APS Rate Increases: How Solar Protects Phoenix Homeowners

Every year, APS electric customers across the Phoenix Valley open their summer bills and feel the same familiar shock. The rates climbed again. For homeowners in Mesa, Chandler, Gilbert, Scottsdale, Tempe, and throughout Maricopa County, the pattern has become predictable: APS files a rate case with the Arizona Corporation Commission, rates increase, and monthly bills rise higher.

The good news is that rooftop solar gives Phoenix Valley homeowners a direct way to fight back. With Arizona's exceptional sun resources and a prepaid solar lease that delivers an immediate 30% discount, going solar has never made more financial sense for APS customers who want to reduce their electric bill and protect themselves from future increases.

Why APS Rates Keep Climbing

APS (Arizona Public Service) has filed multiple rate increase requests with the Arizona Corporation Commission over the past several years, citing infrastructure upgrades, grid modernization, and rising operational costs. Each approved increase adds to the cumulative load that residential customers carry every month.

According to the U.S. Energy Information Administration, Arizona residential electricity prices rose more than 20% between 2019 and 2024, a trend that shows no signs of reversing. In 2024, average APS residential rates hovered around 13 to 15 cents per kilowatt hour, but when time of use pricing, demand charges, and tiered summer rates are factored in, many Phoenix Valley homeowners pay effective rates significantly higher during peak cooling months.

This is not just a short term problem. Long term utility planning documents suggest continued infrastructure investment will keep upward pressure on rates well into the next decade. For homeowners who take no action, every year means paying more for the same energy.

What APS Rate Increases Mean for Phoenix Valley Homeowners

For the average Phoenix Valley household, an APS bill during summer months can exceed $250 to $400 depending on home size, insulation quality, and how aggressively the air conditioner runs. When rates increase by even 4 or 5 percent annually, the compounding effect over a decade is substantial.

A homeowner paying $300 per month today, facing a conservative 4% annual rate increase, will pay roughly $444 per month a decade from now. Over that same 10 year window, the cumulative extra cost compared to today's rates approaches $17,000 in additional charges. That math is precisely why more and more Phoenix homeowners are looking seriously at solar panels as a hedge against APS rate increases and a permanent way to save on their electric bill.

The problem intensifies during June, July, and August, when Phoenix sees temperatures regularly topping 110 degrees. Air conditioning becomes unavoidable, and every extra degree costs money. Homeowners who invest in solar essentially lock in the value of the energy their panels produce, insulating themselves from future rate hikes year after year.

How Solar Panels Lower Your Electric Bill in Arizona

Residential solar panels work by converting Arizona's abundant sunlight into electricity your home uses directly, reducing the kilowatt hours you have to buy from APS. With over 299 sun days per year in the Phoenix Valley, solar systems here generate more energy per panel than almost anywhere else in the country. This is why Arizona consistently ranks as one of the best solar states in the nation for homeowners looking to reduce their electric bill.

A properly sized system for a Phoenix Valley home can offset 80 to 100 percent of annual APS usage, depending on system size, roof orientation, and household consumption. Instead of paying APS escalating rates for every kilowatt hour, you produce much of your electricity yourself, from sunlight, at no additional marginal cost once the system is installed. APS rate increases become far less impactful because a much smaller portion of your consumption is drawn from the grid.

You can see how much solar could save your specific household by visiting the Solar Calculator on our website and entering your current monthly APS bill. The estimate is free and takes about 60 seconds.

The Prepaid Solar Lease: Save 30% With No Loan Required

The financing model matters enormously when evaluating solar. Traditional solar loans mean taking on new debt, paying interest, and hoping the savings exceed the monthly loan payments. Many Phoenix homeowners are understandably skeptical of that approach, and for good reason.

Phoenix Valley Solar offers a prepaid solar lease that works differently. Instead of borrowing money, you prepay for 20 years of solar energy at a flat rate that reflects a 30% discount off what you would otherwise pay APS over the same period. There are no monthly loan payments, no interest charges, and no new debt on your balance sheet. The prepaid structure means the savings are immediate and predictable from the very first month your system is live.

Because your prepaid rate is fixed, every APS rate increase that happens over the coming years actually increases the value of your solar investment. This is solar financing Arizona homeowners actually want to use, because it removes the complexity and risk that comes with loans or long term payment agreements. The 30% savings are locked in from day one, and every rate hike APS files only deepens the advantage.

Learn more about how Phoenix Valley Solar works by visiting our About page, or reach out directly through our Contact page to speak with a local solar broker who knows the Phoenix Valley market inside and out.

APS Customers Across the Phoenix Valley: City by City Impact

Mesa. Mesa is one of the largest APS service areas in the Valley, with hundreds of thousands of residential customers. Summer cooling loads in Mesa are intense, and the city's mix of older and newer housing stock means energy efficiency varies widely. Mesa homeowners on APS standard residential plans often see their highest bills during the May through September window. Solar adoption in Mesa has accelerated steadily as residents recognize the long term protection it provides against rate hikes.

