Net metering is a solar incentive system through which utility companies pay grid-tied solar customers the full retail rate of electricity for the excess power their solar energy systems produce. It’s a popular incentive in leading solar states, including Massachusetts and California. Unfortunately, Arizona utilities do not offer net metering. Instead, they offer a net billing program.
The distinction between net metering and net billing can be a little confusing. Keep reading to learn more about net billing in Arizona and how you can benefit from Arizona home solar incentives.
What Is Net Billing?
Net billing is similar to net metering. In both programs, homeowners send the extra electricity their solar panels produce to the grid. In return, they receive a credit that can be used to purchase electricity from the grid.
The main difference between net metering and net billing is how much utilities pay for their solar customers' excess electricity. In a net metering system, residential solar customers are paid the full retail rate for the electricity they send to the grid. In Arizona’s net billing system, utility companies purchase electricity at an “excess generation credit rate” that is lower than the retail value of electricity.
Excess Generation Credit Rates for Arizona Net Billing
Every utility offers a different excess generation credit rate. The rate you receive will depend on what utility you use. You can, however, be sure that your rate will be less than the full retail value you pay for grid-generated electricity.
Here are the excess generation credit rates for some of Arizona’s largest utility companies as of November 2022:
Utility | Excess Generation Credit Rate |
APS | $0.08465 per kWh |
$0.0281 per kWh | |
TEP | $0.0703 per kWh |
Solar export rates in Arizona are subject to a 10% decrease every October for new solar customers. However, the export rate at the time you go solar will be locked in for 10 years. The sooner you complete your solar panel installation in AZ, the more you can save with net billing!
Solar Batteries Can Help You Save More with Arizona’s Net Billing Program
Adding a battery to your solar installation can help you save more with Arizona’s net billing program. When you have a solar battery installed, you can store the excess energy from your solar panels in your battery instead of sending it to the grid. Then, when your solar panels are not producing enough electricity, you can use your stored energy instead of buying from the grid. With battery storage, you can get the full value out of the solar energy you produce instead of selling it to the grid for less than it's worth.
Solar Panels Are Worth It in Arizona
Even though Arizona’s net billing program is not as advantageous as other states’ net metering programs, Arizona is still a great state for solar energy. As one of the sunniest states in the country, our climate is optimal for solar energy production, and solar panels in AZ qualify for additional solar incentives, including the 30% federal solar tax credit.
Energy Solution Providers is a leading solar installer near you in Arizona. We are a local company with over 20 years of experience installing solar energy systems, and we can help you maximize your savings with solar panels.