[Originally published on May 5, 2023 | Updated on January 24, 2024 - 1 min read]

Seize the Solar Opportunity: Why Now is the Time to Switch Before APS Buyback Rates Drop

APS's Annual Buyback Rate Review: A Call to Action for Solar Enthusiasts

Like clockwork, APS is set for its annual review of solar energy buyback rates, with a new lower buyback rate expected to take effect September 1, 2024. 

The annual evaluation was approved by the Arizona Corporation Commission as part of the 2017 rate case. Since 2017, APS has evaluated and reduced its solar buyback rate by 10% every year, with the exception of 2020 when the reduction was paused due to the Covid 19 pandemic. 

The good news is that if you sign an APS solar interconnection agreement before the critical deadline, you'll be shielded from any further reductions for ten years! Keep in mind that our team needs time to complete the APS application process before the September 1, so we need to lock-in your solar contract by August 21, 2024. 

Let's take a quick look and what you need to know to take full advantage of this important incentive.  

1. A Dwindling Solar Buyback Rate: A Trend You Can't Ignore

The buyback rate, more commonly referred to as the export rate, is the amount that APS will credit residential solar customers for any excess solar energy sent back to the grid. The program traditionally contributes to a more compelling return on investment for residential solar customers, allowing them to export solar energy in the winter months in exchange for energy credits from APS. 

The current rate of 7.619 cents per kWh is anticipated to drop after September 1, continuing a downward trend that began in 2017. Here's a glimpse of 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. 

3. APS's Proposed Rate Hike: Another Reason to Go Solar Now

As recently as March 2024, APS increased its electricity rates by an average of 8% for residential customers. You probably already noticed this in your summer bills. The best way to hedge against these ongoing rate hikes is by making your own electricity. The sooner you go solar the sooner you'll be saving and racking up the critical buyback credits for any excess solar energy sent back to the grid. 

4. Beat the Rush: Start Your Solar Journey Today

Solar installation is a process entangled in various external timelines and backlogs. 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. Capitalize on Attractive Solar Tax Incentives

The 30% federal solar investment tax credit, extended by the Inflation Reduction Act, is a significant benefit when going solar. Essentially, this tax credit allows you to claim up to 30% of the system cost when filing your annual tax return. Arizona also offers a $1,000 tax credit for going solar. If you have a sizable tax liability this year, going solar is a great way to maximize your annual return while also locking in reduced energy costs for decades to come. 

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. As such, existing solar customers are shielded from the upcoming drop. 

Embrace Arizona's Sunshine and Save

Ready to leverage Arizona's sunshine for maximum solar savings? Reach out for a personalized APS solar quote.

*you can access the APS Rate Rider PDF here for more information about the APS deadline.