Phoenix gets more usable sun than almost any city in the country, so the question here is rarely whether solar works. It is whether the deal pencils out for your specific home, and in Phoenix that turns on one fact most guides skip: your address decides whether Arizona Public Service (APS) or Salt River Project (SRP) is your utility, and the two credit your exported solar power very differently. This page covers how to find which utility serves you, what each one pays for the power your roof sends back, what solar actually costs in Phoenix in 2026, the Arizona incentives you can still claim, and the desert-specific wrinkles (extreme-heat output loss, city permitting, and HOA rules) worth planning around. Then you can check your address in about a minute.
The 60-second answer for Phoenix (2026)
- Your utility is APS or SRP, set by your address, never both. Phoenix is split between two non-overlapping electric territories. The fastest way to tell is the provider name on your electric bill (APS service-territory map, as of June 2026). This one fact changes your whole solar payback, because the two utilities pay differently for exported power.
- Neither utility is 1:1 net metering anymore. APS pays a net-billing export credit (the Resource Comparison Proxy), currently about 6.17 cents per kWh, that the Arizona Corporation Commission resets every September 1; SRP’s solar export plans pay a fixed credit of about 3.45 cents per kWh. Both are well below the retail rate, so it pays to use your own solar as you make it.
- Arizona electricity averages about 15.48 cents per kWh (EIA, as of April 2026). That is near the national average, so the Phoenix case rests less on a high rate than on huge production and short payback.
- A typical Phoenix roof is a production machine. A 6 kW system in ZIP 85032 is modeled to make about 10,552 kWh a year (NREL PVWatts, as of June 2026), one of the highest yields in the United States, even after summer heat trims midday output.
- Arizona still has a state solar tax credit. The Arizona Residential Solar Energy Credit is worth 25% of system cost, capped at $1,000, claimed on your state return (Arizona Department of Revenue, as of 2026).
- The 30% federal homeowner credit (Section 25D) ended after December 31, 2025 (IRS, as of January 1, 2026), so a Phoenix homeowner who buys solar in 2026 cannot claim it.
First, find out who your utility is: APS or SRP
In Phoenix this is the single most important thing to settle before you price solar, because APS and SRP credit exported power on completely different terms. Arizona assigns each utility an exclusive service territory, so a given Phoenix address sits in one or the other, never both (APS service-territory map, as of June 2026). The quickest check is to read the provider name printed on your monthly electric bill. If you are buying or about to move, use the APS service-area map to confirm whether an address is inside APS territory; if it is not, SRP serves it.
Why it matters so much: the two are governed differently. APS is a regulated investor-owned utility, so its rates and its solar export credit are set by the Arizona Corporation Commission (ACC) in public rate cases. SRP is a public power utility run by its own elected board and is not regulated by the ACC, so SRP sets its own price plans (SRP price plans, as of June 2026). That is why you cannot assume a friend’s solar deal across town matches yours. Same city, same sun, different rulebook. For the statewide policy picture behind both, see our Arizona solar guide. Comparing nearby metros? See our guides to Tucson solar on Tucson Electric Power, Mesa solar next door, and Scottsdale solar. For how we run the production and rate figures behind these guides, see our data and methodology.
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How APS and SRP pay for the solar you send back
Phoenix no longer has true 1:1 net metering on either utility, and the gap between them is the heart of your solar math. Both APS and SRP moved to export-credit models that pay you less for power you send to the grid than the retail price you pay to buy it back. The practical takeaway is the same for both: a kilowatt-hour you use in your own home the moment your panels make it is worth full retail, while a kilowatt-hour you export is worth the lower credit. That is why batteries and daytime usage matter more in Phoenix than in a 1:1 net-metering state.
APS uses a net-billing export credit called the Resource Comparison Proxy (RCP). Under net billing, your home draws from the grid and pushes excess to it independently, and your exports earn the RCP credit rather than canceling out a retail kilowatt-hour one for one. The current RCP credit is 6.171 cents per kWh, in effect from September 1, 2025 through August 31, 2026 (DSIRE Arizona net metering, as of February 2026). The ACC resets that rate every September 1 and caps any year-over-year drop at 10%, so the next reset is September 1, 2026 and the exact figure your installer quotes should be the current one, not last year’s (Arizona Corporation Commission RCP docket, as of 2026). The RCP applies to new solar customers; homeowners who went solar under the old rules are grandfathered on their prior terms. Once you lock in a rate as a new solar customer, you keep it for a set term, which is why timing and the current value are worth asking about.
