Homeowners in Arizona have been experiencing a significant increase in electricity rates, rising from $0.11 per kilowatt-hour (kWh) to a little over $0.14 per kWh in the past year. One of the most effective ways to protect yourself against these rising utility costs is by generating your own energy using solar panels.
But, exactly how much solar panels can save you depends mainly on the utility company. With over 2 million customers, Salt River Project is one of the state’s largest utility companies.
SRP doesn’t follow the same solar guidelines as other utilities in the state, so figuring out how to go solar with SRP and whether it’s worth it can be challenging. Luckily, we’ve compiled everything you need to know about installing solar panels with SRP, from billing plans to incentives.
Key takeaways
- Solar panels cost about $15,500 on average in Arizona before incentives are applied.
- Salt River Project has four billing options for solar customers, all requiring time of use rates and monthly minimum bills.
- SRP does not offer rebates or incentives for solar installations, but state and federal tax credits are available.
- Going solar with SRP can save money on your electricity bills, but demand charges and export rates can make calculating your 25-year savings difficult and require thoughtful energy usage.
How much do solar panels cost in Arizona?
The average solar panel system in Arizona costs about $15,500. After you apply state and federal incentives, that cost falls to just about $9,800! The actual cost of solar panel installations in Arizona will vary depending on how many solar panels you install, your energy usage, and the installer you choose.
In general, homeowners in Arizona can install fewer solar panels than in other states because of the abundant sunshine!
| Pros | Cons |
|---|---|
| Electricity bill savings | Demand charges and low export rates |
| Multiple solar billing plan options | Minimum monthly bills |
|
Plenty of sunlight |
No utility incentives or rebates |
How does SRP bill solar customers?
Salt River Project offers a few billing options for its solar customers. SRP separates its solar plans into two categories: demand plans and export plans. The way these plans work can get confusing, so we’ve broken them down to give you a better idea of what they offer.
| Demand plans | Export plans |
|---|---|
| Customer Generation Plan, Average Demand Plan | Time-of-Use Export Plan, Electric Vehicle Export Plan |
| Monthly service charge | Monthly service charge |
|
Low electric rates |
Higher electric rates |
| Demand charges | No demand charges |
| Time of use rates | Time of use rates |
| Full retail net metering credits | Export credit rate of $0.028 |
Demand plans
The two demand plans, named the Customer Generation Plan and Average Demand Plan, operate on the principles of net metering, require time of use rates, and include demand charges. Under these demand plans, your home uses the solar energy that you produce, and any excess energy is sent to the grid.
At the end of the billing period, SRP calculates the amount of energy your home has taken from the grid and compares it to the amount of energy sent to the grid. If more energy is sent to the grid than used, SRP will apply an electric bill credit to your account. This credit is based on the full retail rate of electricity for each excess kilowatt-hour of solar energy produced.
The demand charges are based on the maximum amount of power used from the grid during on-peak hours. The Customer Generation Plan has tiers of power usage, while the Average Demand Plan has a single, slightly more expensive demand charge rate.
Export plans
SRP’s two export plans do not follow the same rules as net metering. Under the export plans, any excess solar energy is credited at a fixed rate of $0.028 per kWh, regardless of the time of day, instead of being credited at the full retail rate.
Although these plans have higher electricity rates, they do not include demand charges. Depending on how you use energy, this plan could save you more money, even without getting the full retail rate credits.
The export plans may be a better option if you have battery storage. With these plans, you can receive the full retail value of the energy you store and won’t have to worry about demand charges.
Does SRP have solar rebates or incentives?
SRP doesn’t offer any rebates or incentives explicitly for installing solar panels. However, if you install a demand management system alongside your panels, you can receive a rebate of $250 from SRP.
While SRP doesn’t have any substantial solar incentives, a state solar tax credit can be paired with the 30% federal tax credit. The Arizona solar tax credit equals 25% of installation costs, up to $1,000. Sales and property tax exemptions are also in place to keep solar costs low.
| Solar incentive | HEADER |
|---|---|
| Federal tax credit | A federal income tax credit equal to 30% of solar installation costs. |
| Arizona state tax credit | An income tax credit equal to 25% of solar installation costs, up to $1,000. |
| Solar equipment and installation are exempt from Arizona state sales tax. | |
| Property tax exemption | Solar system costs are exempt from property taxes. |
| SRP Demand Management Rebate | $250 rebate for installing a qualified demand management system with rooftop solar panels. |
Steps to going solar with SRP
Installing solar panels isn’t as easy as putting them on your roof and turning them on. A few extra steps are required to ensure your solar system can safely connect to the grid. Here are some of the basic steps you can expect in the process when going solar with SRP:
- Step 1: File an application with SRP. The application will include an interconnection agreement, a contract, site design plans, and other documentation.
- Step 2: Application review. SRP will review the applications, ensuring the design and technical specifications meet the requirements.
- Step 3: Installation and inspections. The actual installation of the panels can take anywhere from one to three days. Once installed, the equipment needs to be verified and inspected by all relevant parties, including SRP and your city.
- Step 4: Commissioning and permission to operate. After inspections are complete, SRP will install the proper meter. There will also be a witness test to demonstrate the system is in working order. Once passed, SRP can grant permission to operate!
Is going solar with SRP worth it?
Installing solar panels as an SRP customer can be a worthwhile investment, but there are important things to consider before signing a contract.
It’s great that SRP offers full retail net metering options, but adding demand charges and minimum monthly bill requirements limit how much you can save. To get the biggest solar savings on these plans, you’ll have to monitor your usage closely to keep your demand charges low. The export plan alternatives alleviate some concerns about demand charges, but the low export rate can’t fully cover future energy usage.
Overall, the only way to know if going solar with SRP is worth it for you is to speak with local solar installers. Solar companies are the experts in savings in your area, so they’ll have more insight into how solar panels can help you.
At SolarReviews, we recommend contacting at least three installers and comparing solar quotes. Not only will this help you find the company you like best, but it will also get you the lowest price possible on a solar installation. Luckily, SolarReviews can put you in touch with pre-vetted trusted companies in your area so you can start saving on your SRP bills!
Going solar with SRP FAQ
How much does Salt River Project (SRP) charge for electricity?
SRP charges an average of around $0.13 per kWh of electricity. SRP requires its solar customers to use time of use rate plans, where electricity rates vary with the time of day and year. You can expect to pay between $0.06 and $0.26 per kWh for electricity during on-peak hours and $0.05 and $0.09 per kWh during off-peak hours if you go solar with SRP.
Will I still get an SRP bill if I install solar panels?
Yes, you will still get a monthly bill from Salt River Project even after you install solar panels. SRP has a monthly minimum bill requirement of either $32.44 or $45.44 per month, depending on the size of your home. Solar credits cannot offset this. You may also have to pay demand charges, depending on the solar rate plan you choose.
Do I need a solar battery with Salt River Project?
You do not need to install a solar battery with Salt River Project. However, a battery may save you additional money on your electricity bills if you use one of the export plans. Even so, the most significant benefit of battery storage for SRP customers isn’t financial savings; it’s backup power. Pairing solar panels with battery storage keeps your lights on despite a power outage.
Can I get free solar panels from SRP?
No, SRP does not provide free solar panel installations. If you see an advertisement for free solar panels in your area, it’s likely for third-party-owned financing options like solar leases and power purchase agreements. These systems have no installation costs, but you have to pay monthly solar payments. Don’t be fooled by tricky advertising!
Catherine Lane
Written Content Manager
Catherine is the Written Content Manager at SolarReviews, where she has been at the forefront of researching and reporting on the solar industry since 2019.