For years, the recipe for residential solar success seemed simple: fill every available inch of your roof with solar panels. The logic seems sound. The bigger the system, the bigger the savings — right?
That strategy worked in the golden age of net metering, when utilities credited your exported solar energy at the same rate you paid for electricity. Every extra kilowatt-hour your panels generated and sent to the grid translated directly into bill credits. The concept has continued to be viable even as utilities shifted toward net-billing, where the credits were less than those offered through older net metering plans, but still large enough to justify sending excess energy back to the utility.
In Arizona, as in many parts of the country, net metering is largely gone and net billing credits continue to shrink every year, making the prospect of trading excess energy for utility credits far less compelling. Today’s solar success isn’t just about how many panels you can squeeze onto your roof. It’s about when and how you use the energy you generate to maximize financial return. Increasingly, this new strategy means smaller solar arrays paired with a home battery system.
Let’s take a closer look at what’s changed, and how the combination of solar + batteries has dramatically shifted the solar savings strategy.
Maxing out your roof with panels is no longer the slam-dunk it used to be. There are certainly instances where a max panel fit is still a good idea - especially with homes that have extremely high energy demands. But for most Arizona homes, the perfect formula has shifted away from a max panel strategy. Here’s why:
Arizona Public Service (APS) and other Arizona utilities now buy back your excess solar power at a fraction of the retail rate. While you still save when using solar energy directly in your home, midday overproduction often earns only a few cents per kWh when sent back to the grid. This means that extra panels often generate more energy during midday than you can use, and the value of that surplus energy is much lower than it was just a few years ago.
Read: Beat the Clock—APS Solar Buy-Back Drops on Sept 1!
Time-of-Use (TOU) rates mean electricity costs vary depending on when you use it. On-peak rates, often in the late afternoon and evening, can be more than triple off-peak rates. With some TOU plans, the evening on-peak hours span into sunset hours, making solar panels less effective once the sun goes down.
Both APS and SRP offer demand-based rate plans as an alternative to traditional Time-of-Use pricing. These plans charge for your total monthly kilowatt-hours plus an additional fee based on your single highest hour (APS) or half-hour for (SRP) of electricity use each billing cycle. While a bit more complex, TOU plans with demand offer significantly lower per‑kWh rates than standard TOU plans. When designed correctly, these demand-based rate plans can deliver the greatest savings in today’s residential and battery market solar market.
The challenge is that panels alone can’t always handle short bursts of high demand. Turn on the oven, run the AC, and start the dryer within a short window — especially after sunset — and you can trigger a costly demand peak your panels can’t easily offset. A home battery solves this by instantly supplying stored power during those spikes, keeping your demand low and your savings high.
The result? A panel-heavy system with no battery may still leave you paying hefty bills — and missing out on much bigger potential savings.
Pairing solar with a battery changes everything. Instead of dumping excess midday solar into the grid for pennies, you can store it and use it later during expensive on-peak hours.
Arizona’s abundant sunshine means your panels will often generate more power than you need during midday. A battery lets you keep that excess for yourself, instead of selling it to the utility at a deep discount. This is especially important under APS’s rate structures, where the difference between off-peak and on-peak pricing can make or break your savings.
APS, SRP, and TEP all offer demand-based rate plans that can significantly cut per‑kWh costs—if you control your demand. Batteries excel here, virtually eliminating on‑peak grid use and wiping out both demand charges and the highest energy rates.
For some customers, demand charges can make up 30%–50% of their bill.
With a properly sized battery, you can:
In short, you can take advantage of ultra-low off-peak rates, skip expensive on-peak energy entirely, avoid demand fees and power outage concerns — a quadruple win that’s impossible with panels alone.
Solar is never one‑size‑fits‑all. Even with identical homes, energy habits vary widely. So it’s important to note that solar panels without battery are still a very viable option in certain instances. With that said, here’s how a max panels scenario compares to fewer solar panels + battery.
Result:
While adding a battery raises upfront cost, the need for fewer panels offsets part of that expense. Scenario B often delivers lower total bills and higher ROI because energy is used when it’s most valuable — not just when the sun is shining.
Arizona’s grid is vulnerable to extreme weather and outages. Monsoon storms, intense heatwaves, and equipment failures can leave neighborhoods without power for hours—or even days. As climate change drives longer, hotter summers and rapid population growth strains the grid, having a reliable backup means peace of mind knowing your home stays powered no matter what.
A battery system:
Solar panels alone can’t keep your home running during an outage — most grid‑tied systems are required by law to shut down automatically to protect utility workers. A battery keeps operating regardless of grid status, ensuring your home stays powered.
The 30% Federal ITC for solar and batteries is officially ending on December 31, 2025 for residential customers. To qualify, your system must be installed before that date.
Read: Big Beautiful Bill Passes: 2025 Is Your Last Chance to Claim the 30% Solar & Battery Tax Credit
This deadline comes alongside:
The smartest solar investment in Arizona today isn’t about covering every inch of your roof. It’s about pairing solar with storage in a way that maximizes value under your utility’s rate structure.
Designed correctly and responsibly, Arizona customers have a unique opportunity to:
In today’s solar landscape, success isn’t measured in panel count — it’s measured in control. And a battery gives you the control to turn every kilowatt-hour into maximum savings.
If you’re an APS customer wondering whether to max out your panels or invest in a battery, now is the perfect time to run the numbers. With incentives still in place and rates favoring strategic energy use, a smaller solar system paired with the right battery could outperform a roof full of panels — in savings, security, and peace of mind.