For years, the biggest decision Arizona homeowners faced when looking for a way to reduce their electric bill was was fairly simple: Should I install solar?
Today, thanks largely to changes in utility rate plans, there’s another important question: Should I install solar alone, or pair it with battery storage like the Tesla Powerwall 3?
The answer isn’t the same for every homeowner, of course. Going solar or adding a battery is not a one-size-fits all solution and never was.
Solar panels can still deliver savings without a battery. But as Arizona utilities continue to change how they price electricity and compensate homeowners for excess solar energy, battery storage is playing an increasingly important role in maximizing the value of the energy your solar panels produce.
At the same time, a battery adds cost to a solar investment. If your utility plan, energy habits and goals don’t justify that additional investment, solar alone may still be the better choice.
The key is understanding what each option actually does—and designing your system around your home, available utility rate plans, and savings objectives. Let’s take a deeper look at both paths.
For this comparison, we’ll use Tesla Powerwall 3 as our primary example because it’s one of the most widely recognized home batteries available today. However, several other battery platforms offer many of the same core capabilities, and the best choice ultimately depends on your home and energy goals.
A traditional grid-connected solar system is relatively straightforward.
Your solar panels produce electricity during the day. Your home uses that solar energy first, reducing the amount of electricity you need to purchase from the utility. When your panels produce more electricity than your home needs, the excess energy is typically exported to the utility grid.
When the sun goes down, solar production stops and your home returns to purchasing electricity from the grid.
Adding a Tesla Powerwall changes that equation.
Instead of automatically exporting all of your excess solar production, Powerwall can store energy for use later. That stored energy helps to power your home after the sun goes down, reduce grid consumption during expensive peak periods and provide backup power during a utility outage.
That control over when excess solar energy is used has become increasingly valuable as Arizona utility rates have evolved and export compensation has declined.
Tesla Powerwall 3 is a home energy storage system designed to work with solar or as a standalone battery system.
Each Powerwall 3 provides 13.5 kWh of energy capacity and up to 11.5 kW of continuous on-grid power, giving it considerably more output capability than earlier generations of Powerwall and many competing home batteries. Powerwall 3 also incorporates a solar inverter, allowing solar and storage to be integrated into a single system when installed together.
For homeowners, however, the specifications are less important than what the battery allows you to do.
A properly designed Powerwall system can:
In other words, Powerwall gives you considerably more control over the energy your solar panels produce—or the grid energy you choose to store—and when and how you use it.
No.
There are absolutely Arizona homes where solar without battery storage makes sense, though those situations are becoming increasingly rare.
If a homeowner uses a significant amount of electricity while the sun is shining, much of the solar energy can be consumed directly by the home. Air conditioning, pool pumps, appliances, home offices and electric vehicles can all create daytime loads that allow solar energy to be used as it is generated.
Solar-only may also make sense when minimizing the initial system cost is the homeowner's highest priority.
The equation begins to change, however, when a home produces significant excess solar during the day and then purchases substantial amounts of electricity from the utility later in the afternoon and evening.
This becomes especially important for homeowners whose heaviest electricity use falls during their utility's most expensive on-peak hours. In Arizona, those peak periods generally occur later in the day, when solar production is declining or has stopped altogether. In these situations, battery storage can become an essential part of the savings strategy by storing lower-cost energy for use when grid electricity is most expensive.
Without a battery, you don't get to save today's excess solar production and use it tonight. It goes to the grid, and the value you receive for that exported energy depends on your utility and rate plan.
Arizona doesn't have one universal solar rate structure.
An APS customer and an SRP customer can have very different economics. Even two homeowners served by the same utility may have different rate structures depending on when their solar system was installed and which rate plan they use.
That's why we don't believe a battery recommendation should be made without first understanding the customer's utility and rate plan.
APS solar customers can receive credits for excess solar electricity exported to the grid, but that energy is worth significantly less than the electricity they purchase from APS. Current export compensation is roughly $0.06 per kilowatt-hour, and the rate declines by an average of 10% annually.
In other words, excess solar still has value—but considerably less than the same energy may be worth if you can store it and use it yourself later.
