serves | How it credits exports | Approx. 2026 export credit | Key terms |
|---|---|---|---|---|
| APS (Arizona Public Service) | Much of the Phoenix metro (by address) and large parts of the state | Net billing with the RCP export rate | About 6.17 cents per kWh (current 2025-2026 tranche) | Rate locked 10 years from interconnection; ACC caps the annual step-down at 10% per year; next reset around September 1, 2026 |
| TEP (Tucson Electric Power) | Tucson and most of southern Arizona | Net billing with the RCP export rate | About 5 to 6 cents per kWh | Rate locked up to 10 years from your interconnection application; cannot fall more than 10% per year; resets on the ACC schedule |
| SRP (Salt River Project) | Parts of the Phoenix metro (by address) | Its own residential solar price plans: demand-based plans, plus export plans with a fixed export credit | About 1.87 cents per kWh on the standard export plan (up to about 3.45 cents on a high-generation export plan), plus a monthly demand charge on demand plans | SRP sets its own plans and is not subject to ACC rate regulation; confirm your plan directly with SRP |
Sources: APS Renewable Energy Riders, TEP Beyond Net Metering, and SRP rooftop solar, as of July 2026, against the EIA Arizona residential rate (April 2026). The APS and TEP export rates step down on the ACC’s annual schedule; SRP sets its own. Because a Phoenix-metro address can be served by either APS or SRP, confirm which utility, and which plan, applies at your exact address before you budget.
Note: SRP is a community-owned public power district governed by an elected board, and its rates and solar plans are set by that board, not by the Arizona Corporation Commission, so it did not follow the ACC’s net-billing case and runs its own solar price plans instead. Its demand-charge structure rewards a very different behavior from APS and TEP, which is why an SRP customer and an APS customer on the same street can see completely different solar economics. Always confirm your utility and your solar price plan with the utility itself before you sign.
What is net billing, and why is the export rate below retail?
Net billing splits your solar into two streams that are worth different amounts. The electricity your home uses the moment your panels produce it, running the air conditioner, the pool pump, the refrigerator, simply means you do not buy that kilowatt-hour from the utility, so it is worth the full retail rate you avoid, about 15.48 cents in Arizona (EIA, as of April 2026). The surplus that flows out to the grid, on the other hand, is bought by the utility at its export rate, which in 2026 sits around 3 to 6 cents depending on the utility. That gap between what you avoid and what you are paid is the whole reason Arizona solar strategy is different.
Regulators set the export rate below retail on the theory that it should reflect the utility’s avoided cost, not the full retail price. The retail rate you pay bundles in the cost of poles, wires, billing, and grid maintenance, and the ACC’s Value-of-Solar decision concluded that exported rooftop power should be compensated closer to what the utility actually saves by not generating that energy itself, which is a wholesale-like figure (DSIRE Arizona, as of 2026). Whether that is fair is exactly what the long-running net-metering fight in Arizona was about. For the homeowner, the takeaway is simpler: a kilowatt-hour used at home is worth two to three times a kilowatt-hour exported, so the goal is to use more of your own power.
How much is your exported power actually worth? Our estimate
Here is the original math for a Phoenix-area home, built from the Arizona retail rate, a representative production figure, and the APS export credit. Because Arizona pays so little for exports, the blended value of each kilowatt-hour your system makes depends on your self-consumption, the share you use on site versus sell back. The table below shows how the blended value climbs as you use more of your own solar, valuing self-consumed power at the 15.48 cent retail rate and exported power at the roughly 6 cent APS rate. These are illustrations of the shape of the numbers, not a quote for your roof.
| Share of solar used on site (self-consumption) | Value of self-consumed power | Value of exported power | Blended value per kWh produced | Est. annual value on a 6 kW system (~10,500 kWh) |
|---|---|---|---|---|
| 40% used on site, 60% exported | 15.48 cents | about 6.17 cents | about 9.9 cents | about $1,040 |
| 55% used on site, 45% exported | 15.48 cents | about 6.17 cents | about 11.3 cents | about $1,185 |
| 70% used on site, 30% exported | 15.48 cents | about 6.17 cents | about 12.7 cents | about $1,330 |
| 85% used on site, 15% exported (with a battery) | 15.48 cents | about 6.17 cents | about 14.1 cents | about $1,480 |
These figures are our own estimate, blending Arizona’s average residential retail rate (EIA, as of April 2026) with the current APS export rate (APS Renewable Energy Riders, as of July 2026), applied to a representative 6 kW system producing about 10,500 kWh a year. Notice the pattern: pushing self-consumption from 40 percent to 85 percent lifts the value of every kilowatt-hour your system makes by more than 40 percent, and the annual value from roughly $1,040 to about $1,480, without adding a single panel.
