Your Solar Panels May Last 30 Years. Your Utility Agreement May Not.
Consider a homeowner who went solar in 2017. The system performed the way it was supposed to, monthly bills were predictable, and the panels still produce electricity almost as well as they did when they were first installed. Then the homeowner discovers that the export-rate protection attached to their system has an expiration date—and it's approaching faster than they expected.
Nothing is wrong with the equipment. What's changing is the agreement: specifically, what the utility pays for the excess electricity your panels send back to the grid. Panels can keep producing for decades, but the value of that electricity is set by utilities and regulators, and subject to change.
So here's the question: what happens to your solar investment when your original utility agreement expires, even though your equipment is still performing exactly as it did on day one? The answer depends on which utility you're with, when your system was interconnected, and how much of your production you export versus use at home.
Grandfathering means certain existing solar customers are allowed to keep an older utility arrangement even after it's closed to new customers. In Arizona, that has mostly meant holding on to more generous compensation for excess solar energy.
The vocabulary matters here. Under traditional net metering, electricity your panels send to the grid is credited against what you buy at roughly the retail rate. Net billing, which replaced net metering for new APS customers in late 2017, works differently: exported energy is metered instantaneously and credited at a set export rate that is considerably lower than the retail price you pay for grid power. "Export compensation" is the umbrella term for the amount your utility pays for those exports, whether that's a fixed number, a number that resets every year, or a netting formula.
Older arrangements can be financially advantageous precisely because they pay more for exported solar energy. That's why buyers and sellers of solar homes pay close attention to these arrangements (our guide to buying and selling a solar home covers this in detail). APS's legacy grandfathering stays with the home and can pass to a buyer, but it can be lost by switching rate plans, relocating the system, or increasing the system's capacity beyond set limits.
Protections also differ by utility and by the year your system was interconnected. Three situations in particular get lumped together even though they work differently:
All of this points to some important deadlines approaching over the next few years that could significantly impact solar homeowners across the Valley. Our advice? Read on, understand your options, and have a plan in place so you’re not caught off guard.
In 2017, APS replaced net metering for new solar customers with its Resource Comparison Proxy (RCP), a system that establishes how much homeowners are paid for excess solar energy sent back to the grid. Each September, APS sets a new export rate for that year's group of new solar customers, known as a tranche. Although annual reductions are capped at 10%, APS has consistently lowered the rate by the maximum allowed nearly every year since the program began, with 2020 being the lone exception during the COVID-19 pandemic. As a result, export compensation has fallen from 12.9 cents per kilowatt-hour (kWh) in 2017 to just 5.554 cents for customers entering the program beginning September 1, 2026—a decline of nearly 57%.
Your tranche's rate is protected for 10 years from the date your system was interconnected. After that, the tariff says the bill credit is based on the purchase rate in effect at that time. In plain terms: Your panels will continue producing electricity just as before, but the energy you send back to the grid will be worth significantly less. A 2017-tranche customer moving from 12.9 cents to today's 5.554 cents, for example, would see each exported kilowatt-hour lose more than half its value!
Timing matters, because the first of these locked APS rate plans will begin to expire for solar customers beginning in late 2027.
Homeowners with older net-metering arrangements have a different timeline. APS closed net metering to new customers by September 1, 2017. Existing customers who met the eligibility requirements were grandfathered under their original net metering arrangements for 20 years from the date their systems were interconnected. For example, a system interconnected in 2014 stays grandfathered until 2034. When that term ends, export credits are based on the annual RCP rate in effect at that time. While many legacy net-metering customers (those interconnected before September 2017) still have years of protection remaining, those with the oldest systems are already reaching the end of their grandfathering periods.
SRP's situation is different. Instead of individual 10-year export-rate locks expiring one customer at a time beginning in September 2027, SRP will retire all four of its legacy solar rate plans at once. These include E-13 (Time-of-Use Export), E-14 (Electric Vehicle Export), E-15 (Average Demand), and E-27 (Customer Generation). Although these plans remain available to new solar customers today, all four will be discontinued following the November 2029 billing cycle.
Their replacements, E-16 (Manage Demand 5–10 p.m. and Save) and E-28 (Conserve 6–9 p.m. and Save), rolled out in November 2025 and are available to customers with and without solar today. All solar customers will be required to transition to one of these newer plans after the November 2029 billing cycle. There is no plan at this time to offer any extended grandfathering protection.
For a more detailed breakdown of how these new plans work and what they mean for solar customers, read our Guide to SRP's New Rate Plans
Both E-16 and E-28 are time-of-use plans with a super off-peak window from 8 a.m. to 3 p.m. every day, which overlaps with the hours of strongest rooftop solar production. The more expensive on-peak hours arrive in the evening, when the sun dips and solar panel production naturally drops. E-16 also adds a demand charge based on your highest on-peak power use; E-28 doesn't. Exports are credited at an export rate, which stood at 1.87 cents per kWh as of May 2026 and is recalculated each May.
