Arizona solar savings after the 2026 rate shifts

In early 2026, both APS and SRP shifted their on-peak windows later in the day and trimmed the export credit rate. The headlines made it sound worse than it is. The actual effect on a residential solar payback is real but small — and it pushes the design toward systems that include some level of storage rather than pure grid-tie. Here is the math.

What actually changed

The short version, for the two big utilities most of our customers see:

• APS on-peak window moved to 4pm to 7pm year-round, with the highest summer rates concentrated in that window
• SRP shifted its E-27 customer-generation plan to a similar 3pm to 6pm peak with slightly reduced excess generation credit
• Export credit rates fell by roughly 8 to 12% versus the 2024 schedules, depending on plan

What did not change: net billing — you still get credited for exported solar — and the federal Investment Tax Credit, which is still at 30% through 2032 under current law. Those two are the structural drivers of payback and neither moved.

What it means for a typical Phoenix home

For a 12 kW grid-tied system on an APS service that averages 1,800 kWh per month in summer and 900 kWh per month in winter, the 2024 payback under the old time-of-use windows was a little under 8 years. Under the 2026 windows, that same system pays back in just under 9 years — a bit over a year longer, not the doubling some of the headlines implied.

The reason the change is modest is that residential solar in Phoenix is heavily summer-weighted. Even with the peak window moved later, you are still producing significant power into the early evening and you are still offsetting the highest-rate consumption of the day. The marginal kWhs that now miss the peak window are mostly the late-day production from west-facing arrays.

Where storage starts to pay

The 2026 rate shift makes a small home battery noticeably more attractive than it was. The mechanism is simple: a 13.5 kWh battery lets you store the late-morning and midday production that would otherwise export at the reduced credit rate, and discharge it during the 4pm to 7pm window when grid power is most expensive. The arbitrage is real money — roughly $400 to $700 a year for a typical Phoenix home — and it shaves the payback on the storage portion to around 9 to 10 years on its own.

Stack that with the solar, and a 12 kW + 13.5 kWh system in Phoenix pays back in roughly the same window as a pure grid-tie system did in 2024. You are not worse off; you have just shifted the optimal design.

What we recommend for new installs in 2026

For homes signing new contracts this year, we are pricing two designs side by side on every quote:

• Pure grid-tie sized to offset 95 to 105% of annual usage — best $/kWh, longer payback
• Grid-tie + single battery sized for the 4pm to 7pm load — slightly higher install cost, faster payback under the 2026 rates, and resilience during summer outages

For most households the storage-included design now wins on pure payback math, not just resilience. That is new.

What has not changed

Roof orientation still matters, shading still matters, and the design quality of the install — wire sizing, optimizer placement, inverter sizing — still drives 10 to 15% of long-term production. None of the rate changes change those fundamentals. A bad install at the new rates pays back worse than a good install at the old rates.

If you want to see how the math shakes out on your specific roof and your specific utility plan, we will run a free quote against your last 12 months of bills. The form is at the top of every page.