Put in payback terms, the worked example looks like this. A typical Arizona 6 kW system installs for around $2.15 per watt, or about $12,900 before incentives and roughly $11,900 after the $1,000 state credit (EnergySage Arizona, as of 2026). At a middle-of-the-road 55 percent self-consumption, the roughly $1,185 a year of value above puts simple payback near 10 years; lift self-consumption toward 85 percent with daytime load-shifting or a battery, and the same system pays back closer to 8 years. These are estimates to show the shape of the numbers, not a quote for your roof, and your own result depends on your usage, your utility, and your install price. That is the core of Arizona solar strategy, and it is why right-sizing your system to your usage, running big loads in daylight, and pairing solar with a battery all matter more here than in a state that still pays full retail for exports.
Why Arizona solar still pays even without net metering
Losing net metering did not kill the case for Arizona solar; it just shifted where the value comes from. Two things keep the payback strong. First, Arizona has some of the best sun in the country: a representative rooftop produces roughly 1,755 kWh per kilowatt of panels each year, so a 6 kW system makes about 10,500 kWh annually across the major metros, well above the national norm (NREL PVWatts modeling for Arizona, as of June 2026; a representative statewide estimate, not a quote for your roof). Second, Arizona is one of the cheapest states in the country to install solar. High output plus a low install price offsets a lot of the lost export value.
The catch is that the value now depends on your behavior, not just your roof. In a full-retail net-metering state, it barely matters when you use power, because every exported kilowatt-hour is worth a retail one. In Arizona’s net-billing world, timing is money: the more of your own solar you consume as it is produced, the higher the blended value of your system, as the table above shows. Run the pool pump and pre-cool the house in the afternoon, and you convert low-value exports into high-value avoided purchases. To weigh the full decision for your situation, see whether solar panels are worth it as a financial analysis, and check how we source and model our data.
Batteries and time-of-use: getting more from each kilowatt-hour
A home battery is worth more in Arizona than in almost any full-retail net-metering state, precisely because the export rate is so low. When you export a kilowatt-hour for about 6 cents in the afternoon and then buy it back for about 15 cents, or more on a time-of-use peak, that round trip costs you money. A battery lets you store your midday surplus and use it in the evening, so instead of selling low and buying high you simply use your own power at the full retail value you avoid (APS Renewable Energy Riders, as of July 2026). The wider the gap between the retail rate and the export rate, the faster storage pays for itself.
Time-of-use and demand rate plans, common across all three Arizona utilities, add a second reason to store power. Many Arizona solar customers are on a plan where power costs the most during a late-afternoon and evening peak, exactly when a solar array is winding down for the day. Shifting that peak usage onto stored solar can avoid the priciest hours and, on SRP’s demand-based plans, help manage the monthly demand charge that drives so much of the bill. To size the trade-off, see our guide to solar battery costs. A battery is not right for every home, but in a low-export-rate, high-sun, demand-charge state like Arizona, the case for one is stronger than the national average.
Arizona’s solar incentives that still apply in 2026
Net billing is not the only number that matters; Arizona still layers a state tax credit and two tax exemptions on top. These go to whoever owns the system, so on a lease or PPA the company that owns the panels keeps them. The credit and exemptions were not touched by the federal change, and the deep walkthrough of each lives on our Arizona solar incentives guide.
