How Solar Power Affects Your APS/SRP Bill in Arizona

Updated: May 8, 2026

Installing solar panels in Arizona is a strategic financial decision that can markedly lower your energy expenses and promote a sustainable future. As electricity costs continue to rise, Arizona homeowners are turning to solar power for both immediate and long-term financial relief. With over 300 days of sunshine each year, residents in Phoenix, Scottsdale, and across the state are harnessing this powerful, natural resource to reduce their APS or SRP bills.

How Your Solar System Generates Real Financial Savings

A solar energy system offers a multifaceted approach to reducing your electricity costs. By generating your own power, you gain greater control over your energy expenses and reduce your reliance on the grid.

Immediate Daytime Production Benefits

When your solar panels are actively generating electricity during daylight, your home consumes this power directly, effectively providing you with free energy that would otherwise be purchased from APS or SRP. This direct offset is the primary source of immediate savings on your utility bill.

• Peak Production Timing: In Arizona, solar systems reach their maximum power generation capacity during the hottest parts of the day. This is precisely when electricity demand peaks and utility rates are at their highest. Your system’s output directly counters the most expensive energy you would otherwise purchase.
• Self-Consumption Advantages: Every kilowatt-hour (kWh) of solar energy your home consumes is a kWh you do not have to buy from the utility company. This process, known as self-consumption, directly translates into tangible solar savings on your monthly bill. The more you consume your own solar power, the greater the reduction in your dependency on the grid.
• Summer Maximization: Your solar panels are most productive during the long, sunny days of the Arizona summer. This increased output coincides with the period when electricity rates traditionally surge due to high air conditioning usage, allowing you to offset a larger portion of these higher costs.

For example, if your home typically consumes 40 kWh per day and your solar system produces 30 kWh, you will only need to purchase 10 kWh from the utility. This represents a 75% reduction in your daily electricity procurement from the grid. We can help you understand how your energy usage patterns can be optimized with a solar installation.

Utility Export Credits Enhance Your Savings

There are times when your solar panels will produce more electricity than your home is consuming at that moment. This surplus energy is not wasted; instead, it is exported back to the utility grid, earning you additional financial benefits in the form of bill credits.

• APS Export Credits: For customers on an APS solar plan, the export credit rates are currently set at approximately $0.07-$0.08 per kilowatt-hour. This credit is applied to your bill, offsetting the cost of any electricity you draw from the grid at other times, such as at night.
• SRP Export Compensation: SRP customers on popular rate plans like E-13 and E-14 receive a bill reduction of about $0.028 per kilowatt-hour for their exported energy. This compensation helps lower the overall cost of your monthly SRP bill.
• Net Billing Advantages: Although the export credit rates offered by utilities are lower than the retail price of electricity, they are a crucial component of your system’s overall financial return. This net billing process ensures that every kilowatt-hour your system produces contributes to your savings, whether consumed directly or exported to the grid.

Strategic Time-of-Use Optimization

Solar power production aligns seamlessly with the time-of-use (TOU) rate structures common in Arizona, enabling homeowners to maximize their savings by generating power when it is most valuable.

• Peak Rate Avoidance: Solar panels generate the most electricity during midday and afternoon hours, which often correspond with the utility’s on-peak or higher-priced periods. By using your own solar-generated power during these times, you avoid purchasing expensive electricity from the grid.
• Demand Charge Reduction: For homeowners on rate plans that include demand charges (based on the highest peak electricity usage in a billing cycle), solar can be instrumental. By supplying power during high-usage periods, a solar system can lower your peak demand and thus significantly reduce or eliminate these costly charges.
• TOU Plan Compatibility: Solar systems are inherently complementary to time-of-use rate plans. They naturally produce the most energy during the daytime hours when TOU rates are often highest, allowing you to leverage your solar investment to its fullest potential and minimize grid reliance during expensive periods.

Amplify Solar Savings in Arizona with Battery Storage Solutions

Integrating a battery storage system with your Arizona solar installation unlocks a new level of energy independence and creates additional opportunities for significant cost savings.

• Energy Banking: Instead of exporting surplus solar energy to the grid for a lower credit rate, a battery allows you to store this excess power for later use. This “energy banking” ensures you get the full value from every kilowatt-hour your system produces.
• Peak Period Protection: When your solar panels are no longer producing in the evening, utility rates often remain high during on-peak hours. A battery enables you to power your home with your own stored, low-cost solar energy, protecting you from purchasing high-priced electricity from the grid.
• Demand Management: Batteries are highly effective at managing demand charges. The battery can instantly discharge power during moments of high electricity consumption, keeping your home’s demand from the grid low and preventing costly demand fees.

A typical residential battery system stores 10-15 kWh of electricity, which is often sufficient to power essential home systems like lighting, refrigeration, and air conditioning throughout the evening hours when utility rates are highest.

Long-Term Protection Against Rising Electricity Costs

Beyond the immediate monthly savings, a solar system provides crucial financial insulation against the persistent trend of rising utility rates.

• Fixed Production Costs: Once your solar system is installed, the cost of the electricity it generates is locked in for the life of the system—typically 25 years or more. You are no longer subject to the volatile and unpredictable nature of utility pricing.
• Rate Increase Protection: Over the past decade, Arizona utility rates have consistently increased by an average of 2-3% annually. A solar system hedges against these future increases, providing predictable energy costs for decades to come.
• Inflation-Proof Investment: As the cost of everything else rises with inflation, including grid electricity, your solar production cost remains stable. This makes solar a powerful, inflation-proof investment that delivers increasing value over time.

Additional Financial Benefits for Arizona Solar Homeowners

The financial advantages of going solar extend beyond direct utility bill savings, offering a comprehensive return on your investment.

• Property Value Increase: Studies have consistently shown that homes with an owned solar energy system sell for a premium. On average, this increase is about 3-4% more than comparable non-solar properties, adding significant value to your largest asset.
• Arizona Tax Exemptions: To encourage the adoption of renewable energy, Arizona provides significant tax benefits. Solar energy systems are exempt from both state sales tax at the time of purchase and from any increase in your property tax assessment, ensuring you reap the full financial benefits without added tax burdens.
• System Longevity: Premium solar panels are engineered for durability and long-term performance. They are warranted to continue producing at 80% or more of their original efficiency for over 25 years, guaranteeing decades of reliable, low-cost electricity.

Calculate Your Potential Solar Savings in Arizona Today

For most Arizona homeowners, the complete payback on their solar investment is achieved within 7-10 years. After this period, the system continues to generate savings for the remainder of its 25+ year lifespan. The powerful combination of immediate bill reduction, protection from future rate hikes, and attractive financial incentives makes solar power a highly rewarding and intelligent investment for Arizona households.

Discover how much you could save. At Solar Topps, we specialize in providing superior Residential and Commercial Solar Solutions. Contact Solar Topps today for your personalized savings analysis and take the first step toward energy independence.