Is APS More Expensive Than SRP for Solar Homes in Arizona?

Is APS more expensive than SRP for a typical Phoenix household?

Yes, APS generally charges more per kilowatt-hour than SRP for standard residential usage. The average APS residential rate sits around 12.8 cents per kWh, while SRP comes in closer to 11.9 cents. That gap sounds small on a monthly bill, but it flips the math on solar in some unexpected ways, and it explains why two homeowners in the same suburb can get very different results from the same sized system.

The catch is that "more expensive" depends on what you are measuring. SRP may have a lower base rate, but it pays far less for the solar energy you send back to the grid. And that export credit gap is where the real difference shows up for solar homes. Knowing your utility before you talk to any installer is the single most important step in residential solar Arizona planning.

How do APS and SRP differ on solar export credits?

This is the number that actually drives solar savings. APS pays solar customers roughly 9 to 11 cents per kilowatt-hour for excess electricity exported to the grid through its Resource Comparison Proxy program. SRP's Time-of-Use Export plan pays a fixed 3.45 cents per kWh. That is less than a third of what APS credits.

What that means in practice: every kilowatt-hour your panels produce but do not use yourself is worth about three times more if you are on APS. Size a system too large for your actual consumption on SRP, and a lot of that production goes to the grid at a steep discount. APS customers have more room to overproduce slightly without losing as much value on each exported kilowatt-hour.

This is exactly why working with a solar broker in Arizona who knows both utility structures matters. A system designed for an APS home often needs different sizing and inverter logic than one built for an SRP home, even if the two houses look nearly identical on paper. Generic proposals that skip this step are common, and they tend to produce disappointing results.

For a deeper look at how billing works once your system is running, the Arizona net billing post covers what replaced net metering and what export credits actually look like on your bill today.

Does SRP's lower base rate make solar less valuable there?

Not automatically, but it changes how you size the system. SRP's lower base rate means each kilowatt-hour you displace from the grid is worth a bit less than on APS. Combined with the low export credit, SRP customers get the most value from solar they actually consume during daylight hours, rather than systems designed to maximize total production.

SRP's demand-based plans add another layer of complexity. On most SRP plans, your bill includes a demand charge tied to your highest short burst of electricity use in the billing period, not just total kilowatt-hours consumed. Solar panels reduce your energy volume but cannot reliably cut peak demand, especially on summer evenings when the air conditioning runs hard after the sun goes down. That is why battery storage has gone from optional to close to essential for many SRP solar customers who want real bill reductions.

APS plans are more straightforward for solar. The Saver Choice plan, which most residential solar customers use on APS, is a time-of-use structure without an extra demand charge. Your solar production offsets energy charges during peak and off-peak windows, and the Resource Comparison Proxy credit covers what you export. No demand spike surprise at the end of the month.

What are APS summer demand charges and do they affect solar customers?

APS offers demand-charge plans, but they are not the default for residential solar customers. On the Time-of-Use with Demand Charge plan, the summer demand charge runs $19.585 per kilowatt of peak demand, which adds up fast. Most residential solar customers on APS stick with Saver Choice to avoid this, since solar panels alone do not reliably tame demand the way they handle energy volume. If you are considering an APS demand plan, a battery that can dispatch during peak windows changes the savings math considerably and may make the plan worthwhile.

Which Phoenix Valley cities are on APS versus SRP, and how do you tell?

Neither utility maps cleanly to a city. Both APS and SRP serve neighborhoods within the same cities throughout the Phoenix metro, and this is one of the most common misconceptions that leads to bad solar proposals. Tempe, Mesa, Chandler, Gilbert, Scottsdale, and Phoenix all have neighborhoods on both utilities. Glendale, Peoria, Surprise, and Goodyear are similar. Even adjacent streets can be split between the two.

Your utility depends on your specific address, not your city or zip code. Check your most recent electric bill to confirm which company you pay before you request a single solar quote. A proposal built on the wrong utility's rate structure will have savings projections that are off by 30 to 50%, which sets homeowners up for disappointment after install.

For homeowners in Chandler or Gilbert specifically, we covered the APS vs SRP territory question and what it means for your bill in more detail, including how to verify your address if your bill is unclear.

How does knowing your utility help you size a solar system correctly?

It shapes everything: system size, inverter selection, whether a battery makes sense, and what your realistic payback looks like. APS customers on Saver Choice can often size a system to cover 90 to 100 percent of annual kilowatt-hour usage and come out ahead, with the export credit making up for modest overproduction. SRP customers generally do better sizing to cover daytime usage closely and avoiding significant overproduction that gets credited at 3.45 cents.

At Phoenix's average of more than 299 sunny days per year, residential solar installs produce reliably year-round across the Valley. The question is always whether you are set up to capture and use that production efficiently given your specific utility plan. You can plug your utility, monthly bill average, and home size into our Solar Calculator to see how different system sizes affect your projected savings under either utility structure.

