How APS Calculates Your Monthly Solar Export Credit Under Net Billing in 2026

How Does APS Calculate What It Pays for Your Exported Solar Power?

APS pays for solar exports using a per-kilowatt-hour credit called the Excess Generation Credit, set each year by the Arizona Corporation Commission. For 2026, that credit sits at approximately 7.7 cents per kWh. Your bill shows the number of kilowatt-hours you sent to the grid that month, and APS multiplies that figure by the EGC rate to produce a dollar credit that offsets what you owe for the grid power you pulled in at night or on cloudy days.

That single formula, kWh exported times the EGC rate, is the core mechanic behind Arizona net billing in 2026. Everything else, the timing, the rollover rules, the annual reset, builds on top of it.

What Is the Excess Generation Credit and How Is the Rate Determined?

The Excess Generation Credit is not an arbitrary number. The Arizona Corporation Commission approves it annually based on something called the Resource Comparison Proxy, which estimates what it would cost APS to generate or purchase the equivalent electricity from other sources. That avoided-cost calculation is what sets the EGC, and it is the reason the credit lands well below the retail rate you pay when you pull power from the grid.

For 2026, residential APS customers pay roughly 14 to 15 cents per kWh for grid electricity depending on their rate plan and usage tier. The EGC of approximately 7.7 cents per kWh represents just over half that amount. When you export a kilowatt-hour, you earn about half of what it would cost you to buy that same kilowatt-hour back from APS.

The EGC rate appears on your monthly APS bill under the solar billing section. Because the ACC reviews and resets it annually, the exact figure can shift slightly from year to year. If you are sizing a system or modeling savings, always use the current rate from your bill rather than a figure from a few years ago.

How Is the Monthly Export Credit Calculated Step by Step?

Walking through a realistic July scenario makes the formula concrete. Take a Phoenix home in parts of Chandler, Scottsdale, or Glendale that is on APS service and has an 8-kilowatt solar system. With Phoenix averaging about 5.8 peak sun hours per day in July, that system produces roughly 1,460 kilowatt-hours in a full summer month.

A Phoenix home running central air through July typically consumes around 1,600 kilowatt-hours that month. The solar system does not displace all of that. During daylight hours when production exceeds load, the home sends the surplus to the grid. In the evening when the sun goes down, the home draws from the grid again. For this example, the home exports about 580 kilowatt-hours and imports about 720 kilowatt-hours over the course of the month.

What Dollar Credit Do Those 580 Exported Kilowatt-Hours Generate?

APS multiplies the export total by the EGC rate. At 7.7 cents per kWh, 580 exported kilowatt-hours produce a credit of $44.66. The home then owes APS for the 720 kilowatt-hours it pulled from the grid at the retail rate, which at roughly 14.5 cents per kWh comes to $104.40. Subtract the $44.66 credit, and the net energy charge before fixed service fees is $59.74.

Fixed monthly charges on APS residential accounts run around $15 to $20 depending on the rate plan, so the total bill lands near $75 to $80 for that July.

What Would That Same Month Have Cost Under Old Net Metering?

Under the full-retail net metering that APS replaced in late 2023, those same 580 exported kilowatt-hours would have earned a credit at the full retail rate of about 14.5 cents per kWh, totaling $84.10. The net energy charge before fixed fees would have been just $20.30, and the monthly bill would have been roughly $35 to $40.

The difference is real: the same home, same system, same export and import volumes, pays roughly $40 more per month under net billing than it would have under the old full-retail program. Over a year, that gap compounds.

What Happens If Your Monthly Credit Exceeds Your Bill?

Some months, especially in spring when production peaks and cooling loads have not yet hit their summer high, a solar home can export enough to generate a credit that exceeds that month's energy charges. APS does not cut a check. The remaining dollar credit rolls forward to the next billing month and stacks against future charges.

That rollover continues through the billing year. At the annual reset, which falls in December for most APS solar customers or on the anniversary of interconnection for others, any leftover credit balance is zeroed out. APS does not pay out the excess. This is a meaningful difference from the way some annual true-up programs work, and it has a direct bearing on how large a system makes financial sense.

For a deeper look at which APS rate plan squeezes the most value from your exports, see Which APS Rate Plan Works Best for a Phoenix Home That Exports a Lot of Solar Power?.

How Does the Credit Gap Affect the Right System Size in Phoenix?

Under full-retail net metering, oversizing a system relative to your annual consumption made reasonable financial sense because every exported kilowatt-hour was worth as much as one you used yourself. Under arizona net billing in 2026, that math breaks down. Exporting kilowatt-hours earns you roughly half what it would cost to buy them back, so energy you produce and cannot use yourself is worth much less than energy you consume directly.

This means the optimal system size under net billing is closer to what the home actually consumes on an annual basis, not larger. A system sized to produce 10 to 20 percent more than you use annually will still cover cloudy days and leave a modest buffer. A system sized to 150 percent of your usage just to bank a large annual credit is likely oversized for the current program structure.

