Solar in Arizona: APS vs SRP Programs Compared

Arizona's abundant sunshine makes it one of the best states for solar energy, but the financial benefits depend heavily on your utility's policies. Arizona Public Service (APS) and Salt River Project (SRP) have different approaches to solar customers, affecting the economics of going solar.

The Solar Landscape in Arizona

Arizona ranks among the top states for solar potential, with Phoenix averaging over 299 sunny days per year. However, both APS and SRP have modified their solar policies in recent years, making it essential to understand current programs before investing.

APS Solar Programs

Net Metering (Resource Comparison Proxy)

APS uses a "Resource Comparison Proxy" (RCP) for crediting solar exports:

Export Credit Rate: Approximately 9-11¢/kWh (varies by rate plan)
Credit Application: Credits apply to energy charges only
Rollover: Unused credits roll over monthly, with annual true-up

APS Solar Rate Plans

Saver Choice (Recommended for most solar customers):

Standard TOU rates apply
Export credits at RCP rate
No additional demand charges beyond standard plan

Saver Choice Plus:

Lower energy rates but higher demand charges
May benefit high-production systems with battery storage
Requires careful demand management

APS Solar Incentives

Federal Tax Credit: 30% of system cost (through 2032)
No State Tax Credit: Arizona eliminated state solar tax credits
Property Tax Exemption: Solar equipment exempt from property tax increases

SRP Solar Programs

Customer Generation Plan

SRP's approach to solar has been controversial, with demand charges that can significantly impact solar savings:

E-27 (No Demand Charges):

Higher energy rates
No demand charges
Better for smaller systems or limited peak shifting ability

E-26 (With Demand Charges):

Lower energy rates
Demand charges based on peak grid usage
Can be beneficial with battery storage

SRP Export Credits

Export Credit Rate: Approximately 2-3¢/kWh
Significantly Lower: Than APS export credits
Battery Storage: More important for SRP customers

SRP Solar Considerations

SRP's demand charges can reduce solar savings significantly:

Peak demand often occurs after sunset when solar isn't producing
Air conditioning in evening hours drives demand
Battery storage essential for maximizing savings

Side-by-Side Comparison

| Feature | APS | SRP |

|---------|-----|-----|

| Export Credit Rate | 9-11¢/kWh | 2-3¢/kWh |

| Demand Charges | Optional (plan dependent) | Standard on most plans |

| Best Rate Plan | Saver Choice | E-27 (no demand) or E-26 with battery |

| Battery Benefit | Moderate | High |

| Payback Period | 6-8 years | 8-12 years |

Making Solar Work in Arizona

For APS Customers

Choose Saver Choice plan for best solar economics
Size system appropriately to offset most usage without excessive exports
Consider battery storage if you want to maximize self-consumption
Pre-cool your home before peak hours to reduce grid purchases

For SRP Customers

Battery storage is essential for good economics
Choose E-27 if you can't add batteries
Monitor demand carefully to avoid high demand charges
Consider smaller systems that primarily offset daytime usage

Financial Analysis Example

6 kW System Comparison

APS Customer (Saver Choice):

System Cost: $15,000 (after federal tax credit)
Annual Savings: $1,800-2,200
Payback Period: 7-8 years

SRP Customer (E-26 without battery):

System Cost: $15,000 (after federal tax credit)
Annual Savings: $1,000-1,400
Payback Period: 11-15 years

SRP Customer (E-26 with battery):

System Cost: $25,000 (after federal tax credit)
Annual Savings: $1,800-2,400
Payback Period: 10-14 years

The Battery Question

Battery storage has become increasingly important in Arizona:

Benefits

Store solar energy for evening peak hours
Reduce demand charges (especially SRP)
Backup power during outages
Maximize self-consumption

Costs

$8,000-15,000 for residential battery systems
10-15 year lifespan
May extend payback period

When Batteries Make Sense

SRP customers with demand charges
Homes with high evening usage
Areas with frequent outages
Customers wanting energy independence

Conclusion

Solar remains a good investment in Arizona, but the economics vary significantly between APS and SRP. APS customers generally see better returns due to higher export credits and optional demand charges. SRP customers should strongly consider battery storage to maximize savings and manage demand charges.

Before going solar, get quotes from multiple installers and have them model your specific usage patterns with your utility's current rate plans. The right system size and configuration can make a significant difference in your long-term savings.

Solar in Arizona: APS vs SRP Programs Compared