Is APS more expensive than SRP when you factor in ongoing rate increases?

APS rates have risen steadily over the past decade, and the utility filed for another rate increase in late 2025. That trend actually strengthens the solar case for APS customers over time. The more APS charges per kilowatt-hour, the more each kilowatt-hour your panels produce is worth over the life of the system. Solar panels lower electric bill exposure to those increases for the 25 to 30 years a modern system operates.

SRP, as a not-for-profit utility, has historically kept rates lower and more stable than APS, though it did temporarily reduce rates by $0.0038 per kWh for May through October 2026 due to lower natural gas costs. Those standard rates return in November. The trade-off for SRP customers remains the lower export credit and demand charge structure that complicates solar economics compared to APS.

On payback period, APS customers on standard solar plans typically see system payback in the 6 to 8 year range. SRP customers without battery storage often see 8 to 12 years. Add a battery on SRP and you can tighten that payback, but you are also adding upfront cost. Our solar panel payback period post for 2026 walks through the real numbers for both utility scenarios in more detail.

How does the prepaid solar lease work if you missed the 2025 tax credit?

The federal Section 25D residential solar tax credit expired after December 31, 2025. Homeowners who buy a solar system with cash or a loan in 2026 do not receive a federal credit. This is not tax advice, and you should confirm your specific situation with a qualified tax professional.

What has not changed is the prepaid solar lease option. Under this structure, the leasing company owns the system and can claim the 48E commercial credit through 2027, then pass that savings through to you as a lower upfront payment. Homeowners who prepay the lease in full typically receive the same 30 percent discount that buyer-owners once got through the residential credit, just through a different financial mechanism. This path works whether you are on APS or SRP.

The solar energy savings Phoenix homeowners see under a prepaid lease are still real. The monthly production from the system offsets your utility bill under whatever rate plan applies to your address, and you pay significantly less to get there. Contact us to see what a prepaid lease looks like for your specific home and utility, or start with the Solar Calculator to get a ballpark before the conversation.

Why the best solar company in Arizona will ask which utility you are on first

The best solar company in Arizona for your situation is the one that builds your savings estimate on your actual utility rate plan before it suggests a system size. Generic proposals based on national averages or the wrong utility structure are one of the most common complaints from solar customers who feel the results did not match the pitch.

Phoenix Valley Solar works as a solar broker, not an installer. That means we help you compare quotes from multiple vetted installers, each of which should be modeling your savings against your real APS or SRP rate plan. When installers compete for your business through a broker, the proposals get sharper and the savings assumptions tend to be more honest.

If you want to reduce electric bill Arizona costs for the long term, the utility question is where the conversation has to start. Check your bill, confirm your utility, and then use that information as the first filter on any quote you evaluate.

Frequently Asked Questions

Is APS more expensive than SRP for solar homes in Arizona?

APS charges around 12.8 cents per kWh, slightly more than SRP at about 11.9 cents. But APS pays solar customers 9 to 11 cents per kWh for grid exports, versus SRP's 3.45 cents. That export credit gap often makes APS the better utility for solar savings over the long term, despite the higher base rate.

What is SRP's solar export credit rate in 2026?

SRP pays 3.45 cents per kilowatt-hour for excess solar energy exported to the grid under its Time-of-Use Export plan. That is significantly lower than APS's Resource Comparison Proxy credit of roughly 9 to 11 cents per kWh, which is why system sizing and self-consumption matter much more on SRP than on APS.

Do I need a battery with solar on SRP in Arizona?

On most SRP rate plans, battery storage is close to essential for meaningful bill reduction. SRP demand charges measure your highest electricity spike in a billing period, and solar panels alone do not reliably cut that spike, especially on summer evenings. A battery can dispatch power during peak moments and reduce the charge significantly.

How do I know if my Phoenix home is on APS or SRP?

Check your most recent electric bill. Both utilities serve neighborhoods throughout the Phoenix metro, and your address, not your city name, determines which utility serves you. Mesa, Chandler, Tempe, Scottsdale, Gilbert, and Phoenix all have homes on both APS and SRP, sometimes on adjacent streets.

Can I still get a 30% solar discount without the 2025 federal tax credit?

Yes, through a prepaid solar lease. The federal residential tax credit expired after 2025 for homeowners who buy a system outright. But the leasing company can claim the 48E commercial credit and pass the 30% discount to you through a lower upfront payment. This is not tax advice; consult a tax professional for your situation.

Does solar make sense on APS if rates keep increasing?

APS rate increases actually strengthen the solar case over time. Each rate hike makes every kilowatt-hour your panels produce worth more against what you would otherwise pay. APS customers on standard solar plans typically see payback periods of 6 to 8 years and protection from future rate increases for the remaining life of the system.