For some customers, that's a real change in structure, not just a new name. E-13 and E-14 pay a fixed 3.45 cents per exported kilowatt-hour. E-15 and E-27 use net metering, where excess kilowatt-hours are subtracted from delivered kilowatt-hours to arrive at a net figure, rather than being credited at a separate export rate. A solar system sized and configured around one of those structures may no longer be optimized for the new rate plans.
Whether these mandated new plans make your bill higher, lower, or about the same depends on how much you rely on export credits, when your household uses electricity, and which of the two new plans you ultimately choose.
It depends on how much electricity your system exports, when your household uses electricity, and how the new rate structure applies. A simple hypothetical shows why.
Imagine a system that exports 5,000 kWh over a year (an illustrative figure, not a typical one). At the 2017 tranche rate of 12.9 cents, those exports earn $645 in credits. At today's 5.554 cents, those same credits would earn about $278. Same panels, same production, roughly $367 less, or about $31 a month. Now take a home that exports only 1,000 kWh a year: the same rate change costs about $73.
The point is that export credits apply only to the energy you send out. The solar energy you use directly in your home keeps offsetting grid purchases at the full retail rate. So a drop in export credits doesn't automatically translate into an equal jump in your total bill; the effect scales with how much you export, and households can respond by shifting flexible loads toward midday or adding battery storage.
Declining export credits aren't the only concern facing APS solar customers. APS is also seeking a roughly 14% rate increase. The current rate case includes proposed changes to how electricity rates are structured, although it's not yet clear how those changes might affect customers on legacy solar plans.
For SRP customers, the calculation is different. Because the transition involves entirely new rate structures rather than simply a reduction in export compensation, the best starting point is to compare your last 12 months of electricity usage against how E-16 and E-28 would calculate those same charges.
Yes! Adding battery storage is one of the most effective ways to adapt an existing solar system to changing utility rate structures. Instead of exporting midday surplus for increasingly smaller credits, a battery stores your excess solar energy and releases it during the more expensive evening hours. Done well, that increases your self-consumption, reduces exposure to on-peak pricing, helps manage demand charges on plans that have them, and adds backup power during outages.
Perhaps more importantly, batteries offer something that solar panels alone cannot: greater control over when and how you use the energy you produce. The more of your own electricity you can generate, store, and consume, the less dependent you become on utility pricing decisions. While no battery can completely insulate a homeowner from future rate increases, combining solar with storage can significantly reduce your exposure to shifting rate plans and declining export credits.
What’s more, battery technology has come a long way in recent years. Today's systems are more powerful, versatile, and easier to integrate with existing solar installations than those available just a few years ago. For many homeowners, adding storage is now a practical way to modernize an existing solar investment without replacing the panels or starting over.
In fact, adding battery storage may offer greater financial benefits than expanding your solar array. If your existing system already produces enough electricity but earns little for what it exports, more panels simply produce more low-value exports, and on APS a material increase in generating capacity can cost you your locked rate. A battery makes better use of what the system already generates.
There are a few important considerations to keep in mind. Battery storage isn't automatically the right financial decision for everyone. Homeowners who still benefit from favorable legacy net-metering arrangements—generally those who installed solar before September 2017 with APS or before 2015 with SRP—may find that the additional savings alone don't justify the investment, although the value of backup power may still make it worthwhile. Even for homeowners approaching the end of their grandfathering protections, the decision to add battery storage, including its size and timing, should be based on their actual electricity usage, current and future rate plans, and a realistic assessment of the potential savings.
The good news is that you have time to prepare. But with important changes approaching for both APS and SRP customers, now is the time to understand where you stand and develop a plan.
1. Identify Your Grandfathering Timeline. Your utility and the year you installed solar are good starting points:
2. Understand How the Changes Could Affect You. Not every homeowner will experience the same impact. How much solar electricity you export, when you use electricity, and your future rate plan will all influence your savings.
3. Explore Adding Battery Storage. If your grandfathering protections are approaching expiration, now is the time to consider adding battery storage to your existing solar system. By storing excess solar energy for use during more expensive evening hours, you can reduce your dependence on the grid, protect more of your solar savings, and gain valuable backup power during outages. Modern battery systems can often be integrated with existing solar installations without replacing your panels, making this a practical way to prepare for changing utility rates.
The expiration of grandfathering doesn't mean your solar investment has lost its value. Your panels can continue producing electricity for decades, but changing utility rates may affect how much you save. Adding battery storage can help protect those savings, reduce your dependence on the grid, and provide valuable backup power during outages.
Ready to Get Your Solar System Ready for Changing Utility Rates?
If your grandfathering protections or current rate plan are approaching expiration, now is the time to explore adding battery storage. Request a no-obligation quote today. Our team can help you find the right battery solution to maximize the value of your existing solar investment and ensure you're ready to get the most savings possible under Arizona's changing utility rate plans.