Net Metering in Phoenix: Unleashing Your Solar Power

By Rob Madden

APS, Energy Independence, green energy, Home Electricity, net metering, Phoenix, Phoenix AZ, Photovoltaic Panels, renewable energy, Residential Solar, solar 101, solar basics, SRP, Sustainable Living, utility rate plan

Net metering in Phoenix

In the city of Phoenix, Arizona, sunshine is an abundant resource. For homeowners and businesses alike, harnessing this resource via solar panels has become an increasingly popular way to reduce electricity costs and contribute to environmental sustainability. Central to the effectiveness of this approach is the principle of net metering, a system that allows solar energy users to feed unused electricity back into the grid and receive credit. This essay explores the workings of net metering in Phoenix and highlights the roles of two significant utility companies, Salt River Project (SRP) and Arizona Public Service (APS).

Net Metering in Phoenix: The Basics

Net metering is an electricity policy for consumers who generate some or all of their own electricity, primarily through solar power. Essentially, net metering involves a two-way relationship between the solar energy producer (a homeowner or business) and the utility company. When a solar system generates more electricity than is used, the excess power is fed back into the grid. In return, the customer receives a credit from the utility company, reducing their electricity bill.

The mechanics of net metering are quite simple. Solar panels are connected to the public-utility power grid via an electrical meter. This meter is designed to spin forwards when electricity is drawn from the grid and backwards when excess power is generated by the solar panels. Thus, ‘net metering’ refers to the method of billing the customer only for the ‘net’ energy used – that is, the difference between the energy consumed and the energy generated.

Additionally, net metering allows the home owner to generate an excess of electricity during low demand months, such as January, February, and March. With the excess of credits, the home owner is able to offset their electrical usage during higher demand months and in some cases eliminating or offsetting a good portion of their utility bill even when the AC is in constant use during the summer.

Net Metering in Phoenix: Utility Companies

Phoenix is served mainly by two utility companies – SRP and APS. Both companies have different policies regarding net metering, which can impact the decision to install solar panels.

APS, Arizona’s largest and longest-serving electric utility, provides net metering to its customers who are grandfathered in to older rate structures. Homeowners and businesses with solar installations can send their unused power back to the grid in exchange for credits on their electricity bill. The APS net metering program effectively allows solar users to lower their energy costs significantly. New solar installations do not have net metering available to them as of the writing of this article.

On the other hand, SRP, which serves a large portion of the Phoenix metropolitan area, has a different policy. In 2015, SRP moved away from traditional net metering and introduced a demand-based price plan. In this plan, the price of electricity varies based on the time of day and overall demand. While solar users can still export excess energy to the grid, the credits received are lower compared to traditional net metering. Furthermore, SRP customers with solar installations are subject to a ‘demand charge,’ calculated based on the 30-minute period of highest energy use during peak hours in a billing cycle.

Financial Benefits of Net Metering

Both APS and SRP offer incentives for solar power, but it’s important for customers to understand these key differences when considering installing solar panels. Despite SRP’s demand-based pricing, many Phoenix residents find solar power to be a cost-effective solution, given the city’s ample sunlight. However, APS customers may see greater savings through traditional net metering.

Other Benefits to Net Metering

In addition to the financial benefits, net metering also promotes renewable energy and sustainability. By making solar installations more economically viable, net metering encourages more households and businesses to invest in solar energy. This reduces reliance on fossil fuels, decreases greenhouse gas emissions, and supports the transition towards a more sustainable energy future.

Net Metering Challenges

However, net metering isn’t without its challenges. Some critics argue that it shifts the costs of grid maintenance from solar users to those without solar installations. Utility companies also express concerns about lost revenue as more consumers generate their own power. Nevertheless, net metering continues to play a crucial role in promoting solar energy adoption.

In conclusion, understanding how net metering works is critical for Phoenix residents looking to capitalize on the city’s abundant sunshine. While net metering policies vary between SRP and APS, the overall benefit of reduced energy costs and increased sustainability is clear. As technology advances and public policy evolves, net metering will continue to be a cornerstone of solar energy strategy, supporting the growth of renewable energy and a more sustainable future in Phoenix and beyond.

Rob Madden

About the author

Rob Madden is an experienced real estate broker in the Phoenix metro area, having worked in the industry for over 28 years. He has helped many home buyers and sellers navigate the local real estate market, and is considered a trusted expert in the field. Rob is committed to making the buying or selling process as seamless and straightforward as possible for his clients, and provides hands-on assistance at every stage of the transaction. In his free time, Rob enjoys being a Scoutmaster for a local Scouts BSA troop, hiking, backpacking, photography, and playing pinball.

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