| Program | Applies in 2026? | What it does |
|---|---|---|
| Arizona Residential Solar Energy Credit | Yes | 25% of system cost, capped at $1,000 per residence, nonrefundable with a 5-year carryforward, claimed on Form 310 (ARS 43-1083; Arizona Department of Revenue) |
| Solar equipment sales-tax exemption | Yes | The sale of qualifying solar energy devices is deducted from Arizona’s transaction privilege (sales) tax base, with no cap (ARS 42-5061) |
| Energy-equipment property-tax exemption | Yes | An on-site solar system adds no value for property-tax assessment, so it does not raise your tax bill (ARS 42-11054) |
| Net billing / export credit | Yes (this replaced net metering) | Credits your exported power below retail, at a rate set by your utility (see the utility table above) |
| Full-retail net metering | No, it ended | Arizona replaced one-to-one net metering with net billing for new systems; earlier customers were grandfathered (DSIRE Arizona) |
| Federal residential credit (Section 25D) | No, it ended | The 30% homeowner credit ended for systems placed in service after December 31, 2025 (IRS) |
The Arizona Residential Solar Energy Credit is small but nearly automatic for a full system: because it caps at $1,000 and almost any rooftop install runs well over $4,000, most systems hit the maximum (ARS 43-1083; Arizona Department of Revenue, as of July 2026). People most often confuse it with the expired federal credit. The federal 25D credit ended for systems placed in service after December 31, 2025, and is an entirely separate thing. Arizona’s own state credit was not affected by that federal change, though the state legislature revisits its tax credits from time to time, so confirm the current-year Arizona credit with the Arizona Department of Revenue before you count on it.
What the end of the federal tax credit means for Arizona net billing
The federal homeowner credit is gone, but it never had anything to do with net billing, and Arizona’s own programs are intact. The 30 percent federal Residential Clean Energy Credit (Section 25D) ended for systems placed in service after December 31, 2025, under the One Big Beautiful Bill Act, so an Arizona homeowner who buys solar in 2026 cannot claim it (IRS, as of January 1, 2026). This matters in Arizona specifically, because many installer pages and even the search results for these questions still show a 30 percent federal credit running through 2032; for a homeowner buying in 2026, that figure is out of date. Net billing, the state credit, and the sales- and property-tax exemptions were not affected by the federal change. For the full national timeline, see what the federal solar tax credit change means in 2026.
One federal exception exists, and it is not the homeowner’s to claim. A separate commercial credit, Section 48E, is claimed by the business that owns a leased or power purchase agreement (PPA) system, not by the resident (IRS Clean Electricity Investment Credit, as of 2026). So on a lease or PPA you do not file for a federal credit yourself; the company that owns the panels does. The 25D homeowner credit, by contrast, ended for systems placed in service after December 31, 2025.
How you pay for solar decides who keeps the value
Your net-billing credits land on whoever holds the utility account, but ownership decides who keeps the state credit and the tax exemptions. If you own the system through a cash purchase or a solar loan, the Arizona Residential Solar Energy Credit and the exemptions are yours. A lease or PPA can mean no up-front cost for eligible homeowners, but it is a long-term agreement with monthly payments, not free solar, and the company that owns the panels keeps the tax benefits while you get a lower or more predictable power price.
| Path | Up-front cost | Who keeps the state credit and exemptions | Best when |
|---|---|---|---|
| Cash purchase | Full system cost | You, the owner | You want the fastest payback and the most lifetime value |
| Solar loan | Little to none, financed | You, the owner | You want ownership without paying cash up front |
| Lease or PPA | $0-up-front where eligible | The third-party owner | You prefer no up-front cost and a simpler, fixed monthly bill |
Because Arizona pays so little for exports, a battery or a well-sized system changes the numbers more than the financing choice does, so compare paths on your own usage and your own utility’s export rate. This page sits under our full Arizona solar guide, which covers statewide costs and incentives, and you can see how the local market looks in Phoenix, Tucson, Mesa, and Scottsdale.
How to choose an Arizona installer who sets up your net billing
Arizona has a deep, competitive installer market, and enrolling you on the right utility plan and net-billing tariff is where a good installer earns their keep. Rather than chasing a “best installer” list, screen any company against objective criteria:
- A valid Arizona ROC contractor license (the Registrar of Contractors license) and proper electrical licensing.
- NABCEP certification, the industry’s professional standard for PV installers.
- A clear workmanship and equipment warranty in writing.
- Real experience with your specific utility’s net-billing enrollment and interconnection, since APS, SRP, and TEP each handle solar differently, and a willingness to model your bill on your real usage and your utility’s actual export rate, not a retail one-to-one assumption.
- A written production estimate and a transparent quote that does not count the federal homeowner credit that ended after December 31, 2025. For how we screen and match installers, see how MySolarFY works.
MySolarFY matches you with licensed installers that serve your area so you can compare real local quotes side by side, with no obligation.
