[Originally published on May 5, 2023 | Updated on July 9, 2025 - 1 min read]
Another Solar Incentive Takes a Hit: A Call to Action for Solar Enthusiasts
APS is expected to cut its solar buy-back rate by another 10% on September 1, 2025, shrinking the value of every excess kilowatt you send back to the grid. The addition of Congress's newly approved budget, which ends the 30% federal solar-and-battery tax credit after December 31, 2025, makes the case for acting now unmistakable.
The Arizona Corporation Commission approved the annual evaluation of the APS buy-back rate as part of the 2017 rate case. Since 2017, APS has evaluated and reduced its solar buy-back rate by10 % every year, pausing only in 2020 due to the COVID-19 pandemic.
The good news: if you sign an APS solar interconnection agreement before the critical deadline, you'll be shielded from further reductions for ten years. Doing so would also set you up to receive the 30% solar and battery tax credit before it expires at the end of 2025.
Because our team needs time to complete APS's application process, we must finalize your solar contract by August to ensure there's enough time to make APS's September 1 deadline.*
Let's take a quick look at what you need to know to take full advantage of this significant incentive.
1. A Dwindling Solar Buyback Rate: A Trend You Can't Ignore
The buyback rate, also commonly referred to as the solar export rate, is the amount that APS will credit residential solar customers for any excess solar energy they send back to the grid. The program traditionally yields a more compelling return on investment for residential solar customers, enabling them to export solar energy during the winter months in exchange for energy credits from APS.
The current rate of 6.85 cents per kWh is anticipated to drop after September 1, continuing a downward trend that began in 2017. Here's a glimpse of how the APS buyback rate has changed since 2017:
- 2017-2018: 12.9 cents/kWh
- 2018-2019: 11.61 cents/kWh
- 2019-2021: 10.45 cents/kWh
- 2021-2022: 9.405 cents/kWh
- 2022-2023: 8.465 cents/kWh
- 2023-2024: 7.619 cents/kWh
- 2024-2025: 6.85 cents/kWh
2. A Decade of Security: Locking In Your Solar Contract
If you've been considering solar in APS, doing so before September 1 means you'll lock in today's higher buyback rate for 10 years, the duration of the APS interconnection agreement. The yearly step-down summarized above might not look that urgent when taken in isolation, but there are over 8700 hours in a year and nearly 87,000 hours in a 10-year period. So, even a few cents per kilowatt hour can really add up when you're selling solar energy back to the utility over a decade.
Please act quickly, though, as our team needs time to finalize your solar energy design and APS application before the September 1 deadline. You must have your Sun Valley Solar Solutions contract in by August 21 to make the cut.
APS raised residential electricity rates by an average of 8% in March 2024—something you’ve likely felt in your summer bills. Now the utility has asked the Arizona Corporation Commission for an additional 14% increase in 2026. With electricity costs climbing and Arizona summers growing longer and hotter, the sooner you go solar, the sooner you can shield yourself from the certainty of higher power bills.
4. Beat the Rush: Start Your Solar Journey Today
Solar installation is a process entangled in various external timelines and backlogs. With the loss of federal tax credits this year is certain to be busy for installers and utilities alike. By initiating your APS solar project now, you'll be ahead of the end-of-year rush, reaping the benefits of reduced utility bills sooner. Acting now also ensures you'll get more for every kWh you send back to the utility than you would if you wait until after August.
5. Claim the 30 % Federal Tax Credit Before It Disappears
The 30 % federal solar-and-battery Investment Tax Credit (ITC) expires on December 31, 2025. To qualify, your system must be installed, inspected, and utility-commissioned before that date—a process that usually takes several months and will likely stretch even longer as demand spikes ahead of the deadline. Arizona still sweetens the deal with a one-time $1,000 state solar tax credit.
6. If You've Already Gone Solar, There's No Need to Worry
Once you've signed an APS interconnection agreement, you're locked into your buyback rate for a period of 10 years, or 20 years if your agreement was signed prior to the 2017 rate case. Likewise, the 30% federal tax credit can be claimed by anyone who has a system installed and commissioned prior to the December 31, 2025 deadline.
Ready to leverage Arizona's sunshine for maximum solar savings? Reach out for a personalized APS solar quote.
*2025 schedules are filling quickly do to the loss of several incentives and unusually high demand. We make no guarantees about timelines. The sooner you start the sooner we can get you in the queue. You can access the APS Rate Rider PDF here for more information about the APS deadline.
