APS Solar: Better Than SRP
Arizona Public Service (APS) is Arizona's largest utility, serving about 1.3 million customers across 11 of Arizona's 15 counties. If you're in the Phoenix area and have APS (not SRP), you're in a better position for solar.
Customers: ~1.3 million
Net metering: Export rate ~$0.08-$0.10/kWh
Demand charges: Optional (avoidable on some plans)
Solar rating: ⭐⭐⭐ Good
Battery value: Helpful but not essential (Source: utility tariff filings and DSIRE Database)
The bottom line: APS isn't as good as utilities with full retail net metering, but it's far better than SRP. Export rates are reasonable, demand charges are avoidable, and solar economics work without requiring a battery.
APS Net Metering & Export Rates
APS uses a "Resource Comparison Proxy" (RCP) export rate instead of full retail net metering. You get paid less than retail for exports, but it's still reasonable:
| Time Period | APS Export Rate | APS Retail Rate | Value Retained |
|---|---|---|---|
| Off-peak (daytime) | $0.08-$0.09/kWh | $0.10-$0.12/kWh | ~75% |
| On-peak (4-7 PM) | $0.10-$0.12/kWh | $0.18-$0.24/kWh | ~50% |
| Super off-peak | $0.06-$0.08/kWh | $0.08-$0.10/kWh | ~80% |
How Credits Work
- Monthly credits: Excess generation credits roll over month to month
- Annual true-up: Excess credits at year-end paid out at avoided cost rate
- Sizing recommendation: Size to offset ~100% of annual usage
APS Rate Plans for Solar
APS offers several rate plans. Solar customers can often avoid demand charges by choosing wisely:
Saver Choice (TOU-E)
- Best for: Most solar customers without battery
- Demand charges: None
- Peak hours: 4-7 PM weekdays
- On-peak rate: ~$0.18-$0.24/kWh
- Off-peak rate: ~$0.08-$0.10/kWh
Saver Choice Max (TOU-E Plus)
- Best for: Customers with battery storage
- Demand charges: None
- Peak hours: 4-7 PM weekdays
- Higher peak differential: More savings if you can avoid peak usage
Premier Choice (with demand)
- Best for: Large users who can manage demand
- Demand charges: Yes (~$10-$15/kW)
- Only if: You have battery and can control peak demand
APS Solar Incentives
APS has reduced direct solar incentives over the years, but some programs remain:
| Incentive | Amount | Status |
|---|---|---|
| APS Solar Communities | Varies by program | Check availability |
| AZ Property Tax Exemption | 100% exemption | Available |
| AZ Sales Tax Exemption | ~5.6% savings | Available |
| Federal ITC (PPA/Lease) | 30% | Through 2027 |
Note: The federal 30% residential tax credit (25D) ended December 31, 2025. PPA and lease customers still benefit from the 30% credit through 2027, as the solar company claims it and passes savings through lower rates.
APS vs SRP: The Arizona Divide
If you're house hunting in the Phoenix area, your utility matters for solar:
| Factor | APS | SRP |
|---|---|---|
| Export rate | ~$0.08-$0.10/kWh | ~$0.02-$0.04/kWh |
| Demand charges | Avoidable | Mandatory for solar |
| Solar payback | 7-10 years | 10-14 years (w/ battery) |
| Battery required? | No (helpful) | Essentially yes |
| Solar rating | ⭐⭐⭐ Good | ⭐ Difficult |
Typical Savings Comparison
For a home with $200/month electric bill, 7kW solar system:
| Scenario | APS | SRP |
|---|---|---|
| Solar only - Year 1 savings | $1,400-$1,700 | $600-$900 |
| Solar + battery - Year 1 savings | $1,700-$2,100 | $1,400-$1,800 |
| 25-year savings (solar only) | $40,000-$50,000 | $15,000-$25,000 |
Battery Considerations for APS
Unlike SRP where batteries are nearly essential, APS customers have more flexibility:
When a Battery Makes Sense
- High peak usage: If you use lots of power 4-7 PM, battery helps shift load
- Backup power priority: Arizona storms can cause outages
- Maximizing self-consumption: Use your solar instead of exporting
- Future-proofing: APS may reduce export rates further
When a Battery May Not Be Worth It
- Moderate usage: If your bill is under $150/month, payback is harder
- Low peak usage: If you're rarely home 4-7 PM, benefit is limited
- Budget constraints: Solar alone still works well with APS
Frequently Asked Questions
Is APS good for solar?
Yes, APS is a reasonably good utility for solar. Export rates are fair (~$0.08-$0.10/kWh), demand charges are avoidable, and payback periods of 7-10 years are achievable. It's not as good as utilities with full retail net metering, but much better than SRP.
Can I avoid demand charges with APS?
Yes! Unlike SRP, APS offers rate plans without demand charges (Saver Choice/TOU-E). Most solar customers should stay on these plans. Only consider demand-based plans if you have a battery and can actively manage your peak usage.
What happens to excess solar credits at year-end?
APS does an annual true-up. Any excess credits beyond what you've used are paid out at the "avoided cost" rate, which is lower than the export rate. Size your system to use credits within the year rather than building large surpluses.
How long does APS interconnection take?
APS interconnection typically takes 4-8 weeks from application to Permission to Operate (PTO). This is faster than many utilities. Your installer handles all the paperwork.
Should I wait for better APS solar policies?
Unlikely to improve. The trend in Arizona (and nationwide) is toward lower solar compensation, not higher. Going solar now locks in current export rates. Waiting generally costs money.
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