Net Metering vs. Net Billing in Arizona
What Is Net Metering?
Net metering is a utility billing program that lets homeowners with solar panels earn credits for the excess electricity they send back to the grid. Under traditional net metering, those credits are applied on a One for one basis— meaning, if you sell them one unit of Power, they will credit you one unit of power. The same rate you pay when buying power from your utility.
Example: If your solar panels generate more electricity than your home uses during the day, your utility gives you a credit for those extra kilowatt-hours at the full retail rate. Later, at night or on cloudy days, you can use those credits to offset the cost of the electricity you draw from the grid.
What Is Net Billing?
Net billing is the current system most Arizona utilities use to credit solar customers. Instead of receiving a one for one credit for the electricity you send back to the grid, you earn credits at a predetermined export rate.
This means you still pay the retail rate when you pull electricity from the grid, but when your panels produce extra power, you’re credited at the predetermined export rate.
Example: If retail electricity costs $0.14 per kWh but your predetermined export rate is export rate is $0.12 per kWh, then every extra kWh your system sends to the grid only earns you $0.12 in credits—even though you’ll pay $0.14 when you buy electricity later.
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The End of Retail Net Metering (2016 ACC Decision)
In December 2016, the Arizona Corporation Commission (ACC) voted to phase out retail net metering. Before this, homeowners earned credits at the full retail rate for every kWh sent back to the grid.
The ACC determined this program was not sustainable long-term and ordered utilities to transition away. After the ruling:
- New solar customers were placed on alternative programs like net billing.
- Existing customers were “grandfathered” into retail net metering for up to 20 years.
Transition to Net Billing and Export Credit Rates
After the ACC decision, major utilities—including APS (Arizona Public Service) and TEP (Tucson Electric Power)—shifted to net billing (also called export credit programs).
Key details:
- Export rates are set by the utility, not tied to retail prices.
- Rates are reviewed regularly (often annually).
- Rates may decline over time, reducing the value of exported solar energy.
Current Net Billing in Arizona
Today, most Arizona utilities use net billing. Homeowners can still save significantly with solar, but success depends on smart energy use:
- Shift usage to daylight hours when panels are producing.
- Add battery storage to avoid selling power back at low export rates.
- Maximize on-site consumption instead of exporting excess.
Even with lower export credits, Arizona’s abundant sunshine and federal incentives keep solar a strong investment.
Net Metering vs. Net Billing: The Key Difference
- Net Metering – 1-to-1 retail credits for exported energy.
- Net Billing – Credits based on a lower, utility-set export rate.
This shift reduces potential savings, but solar remains worthwhile when paired with smart system design.
Arizona’s Shift from Net Metering to Net Billing
- APS – Provides an export credit rate per kWh, reviewed annually. Rates can decline over time.
- SRP (Salt River Project) – Uses different rate plans that vary based on grid demand and exported power.
Benefits of Solar Energy
While these changes reduced the financial benefits compared to older net metering programs, Arizona homeowners still benefit because of:
- Over 300 sunny days per year.
- The 30% federal solar tax credit (ITC).
- Declining installation costs.
- Options to add battery storage for better savings.
Is Net Billing Worth It in Arizona?
Yes. While not as lucrative as net metering, net billing still allows homeowners to:
- Lower monthly utility bills.
- Increase energy independence.
- Maximize solar ROI by adding storage and optimizing usage.
Net Metering vs. Net Billing in Arizona (Comparison Table)
| Feature | Net Metering | Net Billing (Arizona Today) |
| Credit Rate | Full retail rate | Lower export rate (set by utility) |
| Availability | No longer offered for new customers | Standard for APS, SRP, TEP |
| How Credits Work | 1 kWh exported = 1 kWh credited | 1 kWh exported = partial credit |
| Impact on Savings | Higher savings, faster ROI | Lower savings vs. net metering |
| Best For | Legacy customers grandfathered in | New solar customers + storage |
| Policy Notes | Phased out in 2016 | Rates recalculated annually, can decline |
FAQ: Net Metering and Net Billing in Arizona
Why did Arizona end net metering?
In 2016, the ACC ruled that retail net metering shifted costs unfairly to non-solar customers and replaced it with net billing/export credit programs.
Can I still get net metering if I install solar now?
No. Net metering is no longer available for new customers. Only older systems may remain under it (for up to 20 years).
How much are export credit rates in Arizona?
Rates vary by utility and are reviewed annually. APS export rates are currently around 7–9¢/kWh, compared to retail rates closer to 13–14¢/kWh.
Is solar still worth it under net billing?
Yes. While savings are lower, Arizona’s sunshine, federal incentives, and falling solar costs make solar + storage a smart investment.
What’s the best way to maximize savings under net billing?
Shift energy use to daytime, add battery storage, and size your system to match your consumption.
How to Get Started with Net Billing Through JIT Solar
At JIT Solar, we make navigating Arizona’s solar policies simple. Our team:
- Reviews your current utility rates and usage.
- Designs a system that maximizes self-consumption.
- Walks you through your utility’s export credit program.
- Handles all applications, permitting, and installation.
Pro Tip: Pairing solar panels with battery storage ensures you save more under net billing and protect yourself from rising electricity costs.
Ready to explore your solar options? Contact JIT Solar today for a free consultation and personalized solar estimate.