Is solar worth it in Arizona in 2026?

How Arizona pays for your solar power

Net billing (exports credited below retail). APS and TEP credit exports at a fixed Resource Comparison Proxy rate locked for 10 years, and SRP uses its own export credits under separate price plans.

In the calculator, 40% of your solar output is used at home at the retail price and the rest is exported at about 36% of retail, so each solar kWh is worth 62% of the retail price on average. Change it if your utility pays more or less. Method

State or utility incentive	What it is worth
Arizona residential solar energy device credit	25% of cost, up to $1,000 per residence (nonrefundable, 5-year carryforward)

How exports are credited

APS closed its net metering rider to new customers (the Legacy rider is frozen), and new residential solar now falls under net billing. The Arizona Corporation Commission (ACC) regulates the investor-owned utilities, APS and Tucson Electric Power (TEP), and both credit exports under the Resource Comparison Proxy (RCP) rate. It is a net billing structure: power the home uses is billed at the utility’s retail price, and power sent to the grid earns a monthly bill credit at the RCP rate, which is lower than retail.

APS. Rate Rider RCP sets a rate for each annual group of new customers. The tariff, effective September 1, 2026 under ACC Decision No. 82122, lists the 2025 group at $0.06171 per kWh (September 1, 2025 through August 31, 2026) and the 2026 group at $0.05554 per kWh (September 1, 2026 through August 31, 2027). A customer’s rate is based on the RCP in effect when the interconnection application is submitted, provided the system is installed and approved within 180 days (270 days if a third party or APS causes the delay). That initial rate applies for 10 years from interconnection, and afterward the credit follows whatever rate is in effect at that time. The RCP cannot fall by more than 10% in a year. Credits roll over month to month, and after the December bill a check is issued if the remaining credit exceeds $25.

TEP. TEP states that an export rate of $0.0462 per kWh is in effect from October 1, 2026 through September 30, 2027. Customers are paid the RCP in place when they requested interconnection for up to 10 years, and the rate cannot fall by more than 10% in a year.

SRP. Salt River Project is a public power district, not regulated by the ACC, and sets its own price plans. Its solar customers are on plans with a per-exported-kWh credit rather than retail-rate netting. SRP’s December 2024 amended proposal for prices starting with the November 2025 billing cycle describes that credit as calculated from a CAISO market node. SRP’s own solar plan pages could not be opened during this research, so the current export credit values and which plans accept new solar customers should be confirmed with SRP directly.

Utilities outside these three, including electric cooperatives and municipal utilities, set their own terms. This page does not cover them.

State incentives in 2026

Arizona offers a personal income tax credit under Arizona Revised Statutes 43-1083 for installing a solar energy device in a resident’s home. The credit is 25% of the cost of the device, with a maximum of $1,000 in a tax year. Credits cannot add up to more than $1,000 in total over different tax years for the same residence. If the credit exceeds the tax owed, the unused part can be carried forward for up to five consecutive tax years. Married couples filing separately each claim half. The installer must give the taxpayer an accounting of the cost, and the device and its installation must meet the requirements of Arizona’s Title 44, chapter 11, article 11. The credit is claimed with Arizona Forms 310 and 301.

The federal 30% residential credit ended for systems installed after December 31, 2025, so this state credit is now the only credit on a new residential system. Arizona’s statute does not set an end date for the residential credit.

What it means for payback

Under net billing, an exported kilowatt-hour is worth well under what a kilowatt-hour costs to buy, so the share of solar power used in the home as it is produced matters more than total output. Running air conditioning during sunny hours, shifting loads, or adding a battery that stores midday power for the evening raises the value of each panel. Locking in an export rate for 10 years helps, but the rates for new applications have fallen each year, and the capped $1,000 credit covers a small part of a typical system’s price.

Other rules worth knowing

APS requires the interconnection application to be submitted before the annual rate change on September 1 to keep the earlier group’s rate, and the system must be completed on time to hold it. Systems must use solar photovoltaic panels behind the billing meter that serve the home’s load.