Arizona Net Metering Is Gone. What You Get Instead in 2026

If you've been researching solar in Phoenix, you've probably seen the phrase "net metering" everywhere. The problem is that Arizona net metering no longer exists the way most homeowners picture it. Both APS and SRP completed their transition to net billing in 2023, and the credit you get for sending power back to the grid is substantially lower today than it was five years ago.

This post explains exactly what changed, what you actually earn under each utility's current program, and how the math affects your decision to go solar in 2026.

What Changed in 2023: From Net Metering to Net Billing

Under the original net metering model, utilities were required to credit exported solar energy at the full retail electricity rate. If your panels sent 100 kWh to the grid and your retail rate was 13 cents per kWh, you received a $13 credit. Simple, and favorable.

Net billing works differently. Instead of crediting you at the retail rate, the utility pays for exported energy at a lower rate tied to the avoided cost of generating that power from another source. For APS customers, this is called the Resource Comparison Proxy, or RCP. For SRP customers, the exported energy rate is built into their Customer Generation Price Plan. In both cases, the credit rate is meaningfully lower than what you pay per kWh when you consume electricity.

The Arizona Corporation Commission approved APS's transition, and SRP, as a government entity, sets its own rates independently. The result for homeowners across Phoenix, Scottsdale, Tempe, Mesa, Chandler, Gilbert, and the wider Valley is that the financial case for solar has shifted from exporting as much as possible to consuming as much of what you produce on-site as you can. For background on how the older program worked, see our earlier post on net metering in Arizona.

How APS Net Billing Works in 2026

APS customers with solar installed under the current tariff receive credits for exported energy at the RCP rate. In 2026, that rate sits in the range of 6 to 9 cents per kWh depending on the time of day and season. Meanwhile, the standard residential consumption rate under APS's E-27 tariff runs from around 11 cents per kWh off-peak to over 15 cents during on-peak summer hours.

The spread matters. If you export a kWh and receive 7 cents in credit, then buy that same kWh back in the evening at 14 cents, you've absorbed a 7-cent loss on that unit of energy. Over a full year, a household that sizes its system too large and exports significant volume can find that the export credits do not offset that gap as efficiently as self-consuming every kWh would.

APS customers carry over unused credits from month to month, which is a meaningful benefit. At the end of a 12-month period, any remaining balance is settled at the RCP rate rather than being carried forward indefinitely. Designing your system to avoid large credit balances at year-end is part of what experienced installers and brokers account for when sizing a system.

How SRP Net Billing Works in 2026

SRP operates its solar billing under the Customer Generation Price Plan, which has a different structure than APS's E-27 in several important ways. SRP uses a demand charge component, which means your bill is partly determined by your peak demand, not just total consumption. Solar can reduce your usage significantly while having a limited effect on demand charges unless you also have battery storage to smooth out your consumption peaks.

SRP's exported energy is credited at a rate that currently sits around 2.8 cents per kWh, substantially lower than the APS RCP rate. That gap makes self-consumption even more critical for SRP customers in communities like Gilbert, Chandler East, Queen Creek, and parts of Mesa where SRP is the primary utility.

SRP does not charge a fixed monthly solar connection fee the way APS does, which gives SRP customers a slight advantage on the fixed cost side. The lower export rate, however, makes it essential to think about battery storage as a companion to solar if you want to maximize what you capture at night or during demand peak windows.

What the Numbers Actually Mean for Phoenix Homeowners

A household in Tempe under APS averaging a $180 summer bill and going solar with a right-sized system can still expect meaningful savings even under net billing. The goal shifts from generating a large surplus to covering consumption as directly as possible. A system sized to roughly 90 to 100 percent of your annual usage, timed with consumption patterns, performs well under net billing because most of the production is consumed on-site.

Scottsdale homeowners on APS who run significant pool pumps and air conditioning loads during daylight hours are in a strong position under net billing, because those loads can be powered directly from solar production during peak sun hours, avoiding the retail rate entirely. The same logic applies to Mesa APS customers who can shift dishwasher and laundry runs to daytime.

Phoenix gets between 5.8 and 6.5 peak sun hours per day on average across the year, which remains one of the strongest solar resource profiles in the country. That advantage does not disappear under net billing. What changes is the optimization: you want your high-draw appliances running during production hours rather than counting on export credits to cover them later.

Why Self-Consumption Is the New Solar Strategy

The shift from net metering to net billing has changed how solar should be designed and used, not whether it makes sense. The installers and brokers who are doing this correctly are sizing systems to match consumption rather than maximizing panel count, and they are recommending battery storage to customers with significant off-peak demand or time-of-use rate exposure.