Phoenix Valley Solar's Solar Calculator lets you input your APS usage history and model different system sizes against the current EGC rate so you can see the net savings at each size before you commit.

Does Your Rate Plan Change How the EGC Works?

The EGC rate itself is the same regardless of which APS rate plan you are on. What changes is the retail rate you pay for the grid power you import, which affects the net of credits against charges. Time-of-use rate plans, like the Saver Choice plans, charge higher rates during peak afternoon hours and lower rates overnight. A home with battery storage can avoid importing during peak hours and shift more consumption to off-peak periods, which improves the overall economics even when the EGC is set below retail.

For solar-only homes without storage, a flat rate plan often produces predictable results. For homes adding a battery, a time-of-use plan can meaningfully reduce the gap between what you earn on exports and what you pay on imports. See How to Maximize Your Solar Export Credits in Phoenix: APS Net Billing vs SRP Export Rates in 2026 for a side-by-side look at how plan choice and battery storage interact with the EGC.

How Do Phoenix Homeowners Reduce the Net Billing Credit Gap?

Three approaches actually move the needle. First, shift high-consumption appliances like dishwashers, washing machines, and EV chargers to run during peak production hours so the home consumes solar directly rather than exporting it at the lower EGC rate. Every kilowatt-hour you use yourself is worth the full retail rate in avoided charges rather than the 7.7-cent export credit.

Second, add battery storage. A battery captures excess midday production and discharges it in the evening when the home would otherwise import from the grid. The economic benefit is the difference between the import rate and the EGC rate, which under current APS pricing is around 6 to 8 cents per kilowatt-hour of storage capacity used daily.

Third, understand your financing options before you sign anything. Phoenix homeowners who go solar in 2026 on a prepaid solar lease receive the equivalent of a 30 percent discount off the system cost, because the leasing company claims the 48E commercial clean energy credit and passes that savings directly to the customer. Homeowners who purchase a system outright in 2026 no longer qualify for a federal credit on their own return, since the Section 25D residential credit expired at the end of 2025. This is not tax advice, and a tax professional can clarify how each structure applies to your situation, but the prepaid lease path preserves the 30 percent discount that an owned purchase no longer receives.

Reach out through the Contact page or learn about how Phoenix Valley Solar works as an independent broker if you want unbiased solar advice from an independent solar advisor in Phoenix who compares multiple installer bids before recommending anything.

How Do Phoenix Valley Cities Compare Under APS Net Billing?

The EGC calculation works the same way across the APS service area, so whether a home is in parts of Chandler, Goodyear, Peoria, Surprise, or Scottsdale that fall under APS service, the formula is identical. The difference between cities shows up in usage patterns, not the export credit structure. A newer single-story home in Goodyear with good insulation will likely consume less than a two-story 1990s build in parts of Scottsdale, which means the newer home exports less and the credit gap matters less in absolute dollar terms.

APS and SRP serve the Phoenix metro by neighborhood, not by city line. Some neighborhoods within the same city sit in different utility territories. Always confirm your utility by checking a recent electric bill before modeling any solar savings, since SRP's export credit structure differs substantially from APS net billing.

Frequently Asked Questions

What is the APS Excess Generation Credit rate in 2026?

The APS Excess Generation Credit for 2026 is approximately 7.7 cents per kilowatt-hour. The Arizona Corporation Commission sets this rate annually using an avoided-cost calculation. Your current rate appears on your monthly APS solar billing statement and may shift slightly year to year.

How is the APS net billing solar export credit calculated each month?

APS counts the kilowatt-hours you exported to the grid that month and multiplies by the Excess Generation Credit rate, currently about 7.7 cents per kWh. That dollar amount offsets what you owe for grid power you imported. Any leftover credit rolls forward; unused balances are zeroed at the annual reset.

What replaced net metering in Arizona in 2023?

APS replaced full-retail net metering with the Net Billing program for new solar customers in late 2023. Instead of earning a full retail-rate credit for every kilowatt-hour exported, new customers earn the lower Excess Generation Credit, which sits at roughly half the retail rate under arizona net billing 2026.

Does the APS annual true-up pay out leftover solar credits as cash?

No. At the end of the APS annual billing period, any remaining Excess Generation Credit balance is forfeited, not paid out as a check or rolled into the next year. This is why sizing a system to produce significantly more than you consume annually rarely improves financial outcomes under net billing.

Can a Phoenix homeowner still get the 30 percent solar discount in 2026?

Yes, through a prepaid solar lease. The Section 25D residential tax credit expired after 2025 for homeowners who purchase outright, but a leasing company can claim the 48E commercial credit and pass the savings as a 30 percent discount on a prepaid lease. Consult a tax professional to confirm how this applies to your situation.

How do I find the best solar company in Phoenix without calling a dozen installers?

Work with an independent solar broker in Phoenix like Phoenix Valley Solar. A broker gathers competing bids from vetted installers, models your APS export credit against different system sizes, and presents the results without the high-pressure sales approach you get from single-company reps.