Chandler. Chandler has seen significant population growth over the past decade, and with it, greater demand on the APS grid. Chandler homeowners in newer developments often carry higher energy loads due to larger square footage and more electronics. A prepaid solar lease with a 30% discount allows Chandler families to offset those costs immediately without taking on new debt. This makes Chandler one of the strongest solar markets in the East Valley.

Gilbert. Gilbert consistently ranks among the fastest growing cities in the United States, adding thousands of new households each year. For Gilbert homeowners on APS, locking in a solar prepaid lease now means protecting against the rate increases that rising grid demand tends to produce over time. The combination of high sun exposure and rising utility costs makes Gilbert an excellent market for residential solar and a smart place to save 30% with a prepaid lease.

Scottsdale. Scottsdale homeowners often have larger properties and higher energy consumption, making them especially sensitive to APS rate increases. With some of the strongest solar irradiance in the country flowing onto Scottsdale rooftops, a well sized system can make a dramatic dent in monthly APS bills. Many Scottsdale residents find that solar positions their homes more competitively in the resale market as well. For more on how solar adds equity, see our detailed post on how solar panels increase home value in the Phoenix Valley.

Tempe. Tempe's urban density and mix of older and newer homes means energy costs vary, but APS rate pressure affects every customer equally. Tempe homeowners who go solar with a prepaid lease find that their bills shrink significantly during peak summer months, when grid demand is highest and APS time of use rates peak. As a college town with a growing population of young families and professionals, Tempe is seeing rising interest in solar as a long term cost reduction strategy.

Queen Creek. One of the fastest growing communities in Arizona, Queen Creek has seen rapid expansion in residential development over the past five years. New homeowners here are establishing energy habits that will define their costs for decades. Going solar with a prepaid lease means locking in savings from the start, before APS rate increases compound further. With large new homes and high cooling loads, Queen Creek households stand to gain among the most from switching to solar energy.

How Much Can You Actually Save on Your APS Bill With Solar?

The savings from residential solar in Arizona are real and measurable. Based on average APS consumption for a Phoenix Valley household of around 1,200 kilowatt hours per month and current APS rates, a solar system appropriately sized for that home can generate savings of $1,500 to $2,500 per year once installed. That figure grows each year as APS rates continue their upward trajectory.

Over 20 years, with conservative annual APS rate increases of 4%, the cumulative savings difference between going solar now versus staying on APS can exceed $50,000 for many Phoenix Valley households. The prepaid solar lease captures a 30% upfront discount on that projected energy spend, meaning you are effectively purchasing two decades of discounted power in a single transaction. No loans. No interest. Just solar energy savings that compound in your favor every year APS raises rates.

The best solar company in Arizona is one that presents you with clear, transparent numbers and lets you make an informed decision. At Phoenix Valley Solar, our solar brokers work across the Valley to match homeowners with the right system at the best price, without the pressure tactics of direct sales companies. Whether you are on APS or SRP, a broker gives you access to multiple installers and the best available pricing, so your 30% prepaid savings go even further.

Frequently Asked Questions About APS Rates and Solar in Arizona

Will solar panels actually protect me from future APS rate increases?

Yes. When your solar system produces electricity, you are using power that costs you nothing extra beyond your initial prepaid investment. Every time APS raises rates, the gap between what you pay for solar energy and what your neighbors pay APS grows wider in your favor. The more APS raises rates over the next 20 years, the more your solar system saves you relative to staying on the grid.

What is a prepaid solar lease and how does it save me 30%?

A prepaid solar lease is an agreement where you pay a single upfront amount for 20 years of solar energy production, at a rate reflecting a 30% savings compared to projected APS costs over that same period. There are no monthly payments and no interest charges. You receive clean energy on your roof at a price that is locked in well below what APS will charge over the next two decades.

What happens to excess electricity my solar panels produce?

Under APS net metering rules, excess electricity your system produces is credited back to your account, which can offset grid usage during nighttime hours or cloudy days. The specific value of those credits depends on your APS rate plan. Our solar brokers walk you through the details during your free home assessment so there are no surprises after installation.

How long does solar installation take for Phoenix Valley homeowners?

Most residential solar installations in the Phoenix Valley are physically completed within one to three days. The full timeline from signed agreement to a live, interconnected system, including permitting and APS approval, typically runs four to eight weeks. Our team handles the entire permitting and utility coordination process on your behalf.

Is solar worth it if I plan to sell my home in the next few years?

Research consistently shows that homes with solar sell faster and at higher values than comparable homes without solar in the Arizona market. A prepaid solar lease is particularly attractive to buyers because the remaining lease term transfers with the home, offering the new owner immediate energy savings with no additional investment required. Going solar now adds a compelling selling point that resonates with today's cost conscious Arizona home buyers.