[Originally published on May 5, 2023 | Updated on July 23, 2026 - 1 min read]
Every September, APS evaluates the amount it pays new residential solar customers for excess solar electricity exported back to the grid. These export credits have traditionally played an important role in a solar system's financial return, helping offset electricity costs—particularly during Arizona's long, sunny summers.
Known as the Resource Comparison Proxy (RCP), this annual adjustment has steadily reduced the value of exported solar energy since it was established as part of the Arizona Corporation Commission's 2017 rate case. APS is once again expected to reduce its solar buyback rate on September 1, continuing a trend that has seen export rates decline every year since the program began, with the lone exception of a one-year pause during the COVID-19 pandemic.
At first glance, that may sound like bad news for solar. Fortunately, the reality is much more nuanced.
While the value of exporting excess electricity has gradually declined, the value of consuming more of the solar energy you generate has never been greater. Rising utility rates, data centers, population growth, and evolving APS rate plans continue to make solar the only effective alternative to increasingly costly grid power.
At the same time, the growing adoption of battery storage is changing the economics of residential solar. Rather than relying on export credits, homeowners can store excess solar production for use after sunset or during expensive on-peak hours, dramatically reducing their dependence on the grid and maximizing the value of every kilowatt-hour their system produces.
Of course, a battery isn't in everyone's budget from day one. For many homeowners, APS export credits still play an important role in maximizing the value of their solar investment by providing compensation for any excess solar electricity sent back to the grid.
So, is there still value in locking in today's higher export rate before it drops again? Absolutely. But that value has been steadily declining for years, and homeowners who continue to wait are likely to receive less for every excess kilowatt-hour they export over the next decade.
Whether you're considering your first solar system or already have solar installed, here's what you should know before September 1—and why waiting to lock in your APS solar interconnection agreement could have a lasting impact on your long-term savings.
The APS Solar Buyback Rate Has Been Declining for Years
Since the Resource Comparison Proxy (RCP) was adopted in 2017, APS has evaluated the export rate each year. With the exception of a one-year pause during the COVID-19 pandemic, the rate available to new solar customers has consistently declined—generally by the maximum 10% annual reduction permitted under the Arizona Corporation Commission's approved methodology.
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
- 2025-2026: 6.165 cents/kWh
- Expected Sept. 1, 2026: ~5.55¢/kWh (anticipated)*
(*Assuming the annual 10% reduction is approved as expected.)
Solar Isn't Becoming Less Valuable—Exporting Solar Is
One of the biggest misconceptions surrounding APS's annual buyback adjustment is that it somehow makes solar a less attractive investment.
In reality, the opposite is true.
Every kilowatt-hour your solar system produces and you consume in your home is one less kilowatt-hour you have to purchase from the utility. That's important because the cost of grid electricity has been moving in one direction for years: up.
Rising demand from data centers, population growth, and manufacturing is placing unprecedented pressure on the electric grid—and homeowners ultimately bear the costs of necessary grid upgrades and additional production through higher utility bills. For example, APS is currently asking the Arizona Corporation Commission to approve another 14% residential rate increase—one of the largest in recent years. You can read more about the pending rate case in this Cronkite News report.
We've also covered what the proposed increase could mean for Arizona homeowners and why producing your own electricity continues to provide long-term protection against rising utility costs.
Read more: APS Rate Increases are Coming. The Only Question is How Much
Solar remains the only way to meaningfully reduce your dependence on utility-generated electricity. Every kilowatt-hour you generate on your own roof is one you don't have to purchase, helping to insulate your household from future utility rate increases.
What's changing isn't the value of producing your own electricity—it's the value of selling excess electricity back to APS.
Locking In Today's Export Rate Still Matters
Homeowners who install solar before the annual buyback adjustment takes effect can lock in today's higher export rate for the next 10 years. The yearly step-down summarized above might not look that urgent when taken in isolation, but there are over 8,700 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.
For some homeowners, locking in a higher export rate will prove to be the best long-term strategy. Others may discover that investing in battery storage and minimizing exports altogether offers an even greater return. The important thing is to explore your options before the next buyback adjustment takes effect. Once the export rate is reduced, the opportunity to lock in today's higher compensation is gone—and with it, the ability to maximize the value APS will pay for your excess solar production over the next decade.
Rising Utility Rates Continue to Improve Solar's Value
While the APS rate case is still under review by the Arizona Corporation Commission, one thing has remained remarkably consistent over the past decade: retail electricity prices continue moving upward. Whether or not the Commission approves APS's full 14% increase later this year, generating your own electricity remains one of the few ways homeowners can shield themselves from the likelihood of rising utility costs.
Already Have Solar? Check Where You Are in Your 10-Year APS Agreement
Once you sign an APS Interconnection Agreement, your export rate is locked in for 10 years. If your system was installed within the past several years, you may still have plenty of time remaining before your current export rate expires.
For homeowners who installed solar in 2017 or 2018, however, that 10-year protection will soon come to an end. As those agreements expire over the next 24 months, customers will transition to APS's current export rate—a fraction of what they've been receiving for nearly a decade. As a result, many homeowners should expect to see lower monthly bill savings unless they change how they use the energy their solar system produces.
One option worth exploring is battery storage. By storing excess solar production for use later in the day instead of exporting it to the grid, a battery can help offset the impact of lower export rates while also providing backup power during outages.
Whether that means adding a battery, adjusting your system, or simply understanding what to expect when your agreement expires, now is a good time to review your options. A quick consultation can help you understand how much time remains on your current agreement and identify the best strategy for maintaining your long-term savings.
Final Thoughts
The annual September buyback adjustment isn't a signal that solar is losing value—it's a reminder that the economics of residential solar continue to evolve.
If you're considering your first solar installation, starting the conversation before September 1 may allow you to lock in today's export rate for the next 10 years. If you installed solar in 2017 or 2018, now is the ideal time to review your current agreement and begin planning for the transition to APS's lower export rates.
The right strategy will look different for every homeowner. For some, locking in today's higher buyback rate may provide the greatest long-term value. For others, adding battery storage or making changes to the way their system is used may offer even greater savings over time.
The important thing is not to wait until after your options have changed. Whether you're installing your first solar system or evaluating one you've owned for years, an experienced solar professional can help you understand your current position, explain the choices available to you, and develop a strategy that maximizes your long-term savings.
