Net billing came to Arizona rooftops, and here is the math that followed

How net billing replaced net metering

If you asked for a rooftop solar quote in Phoenix this fall, the number that used to make the decision easy is gone. For years the pitch was simple: your meter ran backward, and every kilowatt-hour you sent to the grid canceled one you later pulled back, at the full retail price. That is net metering, and for new customers in most of Arizona it ended several years ago, after the Arizona Corporation Commission (the elected regulator that sets rates for investor-owned utilities) finished its value of distributed generation review in the mid-2010s.

What replaced it is net billing, sometimes called an export-credit system. You still get paid for the power your panels push out, but at an export rate the Commission sets (a figure it ties to utility-scale solar costs and calls the Resource Comparison Proxy), not the retail rate you pay to buy power back. New customers are generally locked into the export rate in effect when they connect for about 10 years, and the Commission can only step that rate down by no more than roughly 10 percent a year. The gap between what you earn for exports and what you pay for imports is the whole story here.

The payback math, honestly

Because exports now pay less than retail, the old spreadsheet logic flipped. Power you use the moment your panels make it is worth the full retail price you did not have to pay; power you send out is worth only the lower export credit. That pushed the honest payback period for a plain, no-battery system out by a few years compared with the net-metering era, though the exact number depends on your roof, your rate plan, and how much of your use lands in the late-afternoon and evening peak that most Arizona time-of-use plans now charge the most for.

The response, on the ground, has been batteries. A home battery lets you bank cheap midday solar and lean on it through the expensive evening peak instead of buying at the top rate, which recovers much of the value the export change took away. At last public report, a large and growing share of new rooftop quotes in the state include storage, and federal tax credits have helped offset the added cost. This desk would still read any quote carefully: a battery changes the economics, but it also raises the upfront price, and the payback case rests on assumptions about future rates that nobody can promise.

APS, SRP, and why your utility matters

In the Phoenix metro the single biggest variable is the name at the top of your bill. Arizona Public Service, Tucson Electric Power, and UNS are investor-owned and regulated by the Corporation Commission, so they operate under the net-billing and export-credit rules above. Salt River Project, which serves much of the Valley, is a public power utility governed by its own elected board and is not regulated by the Commission at all.

That split matters because SRP moved on its own, earlier, approving price plans around 2015 that put most new rooftop solar customers onto demand charges (a fee based on your single highest spike of use in the month, not just your total energy). So two neighbors on the same street can face very different solar math depending on which utility the address falls into. Before you sign anything, confirm which utility serves you and ask the installer to model your actual plan, not a generic one.

Worth watching this month

1. The Corporation Commission's annual update to the export rate (the Resource Comparison Proxy) is the routine proceeding to track, and it can lower the credit for new customers by no more than about 10 percent for the coming year.

2. Any open APS rate case and its follow-on filings at azcc.gov are where changes to peak time-of-use hours would surface, and those hours usually move your bill more than the export rate does.

3. SRP board meetings and price-plan notices posted at srpnet.com set the terms for its own solar customers, since the Commission has no say over SRP.

4. Watch whether your quote locks the export rate for the full term (about 10 years for new customers) or quietly assumes future step-downs, because that single assumption drives the payback number.

5. Keep an eye on federal storage and solar tax-credit rules, which are set in Washington, not Phoenix, and which can shift the battery case from one year to the next.