High summer electricity bills from Arizona Public Service (APS) are a familiar challenge in Sun City. While Arizona's abundant sunshine makes solar a natural fit, the rules for getting paid for surplus energy have changed. In 2026, simply sending extra power to the grid isn't the most valuable strategy. The key to maximizing savings is using as much of your own solar power as possible, which is where adding a battery comes into play.
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2026 Solar & Battery Pricing in Sun City
Here are modeled cost estimates for a typical 8.3 kW system designed to offset a standard home electricity bill. Keep in mind these figures are before any state incentives.
- Solar Panels Only: A standard 8.3 kW system has a gross cost of approximately $18,675. After applying Arizona's $1,000 state tax credit, the net cost is around $17,675.
- Solar Panels + 10 kWh Battery: Adding a battery for energy storage brings the gross cost to $33,675. The same state credit applies, resulting in a net cost of about $32,675.
These costs benefit from Arizona's sales tax exemption on solar equipment, which helps lower the initial investment. An owned solar system can also be a useful long-term home-value feature, adding appeal for future buyers.
Incentives & Tax Credits
Arizona's 2026 Solar Incentives
While the 30% federal tax credit for homeowners is no longer available for systems installed in 2026, Arizona offers several valuable state-level incentives that help make solar affordable:
- State Income Tax Credit: Arizona provides a personal tax credit of 25% of the system's cost, capped at a lifetime maximum of $1,000. This directly reduces your state tax liability.
- Sales Tax Exemption: You will not pay state sales tax on the purchase of your solar equipment, which saves hundreds of dollars on the upfront cost.
- Property Tax Exemption: The value added to your home by an owned solar panel system is exempt from property taxes. Your home's value may increase, but your property tax bill won't because of the panels.
Net Metering: Arizona Public Service Co
APS Reduced Compensation
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Understanding Export Rates with APS
Under the current APS net billing structure, the electricity you buy from the grid costs significantly more than the credit you receive for the solar energy you export. For example, you might pay around 15.6 cents per kilowatt-hour (kWh) for electricity, but only receive a credit of about 6.2 cents per kWh for your exported solar power.
This difference is why a battery is now strongly recommended. Storing your excess solar energy in a battery allows you to use it later, avoiding the need to buy expensive power from the grid in the evening. It transforms your extra solar power from a low-value export into a high-value replacement for grid electricity.
Projected Savings
How Solar Creates Value on Your APS Bill
With APS, the greatest savings come from using your solar power directly in your home. This is called self-consumption. When your panels generate more electricity than you need, the excess is sent to the grid, but the credit you receive is lower than the price you pay for electricity from APS.
- The modeled Solar Only system is estimated to save around $1,443 annually, with a payback period of about 11.3 years.
- The Solar + Battery system increases self-consumption significantly. By storing excess daytime energy for use at night, it boosts estimated annual savings to $1,910. While the initial cost is higher, leading to a payback period of around 13.4 years, it provides greater energy independence and higher long-term savings.
Protecting your budget from future utility rate increases is another key benefit. If grid electricity from APS becomes more expensive over time, the value of your rooftop-generated power naturally grows.