A well-designed solar-plus-battery system in Chandler or Gilbert under SRP conditions can offset a much higher percentage of the bill than a solar-only system oversized for export. Battery storage captures the afternoon production surplus, holds it through the 5 to 9 p.m. on-peak window, and reduces or eliminates what you pull from the grid during the most expensive hours.

If you want to see how system sizing and net billing credits interact for your specific home and utility, the solar calculator on our site walks you through the estimate based on your location, bill size, and usage profile.

The Prepaid Solar Lease: Locking In 30% Savings Without the Tax Credit

One question that comes up constantly in net billing discussions is how the financing choice interacts with reduced export credits. The answer is that a lower export credit rate makes the upfront cost of your system more important, not less. The less you earn per exported kWh, the more the initial price of the system affects your long-term return.

Phoenix Valley Solar's prepaid solar lease is structured as a 30 percent discount from the full cash price of the system. That pricing does not depend on whether you qualify for or can use the federal Investment Tax Credit. For homeowners who missed the 2025 ITC window or who simply do not have sufficient federal tax liability to benefit from a 30 percent credit, the prepaid lease delivers the same discounted price.

There is no lien placed on your property, no loan to qualify for, and no long-term payment obligation. The system is installed and operational at a price 30 percent below market, and your savings from that point forward are a function of how well the system is sized and how you use it under net billing rules.

If you want to understand whether this structure makes sense for your situation, the contact page is the starting point for a no-pressure conversation.

How Net Billing Plays Out Across the Phoenix Valley

In Phoenix proper, where APS serves most of the urban core, net billing has not stopped homeowners from going solar. It has changed the sizing conversation. The typical system for a Phoenix home today is designed around consumption first, export second.

In Scottsdale, the combination of large homes, heavy A/C loads, and APS territory means the export credit calculation matters but self-consumption is high enough that net billing does not dramatically change the math. Systems there tend to perform well because production lines up closely with daytime cooling loads.

In Gilbert and Chandler under SRP, the lower export rate makes battery storage a stronger recommendation than it was under net metering. Several homeowners in those communities who went solar in 2022 or 2023 have since added battery storage specifically because the SRP export credit does not compensate for evening grid consumption the way earlier programs did.

In Mesa, where both APS and SRP serve different neighborhoods, the conversation starts with which utility you are on. The two programs behave differently enough that the same system would perform differently under each billing structure. For more on what homeowners in each utility territory actually pay, see our comparison of APS vs SRP utility costs in Phoenix.

To learn more about Phoenix Valley Solar's independent approach to every project, visit our about page.

Frequently Asked Questions

Is net metering still available in Arizona in 2026?

Net metering as originally structured, where exported solar energy was credited at the full retail rate, is no longer available for new solar installations in Arizona. Both APS and SRP transitioned to net billing programs in 2023. New solar customers are enrolled in their respective utility's current export credit program, which credits exported energy at rates lower than the retail consumption rate.

How much credit does APS give for exported solar energy in 2026?

Under APS's current Resource Comparison Proxy structure, exported solar energy is credited at approximately 6 to 9 cents per kWh depending on season and time of day. This is lower than the standard residential consumption rate, which makes self-consuming your solar production more valuable than exporting it to the grid.

How does SRP's solar billing differ from APS in 2026?

SRP's Customer Generation Price Plan includes a demand charge component and credits exported solar energy at around 2.8 cents per kWh, which is lower than the APS RCP export rate. SRP customers do not pay a fixed monthly solar connection fee, which partially offsets the lower export credit. Battery storage tends to have a stronger financial case for SRP customers because of the demand charge structure.

Does going solar still make financial sense in Phoenix under net billing?

Yes, particularly for homeowners who can align their high-consumption activities with daytime solar production. Phoenix's 5.8 to 6.5 peak sun hours per day means solar still produces substantial energy, and self-consuming that energy at the retail rate delivers meaningful savings. The key is sizing the system correctly for your actual usage rather than maximizing panel count.

What is the prepaid solar lease and how does it relate to the 2025 tax credit?

Phoenix Valley Solar's prepaid solar lease provides a 30 percent discount from the full cash price of a solar installation. This discount is built into the lease pricing and does not depend on your ability to claim the federal Investment Tax Credit. Homeowners who missed the 2025 ITC or who lack sufficient tax liability to use it can still access the same 30 percent discounted price through the prepaid lease.