TEP Solar Overview
Tucson Electric Power (TEP), a subsidiary of Fortis Inc., serves approximately 450,000 customers in southern Arizona, including Tucson and surrounding Pima County. The Sonoran Desert location provides exceptional solar resources, making this one of the better regions for solar in the country.
Customers: ~450,000
Average rate: ~$0.11/kWh
Peak sun hours: ~6.0/day (excellent)
Net metering: Export rate program
Solar rating: ★★★★☆ (Very Good) (Source: NREL Solar Resource Data)
While TEP's rates are moderate (not as high as California or the Northeast), the exceptional solar resource more than compensates. Systems in Tucson produce significantly more energy per panel than most of the country.
Arizona Sun Resource
Exceptional Solar Conditions
| Factor | Tucson/TEP Territory | National Average |
|---|---|---|
| Peak sun hours/day | ~6.0 | ~4.5 |
| Annual sunny days | ~286 | ~205 |
| Annual kWh per kW installed | 1,700-1,900 | 1,200-1,400 |
| Solar irradiance | Excellent | Moderate |
Climate Considerations
- Heat: Extreme summer heat can slightly reduce panel efficiency
- Dust: Occasional rain naturally cleans panels; minimal maintenance needed
- Monsoons: Summer storms bring brief clouds but also clean panels
- Year-round production: Even winter produces well in Arizona
Net Metering & Export Rates
TEP Solar Programs
Arizona's net metering landscape has evolved. TEP offers export credits for excess solar generation, though rates have decreased from full retail in recent years:
| Feature | Current TEP Policy | Impact |
|---|---|---|
| Export credit rate | ~$0.05-0.08/kWh | Lower than retail |
| Self-consumption | Full retail value (~$0.11/kWh) | Best value for power used |
| Demand charges | May apply on some rate plans | Choose rate plan carefully |
| System size | Limited to customer load | Size for your usage |
Rate Plan Considerations
TEP offers multiple rate plans for solar customers. Choosing the right plan can significantly impact your savings:
- Time-of-use (TOU): Higher rates during peak hours; solar produces during high-value times
- Demand charges: Based on highest usage in a period; can reduce solar savings
- Basic rate: Simpler structure; may be better for some solar customers
TEP Electric Rates
Current Rate Structure
| Rate Component | Approximate Rate | Notes |
|---|---|---|
| Basic service charge | ~$13-15/month | Fixed monthly fee |
| Energy charge | ~$0.10-0.12/kWh | Varies by rate plan |
| Peak TOU rate | ~$0.13-0.18/kWh | During peak hours |
| Off-peak TOU rate | ~$0.06-0.08/kWh | During off-peak hours |
| Average total | ~$0.11/kWh | Typical residential |
Summer vs Winter
TEP rates often differ by season, with higher rates during the hot summer months when AC demand peaks. Solar conveniently produces the most during these high-rate summer months.
Solar Economics
Typical System Economics
| Factor | TEP Territory | National Average |
|---|---|---|
| Electric rate | ~$0.11/kWh | ~$0.16/kWh |
| Sun hours/day | ~6.0 | ~4.5 |
| System cost (6kW) | $14,000-17,000 | $17,000-20,000 |
| Annual production | 10,000-11,000 kWh | 8,000-9,000 kWh |
| Annual savings | $1,000-1,200 | $1,200-1,500 |
| Payback (purchase) | 12-15 years | 10-14 years |
Why TEP Solar Works
- Exceptional sun: 33% more production than average
- Lower install costs: Competitive Arizona market
- Summer alignment: Peak production during peak rates
- High AC usage: Solar offsets expensive cooling costs
- Growing region: Home values increasing
2026 Federal Tax Credit
PPA/Lease: The Section 48E credit (30%) remains available through December 31, 2027. The solar company claims the credit and passes savings to you through lower payments. (Source: IRS guidelines and DSIRE Database)
Impact on TEP Customers
| Option | Federal Credit | Best For |
|---|---|---|
| Cash purchase | None (expired) | Long-term ownership; equity-focused |
| Solar loan | None (expired) | Ownership without upfront cost |
| PPA/Lease | 30% (through 2027) | Lower payments; immediate savings |
Arizona's excellent sun resource helps offset the loss of the federal credit. Systems produce more, saving more money per dollar invested than in less sunny regions.
Arizona Incentives
State and Local Programs
| Incentive | Details | Notes |
|---|---|---|
| Arizona tax credit | 25% up to $1,000 | Modest but helpful |
| Property tax exemption | 100% of added value | Solar doesn't increase property taxes |
| Sales tax exemption | Not currently | Sales tax applies to solar |
| TEP programs | Varies | Check current offerings |
Interconnection Process
TEP Interconnection Timeline
| Step | Timeline | Notes |
|---|---|---|
| Application | Day 1 | Installer submits to TEP |
| TEP review | 10-20 days | Technical assessment |
| Approval to install | 5-10 days | Authorization issued |
| Installation | 1-2 days | Physical install |
| City/county inspection | 5-15 days | Local building dept |
| TEP final inspection | 10-15 days | Meter setup |
| PTO | 3-7 days | Permission to Operate |
Total timeline: 40-65 days typical. Tucson has an active solar market with experienced installers and streamlined processes.
Tips for TEP Customers
Do This:
- Leverage the sun: Your location is a major advantage
- Choose rate plan wisely: Review TEP options with your installer
- Maximize self-consumption: Export rates are lower than retail
- Consider battery storage: Store excess for evening AC use
- Get multiple quotes: Active market means competition
- Check roof condition: Arizona sun is hard on roofs—ensure it's ready
Watch Out For:
- Demand charges: Some rate plans can reduce savings
- Oversizing: Exports have lower value than self-consumption
- Assuming full retail net metering: Export rates are reduced
- Heat-related efficiency loss: Factor in Arizona heat in estimates
- Expecting federal credit: 25D expired for purchases in 2025
Frequently Asked Questions
Does TEP have net metering?
TEP offers export credits for excess solar generation, but at rates lower than full retail (approximately $0.05-0.08/kWh vs $0.11/kWh retail). Self-consumption provides full retail value. This isn't traditional 1:1 net metering.
How much sun does Tucson get?
Tucson averages approximately 6.0 peak sun hours per day and 286 sunny days per year. This is 30-40% more solar resource than the national average, making Tucson one of the best places for solar in the US.
What is the payback period with TEP?
For purchased systems without the federal credit, expect 12-15 years payback. While this is slightly longer than some high-rate markets, Tucson's exceptional sun and lower installation costs make solar economics favorable.
Can I get the federal tax credit with TEP?
For purchased systems, the 30% federal credit (Section 25D) expired December 31, 2025. For PPA/Lease agreements, the Section 48E credit (30%) remains through 2027—the solar company claims it and passes savings to you.
Does Arizona heat hurt solar panels?
Extreme heat does slightly reduce panel efficiency—typically 0.3-0.5% per degree above 77F (25C). However, Tucson's exceptional sunlight more than compensates. Production estimates already account for this.
Should I get batteries with TEP?
Batteries make increasing sense with TEP because export rates are lower than retail. Storing excess daytime production to use during evening peak hours (when you're running AC) can improve economics. Battery costs have also decreased significantly.
Questions About Solar with TEP?
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