Solar Panels in Arizona: APS, TEP and SRP Export Rates, Tax Breaks and Savings in 2026

Solar panels in Arizona produce more power per panel than almost anywhere in the country, but in 2026 their value depends on your utility's export rate. APS, TEP and UNS Electric pay a Resource Comparison Proxy (RCP) rate locked for 10 years, SRP sets its own plans, and a $1,000 state tax credit helps.

How do Arizona utilities pay for the solar you export?

Arizona's regulated utilities credit exported solar at a fixed RCP export rate rather than the full retail price. APS pays 5.554¢/kWh for its 2026 tranche and TEP pays 4.62¢/kWh, each locked for 10 years from interconnection. SRP, a public power utility not regulated by the state commission, uses its own market-based export price.

The RCP system began with an Arizona Corporation Commission (ACC) decision in 2017. APS's current Rate Rider RCP tariff (opens in a new tab), effective September 1, 2026, spells out the rules:

• "The RCP rate may not be reduced by more than 10% each year."
• A new tranche starts each September 1.
• Your starting rate "will be applicable for 10 years from the time of their interconnection."
• If you submit your interconnection application before September 1 and finish within 180 days (270 days if the delay is not your fault), you keep the earlier tranche's rate.
• If leftover credits exceed $25 at year end, APS sends a check; smaller amounts carry forward.

Here is how the APS rate has stepped down, from the same tariff:

TEP's RCP page (opens in a new tab) says its export rate of $0.0462 per kWh is in effect from October 1, 2026 through September 30, 2027, with the same 10% cap and 10-year lock. If you went solar on APS before the RCP took effect, your older buyback rate lasts 20 years from your connection date.

For background on how export credits differ from classic net metering, see our net metering explainer.

How much can solar panels save in Arizona?

A 7 kW system in Phoenix makes about 12,285 kWh a year. For a home using 14,000 kWh and consuming 45% of its solar directly, first-year savings are roughly $1,229 on APS's 2026 export rate and $1,166 at TEP's rate. Under old full-retail net metering, the same system would save about $1,897.

How we built the example:

• Production. The Department of Energy's PVWatts calculator (opens in a new tab) gives 1,755 kWh per kW per year for Phoenix, so 7 kW makes about 12,285 kWh.
• Retail price. Arizona's average residential rate was 15.44¢/kWh for January through July 2026, per the EIA Electric Power Monthly (opens in a new tab) (released September 24, 2026). Your plan's time-of-use prices will differ.
• Split. 45% of output (about 5,528 kWh) is used at home and worth the retail rate, about $854. The other 6,757 kWh is exported.
• Price. An example price of $3.00 per watt, or $21,000, minus the $1,000 state credit, so $20,000 net. We set aside $100 a year for upkeep and assume 3% yearly price growth and 0.5% yearly panel loss.

One caution: our calculator grows all savings by 3% a year, but an RCP export rate is locked for 10 years and does not rise. Because exports are a small share of savings here, the effect is modest, but treat the 25-year figures as a rough guide.

Put in your own bill and system size in the solar savings calculator. Choose Arizona, then set the export credit as a share of your retail rate: about 36% for APS's 2026 rate if you pay around 15.4¢.

What are the APS, TEP and SRP solar charges and rate plans?

APS solar customers must be on a time-of-use plan with a 4 to 7 p.m. weekday peak, and a small monthly grid access charge for newer solar customers is now in legal limbo. SRP keeps its own solar plans and removed extra grid access fees for solar customers starting with the November 2025 billing cycle.

APS

The ACC reaffirmed APS's grid access charge (opens in a new tab) on December 17, 2024, describing it as a "nominal fixed charge – between $2 and $3 a month" paid by about 111,000 residential solar customers. On June 16, 2026, the Arizona Attorney General announced (opens in a new tab) that the Court of Appeals vacated that decision and the underlying charges and sent the matter back to the Commission. APS also has a new rate case before the ACC, so ask your installer to model your bill on the rate plan that will actually apply.

SRP

SRP's board materials for its February 27, 2025 pricing decision (opens in a new tab) set these changes, effective with the November 2025 billing cycle:

1. Solar customers pay the same monthly service charge as non-solar customers, with no additional grid access fees.
2. The export rate rose 23% and is now tied to a market price index.
3. New plans E-16 and E-28 are open to customers with or without solar.
4. Older solar plans (E-13, E-14, E-15 and E-27) stay open to new customers until the November 2029 billing cycle.

Check SRP's current solar price plan page for the exact export price before you sign.

What tax breaks does Arizona offer for solar?