That makes the important comparison not simply whether APS pays for exported solar, but the difference between what you receive for an exported kilowatt-hour and what it would cost to buy that energy back from the grid later.
That difference can become even more significant during higher-cost periods. APS Time-of-Use plans include on-peak hours from 4 p.m. to 7 p.m. on weekdays, just as solar production is typically declining. Rather than exporting excess solar earlier in the day for a relatively small credit and purchasing higher-cost electricity later, a battery can store that energy for use during the evening peak.
For customers on an APS plan with a demand charge, battery storage provides another potential benefit by helping limit short periods of high grid demand during on-peak hours.
Taken together, declining export compensation, Time-of-Use pricing, and demand charges make energy storage an increasingly important part of the equation for APS solar customers.
SRP presents a different equation because some of its greatest savings opportunities are found on demand-based rate plans—and battery storage can be essential to taking full advantage of them.
Unlike a traditional Time-of-Use plan that charges primarily based on how many kilowatt-hours you consume and when you consume them, a demand plan also considers how much power you draw from the grid at one time during on-peak hours. A single period of high demand—running an air conditioner while cooking dinner, doing laundry or charging an EV, for example—can significantly affect the monthly bill.
That's where batteries become particularly valuable.
A properly designed battery system can virtually eliminate those demand spikes by supplying stored energy when household loads increase, reducing the amount of power being pulled from SRP’s grid during critical on-peak periods. This allows homeowners to take advantage of the lower, demand-fee-free off peak energy after the sun sets and solar production stops.
SRP's current options include E-16, a demand-based plan with a 5 p.m. to 10 p.m. weekday peak period, as well as E-28, which uses a 6 p.m. to 9 p.m. weekday peak period. Both also include super off-peak hours from 8 a.m. to 3 p.m., creating additional opportunities to strategically charge a battery when grid electricity is inexpensive and use that stored energy when it has greater value.
SRP's existing solar plans, including the demand-based E-27 Customer Generation Price Plan, can also deliver significant savings when paired with a properly programmed Powerwall. These plans remain available during the transition period but are scheduled to be phased out by November 2029.
Reade More: SRP’s New Rate Plans: What Solar Customers Need to Know
For SRP homeowners focused on maximizing savings, the conversation increasingly isn't simply solar or battery. It's how solar, battery storage and the right SRP rate plan can work together.
The system must be designed and programmed around the specific rate structure. And when a demand-based plan offers the greatest savings potential, battery storage becomes one of the most important tools for controlling demand and making those savings achievable.
Battery storage is powerful technology, but adding a battery shouldn't be automatic.
Solar alone may be the better fit when:
Clearly identify the goal then program the battery to solve a specific problem or provide a benefit that matters most to that household.
Adding Powerwall becomes more compelling when you want to do more than simply produce solar electricity.
Solar + Powerwall may make sense when:
For many Arizona homeowners, the strongest case for battery storage isn't based on any single one of these benefits. It's the combination.
A battery can provide daily rate-plan optimization while also sitting ready to provide backup power when the grid goes down.
This is one of the most commonly misunderstood differences between solar-only and solar-plus-storage systems.
A standard grid-tied solar-only system shuts down during a utility outage. This is a required safety feature designed to prevent a solar system from energizing utility lines while crews may be working to restore power.
So even if the Arizona sun is shining brightly, a typical solar-only home will not continue operating normally during a grid outage.
A properly configured battery-only or solar + battery system can disconnect the home from the utility grid and continue supplying power for as long as sufficient battery capacity remains. If an outage lasts more than a few hours, however, a solar + battery system has an important advantage: solar panels can recharge the battery during an extended outage, depending on system configuration, available sunlight and household energy consumption.
For homeowners who place a high value on energy security, this can fundamentally change the solar decision.
Yes. Powerwall isn't limited to homeowners installing brand-new solar systems.
Powerwall 3 can be incorporated into many existing solar installations, which means homeowners who already have solar may be able to add battery storage without replacing their entire system.
This is particularly relevant for Arizona homeowners who installed solar years ago.
Your electricity usage may have changed. Your grandfathered utility rate plan may be approaching its expiration date. You may have added an EV, pool, home office or other major electrical loads. Or perhaps backup power simply wasn't a priority when you originally installed solar.
