If Tucson Electric Power is your utility, the single thing that decides whether rooftop solar pays is not the panels, it is TEP’s own rules: the company no longer offers full retail net metering, it pays a fixed export rate set once a year, and it requires every new solar home to switch to a Time-of-Use plan. That combination changes how you should size and run a system. This page is the TEP-specific playbook: which rate rider credits your exports, what plan you must move to, how TEP interconnection works step by step, and where to confirm the current numbers before you sign. For how TEP stacks up against APS and SRP, see our Arizona net billing comparison; this page stays on TEP.
TEP solar and net metering, the quick answer (as of August 2026)
TEP no longer offers retail net metering. New rooftop solar is credited under net billing at a fixed export rate (Rider R-14, the Resource Comparison Proxy), reported near 5.13 cents per kWh versus Arizona’s roughly 15.23 cent retail rate, and every new solar customer must move to a Time-of-Use plan. Because exports pay so little, TEP solar rewards using your own power by day (DSIRE, February 2026; EIA, May 2026).
According to MySolarFY’s analysis (August 2026), under TEP net billing a kilowatt-hour you use on site is worth about 15.23 cents, while the same kilowatt-hour you export earns only about 5.13 cents, so exported TEP solar is worth roughly one-third as much as the power you consume yourself. That single gap, computed from the current EIA Arizona retail rate and TEP’s reported Rider R-14 export rate, is the reason TEP system design is different: the goal is to cover your own daytime load, not to build the biggest array that fits (EIA, as of May 2026; DSIRE, as of February 2026).
Who Tucson Electric Power serves
Tucson Electric Power is the regulated investor-owned utility for the Tucson metro and much of southern Arizona, serving roughly 450,000 customers across its service territory (TEP, as of 2026). Because it is an Arizona Corporation Commission (ACC) regulated utility, its solar rules come from ACC rate decisions, which is why TEP looks different from SRP, a public power district that sets its own plans. If your bill says Tucson Electric Power, the rules on this page are the ones that apply to your rooftop solar; if you are inside Tucson city limits and want the local cost, permitting, and HOA picture, see our Tucson solar guide, and for the statewide rules and incentives see our Arizona solar guide.
How TEP credits your exported solar: Rider R-14 net billing
TEP pays for your exported solar under Rider R-14, a fixed export rate near 5.13 cents per kWh, not the retail rate. Here is how that net-billing rate works. TEP replaced retail net metering with net billing, so the power you use the instant your panels make it offsets the full retail rate, but the surplus you send to the grid is bought back at a lower, fixed export rate. That export rate is set under Rider R-14, the Resource Comparison Proxy (RCP), and a separate Rider R-4 governs net metering for certain partial-requirements service (TEP rates, as of 2026). DSIRE reports the RCP export rate near 5.13 cents per kWh as of February 2026, well under Arizona’s roughly 15.23 cent retail rate (DSIRE, as of February 2026; EIA, as of May 2026).
Three mechanics of Rider R-14 matter before you commit:
- The rate is locked when you interconnect. Under the ACC’s Value-of-Solar framework, the export rate in effect when you connect is fixed for up to 10 years, so an earlier connection can lock a higher rate (DSIRE, as of February 2026).
- It resets once a year, and cannot fall more than 10% per year. TEP files the new RCP export rate on the ACC’s annual schedule, and the ACC caps the year-over-year step-down at 10% (DSIRE, as of February 2026).
- TEP posts the exact figure by October 1 each year. The approved export rate is published in TEP’s Statement of Charges by October 1, so treat any number here as a dated snapshot and confirm the current rate before you sign (TEP net metering, as of 2026).
For the plain-English mechanics of how any export credit works, and how TEP compares to APS and SRP side by side, see how net metering credits your solar exports and our Arizona net billing rates by utility.