SRP works differently: a fixed export credit on a solar price plan. SRP offers several residential solar price plans, and its Export Price Plans (the Time-of-Use Export and EV Export plans) pay a fixed credit of about 3.45 cents per kWh for exported energy, rather than an annually reset proxy (SRP solar price plans, as of June 2026). Other SRP solar plans instead bill on your net monthly usage, and full retail-rate net metering is closed to new customers, so the plan you choose matters. SRP is a not-for-profit public power utility run by its own elected board, so its retail prices are set through SRP’s own pricing process rather than by the ACC. The shared lesson across both utilities: size the system to your own usage and lean on self-consumption, since exported power is credited well below the roughly 15 cent retail rate. For the mechanics of how export credits work in general, see how net metering and net billing credit your solar. For the Arizona utility-by-utility detail, see how Arizona net billing credits your exports at APS, SRP, and TEP.
| APS (rates set by the ACC) | SRP (self-governed board) | |
|---|---|---|
| Export model | Net billing, Resource Comparison Proxy (RCP) credit | Solar price plans; the Export Price Plans pay a fixed credit |
| Reported export credit | 6.171 cents per kWh, resets every Sept 1 (next reset Sept 1, 2026) | About 3.45 cents per kWh on the export plans |
| Who sets retail prices | Arizona Corporation Commission | The elected SRP board |
| What to confirm before signing | The current RCP value and your rate-lock term | Which solar plan you are on, the export credit, and any demand charge |
What solar actually costs in Phoenix, and when it pays back
At about $2.15 per watt installed, a typical Phoenix system is priced near the low end nationally, and the state’s huge sun resource is what makes the payback work (EnergySage Arizona, as of 2026). Arizona’s roughly 15.48 cent retail rate is close to the national average, so unlike a high-rate market such as the Northeast, the Phoenix case is built on production volume and a low install price rather than an expensive grid. The table below is our own estimate for a standard 6 kW system, using the EIA Arizona rate and the NREL PVWatts production figure for a Phoenix ZIP, so you can see where the numbers come from rather than trusting a round-number promise.
| Our Phoenix estimate (6 kW system) | Figure | Source / assumption |
|---|---|---|
| Installed cost before incentives | About $12,900 | 6 kW at $2.15 per watt (EnergySage AZ, 2026) |
| Arizona state tax credit | Minus $1,000 | 25% of cost, capped at $1,000 (ARS 43-1083) |
| Federal homeowner credit | $0 | Section 25D ended after Dec 31, 2025 (IRS) |
| Net cost after the state credit | About $11,900 | Cost minus the AZ credit |
| Modeled first-year production | About 10,552 kWh | NREL PVWatts, 6 kW, Phoenix ZIP 85032 |
| Value if used at the retail rate | About $1,630 a year | 10,552 kWh at 15.48 cents (EIA AZ) |
| Simple payback, best case | Roughly 7 to 8 years | Net cost divided by the retail-value figure |
Read that payback as a best case, not a promise. It assumes every kilowatt-hour offsets a retail one, which only happens if you use your solar as you make it. In practice some of your production is exported at the lower APS or SRP credit, which lengthens the payback, while pairing a battery or shifting usage into daylight hours shortens it. Your roof’s orientation, shading, and the heat derate below also move the production number.
A more realistic case: split your power between home use and export. Most homes use only part of their solar as they make it and export the rest, and that is where your utility changes the math. The table below models a 50/50 split on the same 6 kW system, valuing self-used power at the 15.48 cent retail rate and exported power at each utility’s export credit (APS 6.171 cents, SRP 3.45 cents). The assumptions are ours, shown so you can adjust them to your own usage.
| Scenario (6 kW, 10,552 kWh per year) | Annual value | Simple payback on $11,900 |
|---|---|---|
| Best case: all power self-used at the retail rate | About $1,630 | About 7 to 8 years |
| APS home, about half exported at 6.171 cents | About $1,140 | About 10 to 11 years |
| SRP home, about half exported at 3.45 cents | About $1,000 | About 12 years |
On exported power an SRP home earns roughly half what an APS home earns per kWh (3.45 cents versus 6.171 cents), so an export-heavy SRP system pays back on the order of a year or more slower than the same system on APS. That gap is exactly why confirming your utility, and sizing the system to your own daytime usage, matters so much in Phoenix. To weigh the long-run numbers for your own home, plug your roof into the free NREL PVWatts calculator and compare quotes that use the current export credit for your utility.