Arizona gives a state income tax credit of 25% of the cost of a solar energy device, up to $1,000 per residence. It also treats solar as adding no value for property tax, and deducts sales of solar energy devices from the state sales tax base. The federal 25D credit ended for systems completed after December 31, 2025.

• Income tax credit. A.R.S. §43-1083 (opens in a new tab) allows "twenty-five percent of the cost of the device," and "the maximum credit in a taxable year may not exceed one thousand dollars." Unused credit carries forward up to five years. You claim it with Arizona Form 310, and the statute has no sunset date.
• Property tax. A.R.S. §42-11054 (opens in a new tab) says solar energy devices and grid-tied systems "are considered to add no value to the property on which such a device or system is installed."
• Sales tax. A.R.S. §42-5061 (opens in a new tab) deducts "the amount received from sales of solar energy devices" from the retail tax base. The seller must register as a solar energy retailer.

On the federal side, as of October 2026 homeowners cannot claim the Residential Clean Energy Credit for a system completed this year. A leasing company may still claim a business credit on systems it owns. Our state-by-state incentives guide compares Arizona with neighboring states.

Can an Arizona HOA restrict solar panels?

An Arizona HOA cannot prohibit solar panels. A.R.S. §33-1816 lets it adopt reasonable placement rules only if those rules do not prevent installation, impair the system, restrict its use, or adversely affect its cost or efficiency. Deed restrictions that effectively ban solar are also void.

The statute is short and strong. A.R.S. §33-1816 (opens in a new tab) says: "Notwithstanding any provision in the community documents, an association shall not prohibit the installation or use of a solar energy device." If you sue over a violation and substantially prevail, the court awards you attorney fees.

In practice, submit your plans to the architectural committee with the panel layout and a production estimate. If the HOA asks you to move panels to a face that produces noticeably less, the production difference is your evidence that the rule affects efficiency.

How does Arizona heat affect solar panels and placement?

Arizona's heat lowers panel efficiency slightly on the hottest afternoons, but strong sun more than makes up for it, which is why Phoenix yields about 1,755 kWh per kW a year. Under export rates and an evening peak, west-facing panels can be worth more than their lower annual output suggests.

Panel output falls a little as cells heat up, so good airflow under the panels helps. Most Arizona homes mount panels flush to the roof, and that is usually fine. In Phoenix, at about 33.5° north, the rule-of-thumb best fixed tilt is about 33°, while a common 4-in-12 roof sits at about 18.4°. A tilt lower than latitude favors summer production, which is when Arizona homes use the most power for cooling.

Check your roof with the solar panel angle calculator. If your best roof faces west, ask for a production estimate for both west and south. West panels produce more of their power later in the day, closer to the 4 to 7 p.m. peak, so less of it is exported at the low RCP rate.

Should you add a battery in Arizona?

A battery makes more sense in Arizona than in full net-metering states, because exports earn about a third of the retail price and peak pricing runs into the evening. A battery stores midday solar and uses it during the peak, turning low-value exports into high-value self-use. Utility programs can add some income.

APS's Storage Rewards program pays $110 per average kW of battery support across a May to October season, with events usually between 4 and 10 p.m. TEP and SRP run their own battery programs; check current terms on their sites. Our guide to whether solar batteries are worth it shows how to compare battery savings with the price.

A rough way to judge it: each kWh a battery shifts from export to evening use is worth roughly the gap between your peak price and the RCP rate. If that gap is 15¢ and the battery shifts 10 kWh on 250 days, that is about $375 a year before efficiency losses, so the battery's price and any program payments decide the answer.

What protections do Arizona solar buyers have?

Arizona law requires solar sales and lease contracts to show the total cost in bold, give you three business days to cancel before installation, explain how savings were estimated, and include a warning that utility rates and tax incentives can change. Lease payments cannot start before the utility approves the system.

Under A.R.S. §44-1763 (opens in a new tab), the contract must also list warranties for panels, inverters, racking and batteries, disclose incentives and taxes, and include a written roof repair acknowledgment. A related statute requires the installer to warrant major components for at least two years or provide a production guarantee.

Before you sign, use this checklist:

1. Confirm your utility and the RCP tranche or SRP plan your quote assumes.
2. Ask for the export rate and time-of-use plan in writing.
3. Check that savings use today's export rate, not retail net metering.
4. Confirm the installer's Arizona Registrar of Contractors license.
5. Read our solar sales red flags guide for common pitches, such as promises of the expired 30% federal credit.

Then run your numbers in the solar savings calculator and check your roof angle in the tilt calculator. In Arizona, the sun is a given; the export rate and how much solar you use at home decide the payoff.