Check which Arizona solar programs are available at your address →
Frequently asked questions
Is net metering going away in Arizona? It is already gone for new systems. Arizona’s regulated utilities replaced full-retail net metering with net billing after the Arizona Corporation Commission’s Value-of-Solar decision (Decision No. 75859, issued January 2017), so a new solar home is credited for exported power at a below-retail export rate, not one-to-one (DSIRE Arizona, as of 2026). Homeowners who installed before the change were grandfathered onto their old net-metering terms, typically for 20 years. The practical move now is to size your system to your usage and use more of your own solar on site.
What is the solar buyback rate in Arizona? It depends on your utility, and all three are well below the retail rate. In 2026 APS credits residential exports at roughly 6 cents per kWh under its Resource Comparison Proxy rate, TEP at roughly 5 to 6 cents, and SRP at a lower export price through its own solar price plans, which also carry a demand charge (APS Renewable Energy Riders; TEP Beyond Net Metering, as of July 2026). Arizona’s retail rate is about 15.48 cents, so a kilowatt-hour used at home is worth far more than one exported. Confirm the current figure with your utility, as the rates reset annually.
How does SRP handle solar, and is it different from APS? Very different. SRP is a public power district governed by its own elected board, and its rates and solar plans are set by that board rather than the Arizona Corporation Commission, so it did not follow the ACC’s net-billing case and instead runs its own residential solar price plans built around a monthly demand charge, with export plans that credit exported solar at a fixed rate of about 1.87 cents per kWh, or up to about 3.45 cents on a high-generation export plan (SRP rooftop solar, as of July 2026). Because a Phoenix-metro address can be served by either SRP or APS, and the two credit solar completely differently, confirm which utility serves your exact address before you compare quotes.
Why is my electric bill still high after going solar in Arizona? Usually because of how net billing works. Your exported power is only bought back at a few cents per kWh, so if a large share of your production is exported rather than used on site, you earn little for it while still buying evening and nighttime power at the full retail rate (APS Renewable Energy Riders, as of July 2026). Time-of-use peaks, demand charges on SRP plans, and fixed monthly service charges also remain. The fix is to shift big loads into daylight hours or add a battery so you use more of your own solar.
Is the 30 percent solar tax credit going away in 2026? It is already gone. The 30 percent federal Residential Clean Energy Credit (Section 25D) ended for systems placed in service after December 31, 2025, under the One Big Beautiful Bill Act, so a homeowner who goes solar in Arizona in 2026 cannot claim it (IRS, as of January 1, 2026). Several Arizona pages still show the credit running through 2032; that is out of date. The credit was not reduced for 2026, it ended, so plan your project around Arizona’s own state credit and your utility’s net billing, which the change did not touch.
Should I get a battery with solar in Arizona? For many Arizona homes, a battery makes more sense than it would in a full-retail net-metering state. Because your exports are bought back at only a few cents while retail power costs about 15.48 cents, storing your daytime surplus to use during the expensive evening peak avoids that lopsided round trip (EIA, as of April 2026). On SRP’s demand-based plans a battery can also help manage the monthly demand charge. It is not right for every budget, so weigh it against your usage and current solar battery costs.
Reviewed by the SolarFY Editor (reviewed July 2026). Figures were verified against the linked Arizona Corporation Commission (Value-of-Solar Decision No. 75859), APS, Tucson Electric Power, Salt River Project, DSIRE, Arizona Revised Statutes (azleg.gov), Arizona Department of Revenue, EIA, and IRS sources as of July 2026; the APS, SRP, and TEP export rates are set by each utility, reset on their own schedules, and can change, so confirm the current figure with your utility before you decide. MySolarFY does not provide tax or financial advice; consult a licensed professional about your own situation. Learn more about how MySolarFY works.
MySolarFY is a free service that matches homeowners with licensed solar installers. We are not an installer, financing company, tax advisor, or government program. “No up-front cost” refers to qualifying lease or PPA financing, where eligible homeowners may have no out-of-pocket cost at installation. Lease and PPA terms typically run 20 to 25 years, may include an annual price escalator, and total payments may exceed the cost of a cash purchase; on a lease or PPA the Arizona state credit and tax exemptions go to the company that owns the system, not the homeowner. Homeowners do not get the federal residential credit (Section 25D) that ended after December 31, 2025. Solar panels are not free and monthly payments apply. Export rates, savings, and electricity rates vary by utility and year and are not guaranteed. See our full disclaimer.