The desert-heat factor: why a 115-degree day cuts output
Here is a Phoenix-specific catch that cooler-climate guides never mention: extreme heat temporarily lowers how much a panel produces. Solar panels are rated at a cell temperature of 25 degrees C (77 F), and they lose roughly 0.3% to 0.4% of their output for every degree C above that (Argent Solar, Phoenix, as of 2025). On a 110 to 115 F Phoenix afternoon a roof-mounted panel’s surface can hit 145 to 155 F, which can pull instantaneous output 15% to 20% below its nameplate rating for those peak hours (desert-climate solar guide, as of 2026).
Note: The heat derate is real but it does not undo the Phoenix advantage. The same intense sun and long days that heat the panels also deliver far more annual energy than a milder climate, which is why PVWatts still models around 10,500 kWh a year from a 6 kW array here. Two practical moves help: choose modules with a lower (closer to negative 0.29% per degree C) temperature coefficient, which hold up better in desert heat, and leave proper roof-to-panel ventilation so the array runs cooler. Ask your installer to model production with the temperature derate included, not just the nameplate rating.
Arizona incentives you can still use on a Phoenix system
Beyond the export credit from your utility, a Phoenix homeowner who owns their system can stack the same statewide Arizona benefits. These go to the system owner, so on a lease or PPA the company that owns the panels keeps them, while your benefit is a lower or fixed power price.
- The Arizona Residential Solar Energy Credit, worth 25% of the system cost up to a $1,000 cap, claimed on Arizona Form 310 with your state income-tax return under ARS 43-1083, and still active in 2026 (Arizona Department of Revenue, as of 2026).
- A property-tax exemption for the added home value from a solar system, so going solar does not raise your assessed value or property-tax bill (DSIRE Arizona, as of 2026).
- A sales-tax (TPT) exemption on solar-energy devices, currently available with no cap and no sunset, so you do not pay Arizona transaction privilege tax on the qualifying solar equipment (ARS 42-5061(M), as of 2026).
These are the same anywhere in the state, so we keep the full statewide detail, including any utility rebates, on our Arizona solar incentives guide rather than repeating it here.
What the federal tax-credit change means for Phoenix
The federal homeowner credit is gone, but Arizona’s programs are not. The 30% 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 Phoenix homeowner who buys solar with cash or a loan in 2026 cannot claim it (IRS Residential Clean Energy Credit; SEIA, as of 2026). You will still see installer pages asking whether the 30% credit is going away; the accurate answer for 2026 is that the homeowner version already ended. The Arizona state credit, the sales- and property-tax exemptions, and your utility’s export credit were not affected, and with Phoenix’s production the case still holds. For the full timeline, see our Arizona solar guide.
One federal exception exists, and it is not yours to claim. A separate commercial credit, Section 48E, is claimed by the business that owns a leased or PPA system, not by the homeowner (IRS Clean Electricity Investment Credit, as of 2026). On a leased system you do not file for a federal credit yourself; the company that owns the panels does. The 25D homeowner credit, by contrast, ended after December 31, 2025.
Permitting and HOA rules for solar in Phoenix
Phoenix has made the permit step unusually fast. The City of Phoenix participates in the automated SolarAPP+ platform, which lets a licensed contractor pull a residential rooftop solar permit in a single day instead of waiting days or weeks (City of Phoenix SolarAPP+, as of June 2026). Eligibility is limited to standard single-family or duplex rooftop systems installed by a licensed Arizona contractor, and adding battery storage can fall outside the instant path. Your installer normally handles the permit and the utility interconnection paperwork with APS or SRP, but it is fair to ask them to confirm they use the city’s instant process where your project qualifies.
Note on HOAs: If you live in a planned community or HOA, Arizona’s solar-rights law is on your side. ARS 33-1816 and ARS 33-439 prevent an association from outright prohibiting a rooftop solar installation, and void CC&R terms that would effectively ban it (Arizona State Legislature, ARS 33-1816, as of 2026). An HOA can still impose reasonable rules on placement or appearance, as long as those rules do not significantly raise your cost or cut your system’s output. If your HOA pushes back, that statute is the one to cite.
How to choose a solar installer in Phoenix
Phoenix has one of the deepest solar markets in the country, which is good for you because it means real competition on price and service. Rather than chasing a “best installer” list, screen any company against objective criteria:
- NABCEP certification, the industry’s professional standard for PV installers.
- A valid Arizona ROC contractor license (the Registrar of Contractors license that solar work requires) and proper electrical licensing.
- A clear workmanship and equipment warranty in writing, which matters more in desert heat that stresses hardware over time.
- Real, current experience with your specific utility’s interconnection, APS or SRP, plus the City of Phoenix instant-permit process, so your Permission to Operate goes smoothly.
