Arizona replaced traditional net metering with net billing — and the difference costs solar customers thousands of dollars over the life of their system. If you're going solar, understanding how export credits work is essential for sizing your system correctly and maximizing your savings.
Net Metering vs Net Billing: What Changed
Under the old net metering system, every kWh you exported to the grid was credited at the full retail rate. Send 1 kWh to the grid, get 1 kWh back later — like a 1:1 bank.
Under net billing (current system), exported kWh are credited at a much lower export rate set by the utility. You're still credited for excess production, but each exported kWh is worth far less than each kWh you buy.
| Net Metering (Old) | Net Billing (Current) | |
|---|---|---|
| Export credit rate | Full retail (~$0.12-0.15/kWh) | Reduced export rate |
| APS export rate | ~$0.128/kWh | $0.076/kWh (RCP rider) |
| SRP export rate | ~$0.119/kWh | $0.028/kWh |
| Value of self-consumption | Same as export | Much higher than export |
| System sizing strategy | Oversize freely | Match to consumption |
How Net Billing Works Hour by Hour
Net billing uses instantaneous netting. Each hour (or shorter interval), your meter compares what your panels produce vs what your home uses:
Your panels produce 5 kWh, your home uses 7 kWh. You draw 2 kWh from the grid and pay the retail rate for those 2 kWh. The 5 kWh from solar saved you $0.64 (APS) or $0.60 (SRP) you would have paid.
Your panels produce 8 kWh, your home uses 3 kWh. The 3 kWh used directly saves you full retail rate. The remaining 5 kWh is exported to the grid and credited at the export rate: $0.38 (APS) or $0.14 (SRP).
The Key Insight
Every kWh you use directly from your panels saves you $0.128 (APS) or $0.119 (SRP). Every kWh you export only earns you $0.076 (APS) or $0.028 (SRP). On SRP, a kWh you use yourself is worth 4.25x more than a kWh you export. This is why system sizing and self-consumption matter so much under net billing.
APS Net Billing Details
- • Export rate: $0.076/kWh (Resource Comparison Proxy rider)
- • Rate lock: Export rate locked for 10 years from activation
- • Annual decrease: New customers get a rate that decreases up to 10%/year (your rate is locked at enrollment)
- • Billing cycle: Monthly. Export credits offset usage charges. Unused credits roll forward within the billing year.
- • Annual true-up: Any remaining credits at the end of the year are paid out at the export rate (not retail).
- • Export value ratio: $0.076 / $0.128 = 59% of retail
SRP Net Billing Details
- • Export rate: $0.028/kWh
- • Rate lock: Export rate locked for 10 years from activation
- • Billing cycle: Monthly. Export credits appear as line items on your bill.
- • Demand charges: Separate from export credits — you still pay demand charges even with high exports.
- • Export value ratio: $0.028 / $0.119 = 24% of retail
SRP's Export Rate Is Very Low
At $0.028/kWh, SRP credits are worth less than a quarter of retail. A 10 kW system exporting 500 kWh/month earns only $14/month in credits. The same 500 kWh consumed directly would save $59.50. This is why SRP customers should prioritize self-consumption and consider battery storage to avoid exporting.
How to Maximize Your Net Billing Value
Size your system to match — not exceed — your usage
Oversizing wastes money under net billing. Every kWh of excess production only earns the export rate. Size your system to cover 90-100% of your annual usage.
Shift heavy loads to solar production hours
Run your pool pump, dishwasher, laundry, and EV charger during 9 AM - 3 PM when solar production peaks. Using electricity while panels produce avoids the export rate penalty.
Add battery storage (especially on SRP)
Batteries store midday excess for evening use — converting $0.028/kWh export credits into $0.119/kWh self-consumption savings. On SRP, a battery can quadruple the value of your excess production.
Pre-cool your home before peak export hours
Set your thermostat to cool aggressively 10 AM - 2 PM (using your own solar power), then raise the setpoint during late afternoon. Your home becomes a thermal battery.
How Net Billing Affects Your Solar ROI
Under old net metering, system sizing was simple — produce as much as you use annually and you'd zero out your bill. Under net billing, the timing of production vs consumption matters because exports are worth less than self-consumption.
For a typical Arizona home consuming 1,500 kWh/month, roughly 30-40% of solar production is exported (used directly) and 60-70% is consumed on-site. The blended value per kWh is:
| Utility | Self-Consumed Value | Exported Value | Blended Value* |
|---|---|---|---|
| APS | $0.128/kWh | $0.076/kWh | ~$0.112/kWh |
| SRP | $0.119/kWh | $0.028/kWh | ~$0.092/kWh |
*Assumes 65% self-consumption, 35% export. Your ratio depends on usage patterns. Try the Gilbert or Surprise calculator to see your specific numbers.
Bottom Line
Net billing means your solar system's value depends heavily on how much of your production you use directly. APS customers get a reasonable export rate (59% of retail). SRP customers get a poor export rate (24% of retail) and need to be more strategic about self-consumption and battery storage. Either way, the key is: use your solar power when it's being produced. See our APS vs SRP rate comparison for the full picture.
Sources
- APS — Resource Comparison Proxy (RCP) rider schedule (aps.com)
- SRP — Customer generation rate schedule E-27 (srpnet.com)
- Arizona Corporation Commission — Net metering/net billing decisions
- Solar United Neighbors — Arizona net metering guide