A guide to going solar with Arizona Public Service (APS)
If you’re one of Arizona Public Service’s (or APS for short) 1.2 million customers, you’re probably tired of two things: your high electric bill and the blistering sun. Unfortunately, we can’t turn down the thermostat on the Grand Canyon State, but what we can do is help you use that abundant sunshine to your advantage. How? By installing solar panels!
At first, the thought of going solar can sound intimidating, especially when you try and piece together what you need to know through APS’ website. That’s why we’ve put together this comprehensive guide of everything you need to know, and can expect, from going solar as an APS customer.
- It's a good idea to install solar panels as an APS customer because the utility’s current solar buyback rate of $0.09 per kWh still provides substantial savings, despite being lower than the retail rate of electricity.
- To cover a monthly electric bill of $150, an Arizona homeowner would need to install a solar system that costs about $9,380, after incentives.
- APS requires solar homeowners to use Time of Use rates, which results in slightly lower solar savings.
- The solar interconnection process takes anywhere from one to four weeks with APS.
- APS offers a solar battery rebate program which can greatly reduce the cost of installing a battery, however, storage isn’t a necessary expense for most homeowners.
How much does a solar system in Arizona cost?
The average homeowner in Arizona can expect to pay about $2.64 per watt of solar installed.
You would need about 5.18 kilowatts (kW) of solar in Arizona to completely cover a $150 monthly electric bill. That’ll cost you about $13,675 before any incentives are considered. After you take the 26% federal solar tax credit and Arizona’s state solar tax credit into account, that cost drops to just $9,380.
The following table outlines the average installation costs for different solar system sizes in Arizona:
|Monthly electric bill||System size||System cost before incentives||System cost after incentives*|
*Includes 26% federal solar tax credit and $1,000 Arizona state tax credit
Remember, these numbers are just estimates. The actual solar system size you need and the price you pay for it will depend on the location of your home, the direction of your roof, shading, and the installer you choose. You can use our solar panel calculator to find out what size solar system is going to meet your unique needs.
Does Arizona Public Service offer net metering?
Despite net billing providing lower savings than a net metering program would, homeowners can still eliminate a majority of their monthly electricity bill when they install solar with APS.
How does APS’ net billing program work?
With APS’ net billing program, your home will use the solar energy that your solar panels produce to help lower your electric bill.
It’s important to note that the solar energy your home produces and uses is worth the full-retail rate of electricity. For APS customers, that’s around $0.12 per kWh, but the exact rate will vary, depending on your individual rate plan.
If your solar panels are producing more electricity than your home is using, the excess energy is sent to the grid and is valued at just $0.09 per kWh, or about 25% less than the retail rate. That amount is then applied to your utility bill as a credit to offset future energy costs. APS calls this the ‘Resource Comparison Proxy Export Rate’ (RCP rate).
For example, let’s say your solar panels produce 5 kWh of electricity between 1 PM and 2 PM, but your home only uses 3 kWh. That means you’ll have 2 kWh of solar electricity that you’ll send to the grid. APS will give you a credit on your bill of $0.18 (2 kWh x $0.09). That $0.18 will then be used to cover a portion of the costs of electricity you take from the grid later in the day.
Time of Use rates
APS customers who install solar are required to use Time of Use rate plans. Under this rate plan structure, the utility charges you different prices for electricity, depending on the time of day.
Electricity is most expensive during on-peak hours (between 4 PM and 7 PM). Any other time of day is considered off-peak, and electricity rates will be lower. In the winter months, 10 AM to 3 PM is considered "super off-peak" and electricity is even cheaper.
APS offers two Time of Use rate plans: Time of Use and Time of Use with Demand Charge. The main differences to note between these plans is that the Time of Use with Demand Charge plan has lower rates, but an additional monthly usage charge. The Time of Use plan has higher rates but no extra charge.
The following charts show you how much APS will charge you for electricity under each of the plans:
If you’re going solar, your best bet is to choose the Time of Use plan (the one without monthly usage/demand charges). This is because excess solar credits cannot offset demand charges, so going with the Demand Charge plan automatically reduces how much money solar can save you.
Does APS offer any solar incentives or rebates?
No, APS does not offer any solar incentives or rebates. However, the state of Arizona does offer a tax credit that can be used on top of the federal solar tax credit. The Arizona state solar tax credit is equal to 25% of system costs, or $1,000 - whichever is lower. Most solar systems will get the full $1,000.
Although APS doesn’t offer incentives for solar installations, they do have a solar battery incentive program called the APS Residential Battery Pilot Program. Let’s take a closer look at how to qualify for the program and how much it can save you.