- A written production estimate that includes the heat derate and a transparent quote built on the current APS or SRP export credit, not an old net-metering assumption. For a checklist, see the right questions to ask a solar installer.
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Frequently asked questions
Is solar worth it in Phoenix in 2026?
For most owner-occupied Phoenix homes with decent sun exposure, yes. Arizona’s intense sun means a 6 kW system is modeled near 10,552 kWh a year (NREL PVWatts, as of June 2026), among the highest production in the country, and installed costs are low at about $2.15 per watt (EnergySage Arizona, as of 2026). The catch is that neither APS nor SRP offers 1:1 net metering, so savings depend on using your own power and on your utility’s export credit. Savings are not guaranteed and depend on your roof, usage, and how you pay, but strong production plus a low install price make Phoenix a solid solar market.
Who is my electric utility for solar in Phoenix, APS or SRP?
It depends on your address, since Phoenix is split between the two and their territories do not overlap. The fastest way to tell is the provider name on your monthly electric bill; to check before you buy or move, use the APS service-area map, and if the address is outside APS territory then SRP serves it (APS service-territory map, as of June 2026). This matters because APS and SRP credit exported solar on different terms, so confirm your utility before you compare quotes.
How does APS pay for the solar power I export?
APS uses net billing with a Resource Comparison Proxy (RCP) export credit rather than 1:1 net metering, so exported power earns a set credit below the retail rate. The current RCP credit is 6.171 cents per kWh, in effect through August 31, 2026 (DSIRE Arizona, as of February 2026). The Arizona Corporation Commission resets that credit every September 1 and caps any annual drop at 10%, so the next reset is September 1, 2026. New solar customers lock in the current rate for a set term while earlier adopters are grandfathered, so ask your installer to quote the current RCP value and consider how much of your production you will use at home versus export.
How does SRP pay for exported solar, and is it different from APS?
Yes, it is different. SRP is a not-for-profit public power utility governed by its own elected board, so its retail prices are set by SRP rather than the Arizona Corporation Commission. New residential solar customers choose among several solar price plans; the Export Price Plans pay a fixed export credit of about 3.45 cents per kWh, while other plans bill on net monthly usage (SRP solar price plans, as of June 2026). Because SRP sets its own plans and demand charges, a solar quote written for an APS home does not transfer to an SRP home, so confirm your exact plan and credit with SRP before you sign.
Does extreme Phoenix heat hurt my solar panels?
Heat lowers a panel’s output while it is hot, but it does not ruin the overall case. Panels lose roughly 0.3% to 0.4% of output per degree C above 77 F, so a 110 to 115 F afternoon can cut instantaneous output 15% to 20% below the nameplate rating (Argent Solar, Phoenix, as of 2025). Even so, Phoenix’s long, sunny days still deliver some of the highest annual production in the country. Choosing modules with a lower temperature coefficient and leaving good roof ventilation both help, so ask your installer to model production with the heat derate included.
Can my HOA stop me from installing solar in Phoenix?
No, not outright. Arizona’s solar-rights law, ARS 33-1816 and ARS 33-439, prevents a homeowners association from prohibiting a rooftop solar installation and voids CC&R terms that would effectively ban it (Arizona State Legislature, as of 2026). An HOA can set reasonable rules on placement or appearance, but not ones that significantly raise your cost or reduce your system’s output. If your association resists, point them to that statute, and choose an installer experienced with HOA submittals.
What happened to the federal solar tax credit?
The 30% 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 Phoenix homeowner who buys solar in 2026 with cash or a loan cannot claim it (IRS, as of 2026). A separate commercial credit, Section 48E, can apply to leased and PPA systems, but the business that owns the system claims it, not the homeowner. Arizona’s state solar credit, the sales- and property-tax exemptions, and your utility’s export credit were not affected, so the local payback case still holds.
Updated for 2026. Reviewed by the MySolarFY team. Figures were verified against the linked APS, SRP, Arizona Corporation Commission, Arizona Department of Revenue, EIA, NREL, and IRS sources as of June 2026; the APS RCP export credit, the SRP Export Price Plan credit, and Arizona program terms can change, so confirm current terms with your utility (APS or SRP), the City of Phoenix, and azdor.gov 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, 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 state tax credit and other incentives go to the company that owns the system, not the homeowner. Homeowners do not get the federal residential credit that ended after December 31, 2025. Solar panels are not free and monthly payments apply. Eligibility, savings, incentives, and rates vary and are not guaranteed. See our full disclaimer.