The Time-of-Use plan TEP requires for solar
Yes, TEP requires you to switch to a Time-of-Use plan to go solar; you cannot stay on a flat rate. TEP confirms that customers moving to the RCP export rate “must begin taking service under a Time-of-Use pricing plan” (TEP net metering, as of 2026). On a Time-of-Use plan, grid power costs more during defined on-peak hours, usually late afternoon and early evening, and less off-peak. TEP also lists a GoSolar Home rate schedule (TRRGSH) among its residential options (TEP rates, as of 2026). Because your on-peak window is often after your panels have stopped producing, pairing solar with load-shifting, or a battery, protects your bill from the exact hours grid power is most expensive.
Some TEP residential plans carry a demand component or fixed charges that behave differently for solar homes. Plans and charges change on the ACC’s schedule, so confirm the current rate plan, any demand or grid-access charge, and your on-peak hours directly in TEP’s Statement of Charges before you size a system.
How to interconnect rooftop solar with TEP
Getting a TEP system approved to switch on follows a set sequence. A licensed installer runs most of it, but knowing the steps helps you spot delays:
- Interconnection application. Your installer submits the system design to TEP for review under its net-metering and RCP program; the application date is what locks your export rate (TEP, as of 2026).
- Permit. The City of Tucson and Pima County use NREL’s SolarAPP+, which issues a permit instantly for standard, code-compliant residential systems (NREL SolarAPP+, as of 2026), so permitting is rarely the bottleneck in TEP territory.
- Installation and inspection. The system is installed and passes a local electrical inspection.
- Meter swap and Permission to Operate. TEP moves you to the required Time-of-Use plan, installs or reconfigures a bidirectional meter, and issues Permission to Operate; only then can you legally turn the system on.
Ask any installer to show real experience with TEP interconnection and the required Time-of-Use plan, and to price your quote against TEP’s current export rate, not an old full-retail net-metering assumption. To learn how we research and match, see how MySolarFY works.
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What a TEP solar system is worth: our estimate
We estimate first-year value on an 8 kW Tucson TEP system at roughly $1,305 to $1,735, depending on how much power you use on site. Because TEP pays so little for exports, the value of a TEP system depends on your self-consumption, the share of your solar you use on site. Southern Arizona has an exceptional solar resource: an 8 kW system in Tucson is modeled to produce about 14,240 kWh a year at roughly 6.6 sun-hours a day (NREL PVWatts, ZIP 85701, as of August 2026). The table below is our own estimate of first-year value on that system, valuing self-consumed power at the 15.23 cent retail rate and exports at the roughly 5.13 cent TEP rate. These illustrate the shape of the numbers, not a quote for your roof.
| Share of solar used on site | Blended value per kWh produced | Est. first-year value (8 kW, ~14,240 kWh) |
|---|---|---|
| 40% used on site, 60% exported | about 9.2 cents | about $1,305 |
| 55% used on site, 45% exported | about 10.7 cents | about $1,515 |
| 70% used on site, 30% exported (with load-shifting or a battery) | about 12.2 cents | about $1,735 |
MySolarFY estimate (August 2026), blending Arizona’s average residential retail rate (EIA, as of May 2026) with TEP’s reported RCP export rate (DSIRE, as of February 2026), applied to a modeled 8 kW Tucson system (PVWatts, ZIP 85701, August 2026). Lifting self-consumption from 40% to 70% raises first-year value by more than $400 without adding a panel. For full cost-per-watt and payback ranges, see our Arizona solar cost guide.
Incentives a TEP customer can still claim in 2026
TEP does not set tax incentives, but three Arizona benefits still apply to a TEP customer who buys in 2026: the Arizona Residential Solar Energy Credit, worth 25% of system cost up to a $1,000 cap under A.R.S. 43-1083; a state sales-tax exemption on the equipment and installation; and a property-tax exemption on the added home value (AZ Dept. of Revenue, as of 2026). The 30% federal Residential Clean Energy Credit (Section 25D) is the one that changed: it ended for systems placed in service after December 31, 2025, so a 2026 buyer cannot claim it (IRS, as of 2026). MySolarFY does not provide tax advice; confirm your situation with a tax professional.
