Independent solar advice in Phoenix
APS vs SRP: two very different solar export policies. 6.0-6.5 peak sun hours. $2.13/W installed cost. Separate fire permit required. No federal residential credit.
The federal residential solar tax credit ended on December 31, 2025. We tell you the truth about what is left in 2026: which state programs still apply, and which financing paths can still capture federal value.
Electricity rate as of 2026-06-01. Sun hours: NREL PVWatts Phoenix fixed tilt annual average; range 6.0-6.5 hrs/day across sources. Cost per watt: EnergySage April 2026, Maricopa County Phoenix. Payback estimate assumes zero federal residential credit (Section 25D expired December 31, 2025) and current utility net-metering tariffs.
Your utility determines your savings
Phoenix metro is split between APS (majority of Phoenix proper and western suburbs) and SRP (eastern/southern Phoenix, and communities including Tempe, Chandler, Gilbert, and Queen Creek). The two utilities have very different solar export policies. APS credits exported solar at the Resource Comparison Proxy (RCP) rate of approximately $0.0617/kWh locked for 10 years. SRP credits exports at $0.0345/kWh (TOU Export Plan) and adds a summer demand charge of approximately $14.50/kW on some plans. Confirm your utility at your address before reviewing any solar proposal.
LADWP is a municipal utility exempt from the CPUC's NEM 3.0 mandate. Customers retain full retail 1:1 net energy metering. Every kilowatt-hour your solar system exports to the grid is credited at the retail rate you pay, estimated at 22 to 37 cents per kWh depending on usage tier.
Export credit: approximately 22 to 37 cents/kWh
Full retail 1:1 NEM. Verify at ladwp.com. Rate as of June 2026.
SCE customers are on the NEM 3.0 Solar Billing Plan, which took effect for new interconnections after April 2023. Under NEM 3.0, solar exports earn only 5 to 8 cents per kWh -- roughly 75 to 80 percent less than the retail rate. Battery storage becomes significantly more valuable for SCE customers: stored solar used during peak TOU hours at 35 to 40 cents per kWh avoids the most expensive grid purchases.
Export credit: approximately 5 to 8 cents/kWh (NEM 3.0)
Solar Billing Plan. Verify at sce.com/nem. Battery storage recommended for SCE territory.
Your address determines your utility. Look up your utility at ladwp.com or sce.com before reviewing any solar proposal. The net-metering difference affects your estimated annual savings by $1,000 to $1,500 on a typical 8 to 9 kW system.
Available programs
Federal residential solar credit (Section 25D): expired. The Section 25D residential investment tax credit expired December 31, 2025. The residential credit rate is 0%. State and local incentives below may still significantly reduce your net system cost. Commercial systems still qualify for Section 48E (30%).
| Program | Benefit | Eligibility | Status | Source |
|---|---|---|---|---|
| Arizona 25% State Income Tax Credit Local/State Incentive | 25% of installed solar cost as Arizona state income tax credit, capped at $1,000 per year; excess carries forward to future tax years (A.R.S. 43-1083) Credit is non-refundable; it offsets Arizona tax liability only. Verify eligibility and carryforward rules with a tax advisor. Source: DSIRE / A.R.S. 43-1083. | Arizona state residents with solar on primary residence; must have Arizona state income tax liability | Active | DSIRE (opens in new tab) |
| Arizona Sales Tax Exemption Local/State Incentive | Solar energy devices exempt from Arizona transaction privilege tax (state and county sales tax, total approximately 5.6%) Applies statewide to qualifying solar energy devices. Source: DSIRE. | All Arizona solar equipment purchases | Active | DSIRE (opens in new tab) |
| Arizona Property Tax Exemption (Permanent) Local/State Incentive | Added home value from solar excluded from property tax assessment permanently Permanent exemption with no sunset date. Source: DSIRE. | All Arizona homeowners with solar | Active | DSIRE (opens in new tab) |
| APS Storage Rewards Pilot Local/State Incentive | Approximately $110 per average kW contributed per season for battery systems that dispatch during grid peak demand events; up to 5,000 participants; five-year pilot Enrollment open; verify current availability and enrollment status at aps.com. The earlier upfront $3,750 battery incentive is closed; this ongoing pay-for-performance pilot is separate. | APS residential customers with qualifying battery storage and remote dispatch capability (Enphase, Tesla, or compatible inverter) | Active | DSIRE (opens in new tab) |
Data last verified June 1, 2026. Incentive programs change; verify current amounts and availability at dsireusa.org (opens in new tab) before committing to a project.
