Net Metering in Arizona: Getting Credit for Extra Solar Energy

Phoenix averages 6.5 peak sun hours per day. That's not just good for solar production. It also means your panels will regularly generate more electricity than your home uses, especially during the long sunny spring and fall months when air conditioning isn't running hard.

What happens to that extra power? It flows back into the grid, and under Arizona's net metering rules, your utility gives you a credit for it. Understanding how those credits actually work makes a real difference in how you plan your system.

How net metering works in Arizona

Net metering lets solar homeowners send surplus electricity to the grid and receive bill credits that offset future usage. When your panels produce more than your home needs, a bidirectional meter tracks the flow in both directions. You draw from the grid at night or on cloudy days, and your credits cover some or all of that cost.

The key word is some. Arizona's net metering rules have changed over the years, and what you receive per kilowatt-hour exported is no longer equal to what you pay per kilowatt-hour consumed. That gap matters, and it is worth understanding before you go solar.

APS net metering: what you actually earn

If your home is served by Arizona Public Service (APS), the credit you receive for exported electricity is called the Export Energy Credit (EEC). APS currently pays roughly $0.028 to $0.075 per kilowatt-hour for exported power, depending on your rate plan.

Compare that to the retail rate most APS customers pay, which runs between $0.13 and $0.18 per kilowatt-hour depending on season and time of use. You're essentially selling power back at about one-fifth to one-half of what you buy it for.

This is why system sizing matters. The goal is to produce close to what you actually consume, not to overproduce and export large amounts at a low rate. A well-designed system for a Phoenix Valley home is sized to offset 90 to 100 percent of annual consumption so the math stays in your favor.

SRP net metering: a different structure

If you're served by Salt River Project instead of APS, the setup is different. SRP moved away from traditional net metering in 2015 and now places solar homeowners on the Customer Generation rate plan. Under this plan, billing uses a demand charge plus a flat energy rate, and exported electricity is credited at a lower avoided-cost rate.

For SRP customers in Mesa, Tempe, and parts of Chandler, the economics of solar still work well. The math just plays out differently. SRP's rate structure rewards homeowners who use more of their own solar power directly rather than exporting large amounts to the grid.

What this means for Phoenix Valley homeowners

The net metering setup in Arizona is actually a strong argument for pairing solar with smart energy habits. Running dishwashers, laundry, and other high-draw appliances during peak solar production hours keeps more electricity in your home and reduces your dependence on lower-value export credits.

Phoenix, Scottsdale, and Paradise Valley homeowners on APS get roughly 300 sunny days per year, which means consistent production from spring through fall. During winter, production dips slightly but heating and cooling loads are minimal. The natural seasonal balance tends to match panel output to consumption across the year.

In Chandler and Gilbert, where many of the newest residential developments sit, APS is the dominant utility. Homeowners there face the same EEC rate structure but also benefit from newer construction with better insulation, which reduces total consumption and lets a modest system go further.

In Glendale and Peoria on the west side, most homeowners are also APS customers with similar net metering dynamics. A system sized for a 2,000 to 2,500 square foot home typically produces a small surplus in spring that accumulates credits applied to summer bills when air conditioning drives demand up.

Net metering credits and your annual bill

One thing that surprises new solar customers is how credit timing works. APS credits roll forward month to month but don't pay out as cash at year end. Building up credits in spring and drawing against them in summer is the system working exactly as designed.

Any remaining credit balance at the end of a 12-month period resets rather than converting to a check. This is another reason to size your system accurately. A massively oversized system that builds enormous credits you can never use is money left on the table.

Most Phoenix Valley homeowners with properly sized systems end up with annual APS bills in the $10 to $25 range (the monthly customer charge billed regardless of usage), down from electric bills that often ran $200 to $350 per month in summer.

Why the prepaid solar lease changes the math

Net metering rates and the gap between export and retail prices are one reason financing structure matters so much. With a solar loan, you're still on the hook for monthly payments. If export credits come in lower than expected, your net cost is higher than you'd like. With a prepaid solar lease, you pay one upfront amount at a 30 percent discount off APS rates and you're done. No monthly payment, no loan interest, and no dependency on export credit values to keep your numbers positive.

The 30 percent savings is locked in from day one, regardless of what APS does with export rates in the future. Rate structures may change. Export credits may shift. Your prepaid lease rate doesn't.

This matters in Arizona because regulators at the Arizona Corporation Commission have adjusted net metering terms before and utilities have proposed further changes. Locking in savings through a prepaid structure gives you protection against that uncertainty in a way that a loan-financed system does not.

How to use our solar calculator

If you want to see what net metering might look like for your specific home, our solar calculator lets you enter your current monthly APS or SRP bill and get an estimate of how much solar can offset it. You'll see projected annual savings, estimated system size, and what the prepaid lease structure looks like for your situation.

The calculator accounts for current export credit rates, local sun hours, and typical seasonal patterns across the Phoenix Valley. For more on why our 6.5 daily peak sun hours make net metering particularly effective here, the post on Arizona sun hours compares our production numbers against most of the country.

Protecting your net metering rights in Arizona

Arizona law currently requires investor-owned utilities to offer net metering to solar customers. The Arizona Corporation Commission governs the specific rates and terms. Homeowners who install solar today have net metering protections in place, though the exact credit rate can be revisited in future regulatory proceedings.

Some financing structures respond better to rate changes than others. Homeowners who've paid for their system upfront through a prepaid lease aren't exposed to monthly payment risk when export rates shift. The savings are already banked.

If you'd like to understand how net metering applies to your home or learn more about the prepaid lease, reach out through our contact page or visit the about us page to learn how Phoenix Valley Solar works with homeowners across the East and West Valley.

Frequently asked questions about net metering in Arizona

Does APS pay cash for surplus solar energy?

APS does not pay cash for exported power. You receive bill credits at the Export Energy Credit rate, currently around $0.028 to $0.075 per kilowatt-hour depending on your rate plan. Credits roll forward month to month but reset annually rather than paying out.

What is the difference between net metering and the export energy credit?

Traditional net metering credits exported power at full retail rates. Arizona moved away from that model. APS now credits exported power at a lower avoided-cost rate through the Export Energy Credit program, which is why sizing your system to match your actual usage is so important.

Does SRP offer net metering?

SRP does not offer traditional net metering. Solar customers on SRP are placed on the Customer Generation rate plan, which uses a demand charge structure and credits exported energy at a lower rate. Solar still makes financial sense in SRP territory, but the billing model works differently than APS.

How does the prepaid solar lease protect me from future net metering changes?

Because you pay once upfront at a 30 percent discount, your savings are locked in. If APS changes its export credit rates in a future rate case, your monthly bill impact stays minimal since your solar electricity is already priced below market from day one.

How many solar panels does a Phoenix home typically need?

Most 2,000 to 2,500 square foot Phoenix homes use 12,000 to 18,000 kilowatt-hours per year. At 6.5 peak sun hours per day, a system in the 8 to 12 kilowatt range typically covers most or all of that usage. Exact sizing depends on roof orientation, shading, and which rate plan you're on.