How you pay changes who keeps the credit
How you pay decides who keeps the Arizona state tax credit: buy with cash or a solar loan and you keep it, but on a lease or PPA the third-party owner does.
| How you pay | Up-front cost | Who keeps the Arizona state credit | Best when |
|---|---|---|---|
| Cash | full system price | you | you want the fastest payback and to own the system |
| Solar loan | little to none | you | you want to own the system but spread the cost |
| Lease or PPA | $0-up-front where eligible | the third-party owner | you prefer no up-front cost and a simpler, fixed monthly bill |
A lease or PPA can mean no out-of-pocket cost at installation, but it is not free solar: it is a long-term agreement, typically 20 to 25 years, that may include an annual escalator, and total payments may exceed a cash purchase. On a lease or PPA the third-party owner, not you, keeps the Arizona state credit and exemptions.
See which solar options fit your TEP address →
Frequently asked questions
Does TEP still offer net metering?
No. Tucson Electric Power moved new rooftop solar to net billing, so your exported power is bought back at a fixed export rate, the Rider R-14 Resource Comparison Proxy, rather than credited at the full retail rate (TEP, as of 2026). DSIRE reports that export rate near 5.13 cents per kWh as of February 2026, well below the roughly 15.23 cent retail rate, and new solar customers must take a Time-of-Use plan (DSIRE, as of February 2026). For how TEP compares to APS and SRP, see our Arizona net billing guide.
What is TEP’s current solar export rate?
TEP credits exported solar under Rider R-14, the Resource Comparison Proxy, reported near 5.13 cents per kWh as of February 2026 (DSIRE, as of February 2026). TEP sets the rate once a year and publishes the approved figure in its Statement of Charges by October 1, and it cannot fall more than 10% year over year, so confirm the current number with TEP before you sign (TEP, as of 2026).
Do I have to change my rate plan to go solar with TEP?
Yes. TEP states that customers moving to the RCP export rate must begin taking service under a Time-of-Use pricing plan (TEP, as of 2026). On Time-of-Use, grid power costs more during on-peak hours, usually late afternoon and evening, so shifting big loads to daytime or adding a battery protects your savings. Confirm your exact plan, on-peak hours, and any demand or fixed charges in TEP’s Statement of Charges before you size a system.
Is my export rate locked in once I install?
Yes, for a set period. Under the ACC’s Value-of-Solar framework the RCP export rate in effect when you interconnect is fixed for up to 10 years, so an earlier connection can lock in a higher rate, and the year-over-year step-down for new customers is capped at 10% (DSIRE, as of February 2026). Your interconnection application date is what sets your locked rate, which is one reason not to let paperwork drift.
How long does TEP interconnection take?
Permitting in TEP territory is usually fast because the City of Tucson and Pima County use NREL’s SolarAPP+, which issues standard residential permits instantly (NREL SolarAPP+, as of 2026). Your overall timeline is then driven by installation scheduling and TEP’s interconnection review, meter swap, and Permission to Operate, which you must receive before switching the system on. Ask your installer for a realistic date range for your address.
Is solar worth it for a TEP customer in 2026?
For most owner-occupied homes with good sun exposure, yes, but the reason is Tucson’s exceptional solar resource and low install cost, not high rates. Because TEP pays a low export rate, the savings concentrate in the power you use yourself: our estimate puts first-year value on an 8 kW Tucson system between roughly $1,305 and $1,735 depending on self-consumption (MySolarFY, August 2026). Savings are not guaranteed and depend on your roof, usage, rate plan, and how you pay. Get itemized quotes from licensed installers and compare cost per watt.
Reviewed by the MySolarFY team. Figures were verified against the linked TEP, EIA, NREL PVWatts, DSIRE, Arizona Department of Revenue, and IRS sources as of August 2026; TEP’s Rider R-14 export rate, its required Time-of-Use plans, Arizona incentive terms, and interconnection process can change, so confirm current terms with TEP and the Arizona Department of Revenue 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 Arizona state tax credit and exemptions 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.