Why Phoenix homeowners are moving now
Phoenix ranks in the top 10 U.S. cities for total installed solar capacity with an estimated 10,000+ residential installations per year and a Solar Superstar designation (100+ watts per capita). The city's urban heat island effect is among the largest in the world: core neighborhoods run 10-14 degrees Fahrenheit warmer than surrounding desert, driving summer AC bills of $250-400+. This is the strongest single financial driver for Phoenix solar adoption. Panel temperature coefficient matters more here than in most U.S. cities: rooftop surface temperatures in July regularly reach 65-75 degrees Celsius.
Source: Phoenix Solar Superstar designation (Environment America ranking); Phoenix Office of Sustainability solar resource map and neighborhood-level adoption tracking (2026).
Illustrative example
Zero federal residential credit applied (Section 25D expired December 31, 2025). Figures are estimates based on market data as of 2026-06-01. Your numbers depend on your roof, your utility, and your bill.
Based on a 10 kW system at $2.13/W (EnergySage, April 2026; Maricopa County Phoenix) and an assumed retail rate of approximately 15 cents/kWh (2026). Zero federal residential credit applied (Section 25D expired December 31, 2025). APS export rate is approximately $0.0617/kWh (RCP, locked 10 years from interconnection), so savings come primarily from onsite self-consumption, not export. Arizona's 25% state income tax credit (capped at $1,000) reduces net cost to approximately $20,300 in the first year; excess carries forward. Sales tax and property tax exemptions provide additional effective cost reduction. Without federal 30% ITC, Arizona cash-purchase payback periods have stretched from the prior 5-7 year range to approximately 9-12 years per industry sources.
Ready to see what solar works out to for your Phoenix home?
A free in-home assessment reviews your utility bill, your roof, your options, and every available incentive for your address. No pressure. No shared leads.
Neighborhoods we serve
Established solar saturation; higher installers per block, active neighbor referrals, and permit history at LADBS.
Designated disadvantaged communities (DAC) eligible for SGIP equity resiliency, DAC-SASH, and other income-qualified programs. Income verification required.
Wildfire-affected and adjacent neighborhoods where battery storage demand surged following the January 2025 fires. Rebuilding homeowners and proximate neighbors with elevated grid-resilience priorities.
Permitting and interconnection
Phoenix is the only major Arizona city that requires a separate fire permit for PV and battery installations, in addition to the PDD building permit. Factor both steps into timeline and budget.
Your local Phoenix advisor
[REVIEW TEXT - TO BE PROVIDED: real customer testimonial with APS RCP export rate experience and fire permit process]
System: 10 kW rooftop solar, APS territory
[REVIEW TEXT - TO BE PROVIDED: real customer testimonial mentioning summer AC bill reduction and APS Storage Rewards]
System: 12 kW rooftop solar plus battery, APS territory, Storage Rewards Pilot
For business owners and property managers
Phoenix's data centers, commercial real estate, healthcare campuses, and industrial sector have exceptional solar potential with 6.0-6.5 peak sun hours. The federal Section 48E commercial Investment Tax Credit was available for qualifying projects where construction begins by July 4, 2026. APS and SRP both have commercial solar programs and commercial net billing tariffs. Phoenix PDD and AZ HB2301 apply to commercial permitting.
See commercial solar optionsCommercial solar projects must begin construction by July 4, 2026 to qualify for the 30 percent Section 48E federal tax credit. After that date, the system must be placed in service by December 31, 2027.
Schedule a Free Commercial AssessmentPhoenix solar questions
City-specific answers. Every number references your utility and your permit office.
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