APS Residential Battery Pilot Program
APS customers who install either Enphase or SolarEdge batteries are eligible for a one-time incentive of up to $3,750. There are two program options homeowners can choose from: the Data Only program and the Data and Battery Management program.
Data Only program
Under the Data Only program, homeowners agree to give APS access to their battery system’s performance data. In exchange, APS will pay the homeowner $500 per kW of power output their battery has. The Data Only program incentive amount cannot exceed $2,500.
Data and Battery Management program
With the Data and Battery Management program, homeowners not only let APS see their battery system data, they also allow APS to use some of the energy stored in the battery during times of high demand to relieve stress on the grid.
APS can use up to 80% of the capacity stored in the battery no more than 100 times per year. Choosing the Data and Battery Management program gives homeowners an additional $1,250, for a maximum incentive value of $3,750.
For example, let’s say you install the Enphase IQ 10 battery and opt for the Data Only program, under which you can receive $500 per kW of power the battery can release. The IQ Battery 10 has a power output of 3.84 kW, so you would receive a $1,920 incentive.
3.84 kW * $500 per kW = $1,920
If you installed the Enphase IQ 10 and opted for the Data and Battery Management program, you would get an additional $1,250 on top of the $1,920, bringing your total incentive to $3,170!
Steps to going solar with Arizona Public Service
Once you’ve chosen the solar installer that you want to complete your solar system, there isn’t much more for you as the homeowner to worry about. The installer will handle almost all of the paperwork that APS needs to approve your system.
The entire solar interconnection process with APS takes anywhere from one to four weeks, depending on the complexity of your system.
Step 1: Submit interconnection application
Your installer will help you fill out the interconnection application to APS. You can find a copy of the APS interconnection agreement here.
APS also requires the installer to provide a few other documents along with the interconnection application, including a copy of your contract with the installer, a Site Plan, Electrical Three Line Diagram, and Authorization form. There may be some other necessary documents as well, but again, your installer will take care of it.
Step 2: Interconnection approval and installation
Once your interconnection agreement and all necessary documentation have been submitted, APS will either request revisions to the application, like changing the design of the system for certain safety reasons, or approve the project.
Generally, you’ll get approval from APS on the first submission. However, if you’re installing a solar battery with your solar panels, the process may take a bit longer. APS requires more detailed plans for battery storage systems and it may cause a bit of back and forth between them and your installer.
Once APS approves your interconnection application, the installation can begin!
Step 3: Submitting final documentation
Once the installation is complete, your installer will provide APS with a few more documents signifying that the system is complete and up to code.
Step 4: APS inspection and meter installation
After receiving final documentation, APS will schedule a time for inspection to make sure that the solar system matches the approved plans. While there, APS will also install a special electric meter that allows you to take part in their net billing program.
If APS finds issues with the system design during inspection, your installer will be notified of what needs to be fixed. APS will schedule another inspection when your installer has informed them that all necessary issues have been addressed.
Step 5: Permission to operate
Once your solar system passes APS’ inspection and the meter is installed, your system is officially ready to turn on! APS will leave a door hanger at your home and send you an email confirming that you have permission to operate.
Should APS customers consider installing a solar battery?
From a financial standpoint, you probably don’t need a solar battery. Solar batteries cost upwards of $10,000 and they won’t provide you with that much in additional electric bill savings.
However, APS does have that battery rebate program which makes installing a battery way cheaper, and thus a better financial investment, than it would be in most places.
Basically, do you want to spend a little more money upfront on a battery and have it take longer for your solar system to pay for itself, or not get a battery and have the payback period be shorter?
It’s up to you if the peace of mind you get from having a battery is worth the additional cost.
Is going solar with APS worth it?
To sum it up, yes, it is definitely worthwhile to go solar with APS.
Although they don’t offer full-retail net metering, their current solar buyback rate is still high enough to provide homeowners who go solar with significant electric bill savings. Plus, with the Arizona solar tax credit, the federal tax credit, and battery incentives, homeowners can stand to save a lot of money on the upfront cost of the installation.
However, it’s important to keep in mind that APS’ solar buyback rate won’t stay this high for long. Next year, the buyback rate will be lower than it is now, which also means less savings. Not only that, starting January 2023, the federal tax credit will be worth less than it is now. So, in order to maximize your savings, we strongly advise installing solar sooner rather than later.
To start your journey of going solar with APS, use our solar panel calculator. There, you’ll find an estimate of how much you’ll save on your APS bill by installing solar panels, plus you can get in touch with reliable, local solar installers in your area.