Going Solar in Encanto? Understand APS Rules First.
For homeowners in the Encanto area of Phoenix, the intense Arizona sun seems like a perfect match for rooftop solar. While the solar production is excellent, how you get paid for surplus energy has changed. Under the current Arizona Public Service (APS) rules, the electricity you send to the grid is credited at a rate much lower than the retail price you pay. This shift makes understanding your system design—especially whether to include a battery—more important than ever for controlling your energy costs in 2026.
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2026 Solar & Battery Costs in Encanto
Here are modeled cost estimates for an average-sized home in the Encanto area, reflecting pricing after the end of the default federal tax credit. The net cost includes Arizona's state-level benefits.
- Solar-Only System (8.5 kW): The estimated gross cost is $19,125. After applying the $1,000 Arizona state tax credit, the net cost comes to approximately $18,125.
- Solar + Battery System (8.5 kW panels, 10 kWh battery): This system has an estimated gross cost of $34,125. The same $1,000 state credit brings the net cost to around $33,125. This configuration is designed to maximize self-consumption by storing solar energy for evening use.
These figures are modeled estimates. Your actual costs will depend on your home's specific needs and equipment choices.
Incentives & Tax Credits
Arizona's 2026 Solar Incentives
While the 30% federal residential solar tax credit is no longer available for systems installed in 2026, Arizona still offers valuable state-level support that makes going solar financially attractive.
- State Tax Credit: Arizona provides a personal income tax credit of 25% of the system's cost, capped at a lifetime maximum of $1,000. This is a direct reduction of your state tax liability.
- Property Tax Exemption: An owned solar system adds value to your home, but thanks to a state exemption, your property taxes will not increase as a result of installing panels. This is a significant long-term benefit.
- Sales Tax Exemption: You will not pay state sales tax on the purchase of major solar equipment, reducing the upfront cost of your system.
Net Metering: Arizona Public Service Co
APS Reduced Compensation
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How APS Export Rates Affect Your Solar Savings
Arizona Public Service (APS) operates under a net billing program, which is different from older net metering policies. In simple terms, you buy electricity from APS at the full retail rate (around $0.16 per kWh), but when your solar panels produce more energy than you can use, the excess power sent to the grid is credited at a much lower export rate (modeled here at about $0.06 per kWh).
This price difference is why a battery is strongly recommended. By storing your excess solar power in a battery during the day, you can use it at night instead of selling it to APS for a low credit and then buying expensive electricity back just a few hours later. This strategy, known as self-consumption, keeps more of the value your panels generate within your home.
Projected Savings
Modeled Electricity Bill Savings
A solar system's value comes from offsetting expensive grid power. With lower export credits from APS, using your own solar power directly provides the most savings. A battery helps you do more of that.
- A solar-only system is projected to save an Encanto homeowner around $1,443 annually, leading to a payback period of about 11.5 years.
- Adding a battery increases the system's ability to offset peak-hour grid purchases, boosting annual savings to $1,910. While the initial investment is higher, resulting in a 13.5-year payback, it provides greater bill control and backup power during outages.
If grid electricity from APS becomes more expensive over time, the value of your rooftop generation increases, potentially shortening the payback period and improving your long-term return on investment.