PSO Overview
PSO (Public Service Company of Oklahoma) is part of American Electric Power (AEP) and serves the Tulsa metropolitan area and eastern Oklahoma. Like the rest of Oklahoma, PSO territory has excellent solar resources but faces challenging economics due to very low electricity rates and limited solar-friendly policies.
Net Metering (Limited Program)
PSO offers net metering under Oklahoma's distributed generation rules, but it's a limited program that doesn't provide full retail credit for excess generation:
- System size limit: 100 kW for residential
- Self-consumption: Saves full retail value (~$0.10-0.11/kWh)
- Excess generation: Credited at avoided cost (~$0.03-0.04/kWh)
- Monthly netting: Credits applied to subsequent bills
Why Limited Net Metering Matters
The avoided cost credit for excess solar is a major factor in PSO economics. In states with full retail net metering, oversizing your system doesn't hurt. With PSO, every kWh you export loses about $0.07/kWh in value compared to self-consumption. Strategy: size your system to match your usage closely.
| Solar Usage | Credit Rate | Value per kWh |
|---|---|---|
| Self-consumed | Retail offset | $0.10-0.11 |
| Excess to grid | Avoided cost | $0.03-0.04 |
| Value loss on export | - | ~$0.07 per kWh |
Rates & Economics
PSO has some of the lowest electricity rates in the country:
- Average residential rate: $0.10-0.11/kWh
- National average: ~$0.16/kWh (45% higher)
- No state solar tax credit: Oklahoma has no additional incentive
- Property tax exemption: Solar equipment exempt from property tax
What Low Rates Mean for Solar
Low electricity rates are great for consumers but challenging for solar economics. A 7 kW system producing 9,000 kWh/year saves about $950/year at PSO rates vs. $1,440/year at national average rates. Same system, same sunshine—50% less savings.
Solar Economics for PSO Customers
| System Size | Cost (Cash) | Annual Savings | Payback |
|---|---|---|---|
| 5 kW | $12,500-14,000 | $500-650 | 18-22 years |
| 7 kW | $17,500-19,500 | $700-900 | 18-22 years |
| 10 kW | $25,000-28,000 | $1,000-1,300 | 18-22 years |
Note: Assumes primarily self-consumed solar. Paybacks extend further if significant excess is exported.
Federal Tax Credit (2026)
The federal solar landscape changed in 2026. For PSO customers considering PPA/lease, the federal credit can improve economics:
| Purchase Type | Federal Credit | Notes |
|---|---|---|
| Cash/Loan Purchase | None (25D expired) | No federal benefit |
| PPA/Lease | 30% (through 2027) | Company claims, passes savings to you |
Interconnection Process
PSO follows standard AEP interconnection procedures:
- Application: Submit distributed generation application to PSO
- Technical review: PSO reviews system compatibility (2-4 weeks typical)
- Interconnection agreement: Sign required documents
- Installation: Have system installed by licensed contractor
- Local inspection: Pass electrical inspection (city/county)
- Meter and activation: PSO installs bi-directional meter, enables net metering
Interconnection Timeline
Total process typically takes 8-12 weeks from application to permission to operate. The technical review and meter installation are the longest steps. Work with an installer experienced with PSO/AEP to avoid delays.
The Bottom Line
PSO territory has some of the most challenging solar economics in the country.The combination of very low electricity rates ($0.10-0.11/kWh), limited net metering (avoided cost for excess), and no state incentives creates 18-22 year cash paybacks. Excellent sunshine (5.0 peak sun hours) helps production but can't overcome the policy and rate headwinds.
Solar still makes sense for PSO customers who:
- Want energy independence from the grid
- Believe electricity rates will rise significantly over 25 years
- Prioritize environmental impact over pure financial returns
- Plan to stay in their home long-term (10+ years)
- Want to explore PPA/lease to capture federal tax credit benefits
If you're focused on quick ROI, PSO territory isn't ideal. Consider that your low electricity rates are already a benefit—you're paying less than most Americans for power. Solar adds long-term rate stability and clean energy generation, but the financial case requires a long time horizon.
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