Arizona Solar Export Rates (2026): APS, SRP, TEP & the RCP Annual Step-Down

Arizona was the first major US solar market to end retail-rate net metering (Decision 75859 in 2016, effective 2017). In 2026, no Arizona utility credits exported solar at the full retail rate. Each major utility — APS, SRP, and TEP — runs its own export tariff with its own gotchas. The single biggest determinant of your payback in AZ is which utility's territory your house sits in, BEFORE you even pick panels.

The 3 utilities and their export tariffs in 2026

Key thing nobody tells you: once you interconnect, your export rate is locked for 10 years from your install date (APS, TEP). The annual step-down is for NEW customers each year — so installing in 2026 vs 2027 can mean a 10% lower locked-in rate for 10 years.

Side-by-side math on an 8 kW Phoenix install (APS)

Assume: 14,000 kWh annual production. Home uses 11,500 kWh (Phoenix AC). Exports 2,500 kWh. Install cost $22,400 before 30% federal ITC + 25% AZ state credit ($1,000 cap) = $14,680 net.

The SRP penalty: demand charges

Salt River Project (SRP) — which covers most of the Phoenix metro east + north (Mesa, Tempe, Scottsdale, Chandler) — has the toughest solar tariff in Arizona. Solar customers are auto-enrolled in the E-27 or E-15 plans, both of which include demand charges: a monthly fee based on your highest single hour of grid draw during peak periods (typically 2-8pm summer).

Practical effect: a single hour of high AC + dryer + EV-charger overlap on a 100°F afternoon can produce a $50-$100 demand-charge spike for that month — completely independent of your kWh export credit. The math:

• Demand-charge rate: ~$15.49/kW (summer peak), ~$8.24/kW (winter peak)
• Typical peak demand for a 2,400 sqft AZ home in summer: 5-9 kW
• Typical monthly demand charge: $80-$140 in summer, $40-$70 in winter

This is why batteries are nearly mandatory in SRP territory. A battery flattens your peak demand by absorbing the AC + appliance overlap, often reducing demand charges by 50-70%. Without a battery, SRP solar payback frequently exceeds 14 years.

The Arizona state tax credit (often forgotten)

Arizona offers a 25% state income tax credit on residential solar installs, capped at $1,000. This is stackable with the 30% federal ITC. Both credits are nonrefundable — they reduce your tax liability but don't generate a refund — and can be rolled forward 5 years if your liability is too low to absorb them in year 1.

Combined effective subsidy on a $22,400 install:

• 30% federal ITC: $6,720
• 25% AZ state credit (capped at $1,000): $1,000
• Total: $7,720 (34.5% of gross install)

The 5-point Arizona solar checklist for 2026

1. Confirm your utility territory. APS / SRP / TEP have radically different solar economics. If you can pick between APS and SRP (rare — based on address), APS is materially better for solar.
2. Install BEFORE the annual RCP step-down. APS / TEP rates drop up to 10% for new customers each tariff year. Locking in a 2026 rate for 10 years can be worth $1,000-$2,000 in NPV vs waiting to 2027.
3. Strongly consider a battery — especially in SRP territory where demand charges are the real economic killer. Tesla Powerwall 3 (~$13K installed) or Enphase IQ Battery 5P typically pays back in 5-7 years under SRP rate plans.
4. Roof must be in good condition. Arizona's intense UV degrades asphalt shingles 30% faster than the national average — a 12-year-old roof in AZ behaves like a 17-year-old roof elsewhere. See our roof cost calculator.
5. Verify your installer files for the AZ state credit (Form 310) on your behalf or gives you the paperwork. Some lower-tier installers don't bother and the homeowner forfeits the $1,000.

What if I'm already grandfathered on full retail rate?

Lucky you. Arizona customers interconnected before December 2017 are on the legacy net-metering tariff for 20 years from interconnection. Don't expand the system, don't change the inverter capacity, and don't move (some grandfathering transfers to new owners, some doesn't — verify with the utility BEFORE selling).

Run your numbers

• Solar panel cost calculator — Arizona-adjusted install estimate.
• Arizona home equity loan calculator — pre-filled with AZ median home value for the "own the system" financing math.
• What nobody tells you before solar — the broader 9-issue checklist applies in AZ, too.
• NEM 3.0 explained for California — sister cluster on California's parallel tariff cut.
• Roof cost calculator — Arizona UV accelerates shingle aging; verify roof age before solar.