Adding storage can help adapt an existing solar system to the way you use electricity today—particularly if you're transitioning to a newer utility rate plan with less favorable export compensation than you previously received.
However, homeowners with grandfathered solar rates should be especially careful about making system modifications too soon. Depending on the utility and the scope of the changes, modifying an existing system could potentially cause you to lose favorable grandfathered provisions prematurely. That's something that should be evaluated before—not after—new equipment is added.
There's actually a third option that homeowners sometimes overlook: battery storage without solar.
A standalone Powerwall can store cheaper, off-peak electricity from the grid and potentially use that energy strategically during more expensive periods. It can also provide backup power during outages.
For some households, that can make sense.
Maybe the roof isn't suitable for solar. Maybe the homeowner already has another energy strategy. Or perhaps their primary objectives are managing their utility rate and gaining backup power rather than generating electricity onsite.
Solar and battery storage are complementary technologies, but one doesn't necessarily require the other.
If you already know you want both solar and battery storage, designing them together has some significant advantages.
Rather than treating the battery as an accessory, the solar array, inverter, battery capacity, backup loads and utility strategy can all be engineered as a complete energy system. This is particularly relevant with Powerwall 3 because its integrated solar inverter allows solar production and battery storage to be designed together.
It also gives the system designer an opportunity to ask a much better question than simply:
"How many solar panels can we fit on the roof?"
Instead, we can ask:
How should this home produce, store and consume electricity to accomplish the homeowner's goals?
That's a fundamentally different approach to residential energy design.
This is another question without a universal answer.
One Powerwall 3 provides 13.5 kWh of energy capacity, but battery capacity is only one part of proper system sizing.
The right amount of storage depends on factors including:
A homeowner looking to keep refrigerators, lights, internet and a few essential circuits operating during an outage has very different requirements than someone who wants to run multiple air conditioners and most of the home.
This is why battery capacity and battery power output shouldn't be confused. Capacity tells you how much energy is available; power tells you how much equipment the battery can operate at a given time.
We'll explore that distinction in greater detail in an upcoming article.
For most Arizona homeowners installing solar today, solar + battery storage is increasingly the stronger choice.
Solar-only can still make sense for homes that consume most of their electricity during midday hours, use relatively little energy later in the day or have favorable grandfathered utility rates. But those situations are becoming less common.
For most homes, energy use remains high into the late afternoon and evening—just as solar production declines and utility rates often become more expensive.
Solar + Tesla Powerwall 3 addresses that mismatch by storing excess solar for later use, reducing exposure to peak rates, helping manage demand charges and providing backup power.
As export compensation declines and Arizona utilities increasingly reward when and how energy is used, battery storage is becoming less of an accessory and more of an essential part of a modern Arizona solar system.
Powerwall 3 is one of the most recognizable home batteries on the market, and for good reason. Its combination of 13.5 kWh of storage capacity, high power output, integrated solar inverter and mature energy-management platform makes it a strong option for many Arizona homes.
But it isn't the only option—and it isn't automatically the best battery for every homeowner.
Other battery platforms may offer advantages depending on the existing solar equipment, desired storage capacity, electrical configuration, backup requirements, available space and budget. Some homeowners may also benefit from staying within the same equipment ecosystem as an existing solar inverter, while others may prioritize modular expansion or a particular approach to whole-home backup.
That's why we believe the battery should be selected after identifying what the homeowner needs the system to accomplish, rather than starting with a particular brand.
Sun Valley Solar Solutions has been designing and installing solar energy systems in Arizona since 2006. During that time, we've watched Arizona's solar landscape evolve from traditional net metering to today's increasingly sophisticated combination of time-of-use rates, export credits, demand charges and battery programs.
Modern solar design requires more than calculating how many kilowatt-hours a roof can produce.It requires understanding when your home consumes electricity, what your utility charges for that electricity, what your excess solar is worth and what you want your energy system to accomplish.
Sometimes the right answer is solar.
Sometimes it's solar + battery storage.
And sometimes battery storage on its own can accomplish the homeowner's immediate goals.
The important thing is making that decision based on the numbers—not simply following the latest trend.