Solar Quotes in Arizona: Export Rates, State Tax Rules and What to Ask

How exported solar is credited (APS, TEP, UNSE)

• Arizona Corporation Commission (ACC) Decision No. 75859 (2017) set up the Resource Comparison Proxy (RCP) export rate. Under the RCP, APS pays residential customers with on-site solar for exported energy at a set price instead of retail net metering. The RCP may not drop more than 10% per year. Source: APS's ACC-approved RCP Plan of Administration, aps.com (accessed 2026-10-20; this is a utility-filed tariff document, not an ACC page)
• In 2023 the ACC approved revised RCP export rates for APS, UNSE and TEP. Each tranche's rate is held for 10 years for customers who interconnect while it is in effect. Source: azcc.gov (accessed 2026-10-20). Rates are reset each year, so ask your utility or installer for the current one.
• SRP and electric co-ops set their own rules. Check with your provider.

State tax provisions (from the Arizona Revised Statutes)

• Income tax credit: A.R.S. 43-1083 allows a credit of 25% of the cost of a solar energy device installed at your Arizona residence. The credit is capped at $1,000 for each residence, and unused credit can carry forward up to five years. Source: azleg.gov (accessed 2026-10-20)
• Sales tax: A.R.S. 42-5061 deducts sales of solar energy devices from the retail transaction privilege tax base, for registered solar energy retailers. Source: azleg.gov (accessed 2026-10-20)
• Property valuation: A.R.S. 42-11054(C) says solar energy devices and grid-tied PV systems built primarily for on-site use "are considered to add no value" to the property for valuation. Source: azleg.gov (accessed 2026-10-20)

Is solar worth it in Arizona?

It depends on your bill, roof and utility rules. Here is an estimate for a home with a $150 monthly electric bill and a south-facing, unshaded roof, before any incentives:

• Residential electricity averaged an estimated 15.44¢/kWh in Arizona (January–July 2026), below the U.S. average of 18.19¢ (28 of 51, highest first). Source: EIA Electric Power Monthly, Table 5.6.B (accessed 2026-10-20)
• Small rooftop systems in Arizona produced an estimated 1,953 kWh per kW of panels in 2024 (2024 small-scale solar generation divided by average 2023–2024 small-scale capacity). Source: EIA Electric Power Annual 2024, Tables 3.21 and 4.7.B (accessed 2026-10-20)
• Estimated system size: 4.7–6.3 kW, producing about 10,742 kWh a year (estimated).
• Estimated installed cost: $16,500–$28,600 before incentives, using $3.00–$5.20 per watt. Source: Lawrence Berkeley National Laboratory (2024 installed prices, 20th–80th percentile; accessed 2026-10-20)
• Estimated simple payback: 9–20 years. Savings depend on how your utility credits exported energy (see above).

Estimates only, based on public data and simple assumptions. Actual production, cost, and savings vary by home, utility, rate plan, and installer. Not a quote, and not a guarantee of savings. Ask your installer about any state, local, or utility incentives that apply. State and local programs: DSIRE.

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A note on the federal tax credit

The federal residential clean energy credit (25D) doesn't apply to expenditures made after December 31, 2025. The IRS treats an expenditure as made when installation is completed, so most systems installed in 2026 don't qualify. If a quote assumes a 30% federal credit, ask the installer to explain it. Source: IRS OBBB FAQ, irs.gov (accessed 2026-10-20). This page isn't tax advice.

Questions to ask

1. Which export rate does your estimate assume, and when does it lock?
2. Is the estimate built on a specific time-of-use plan?
3. Did you include the state credit, and how did you calculate it?

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