Massive summer air conditioning bills are a fact of life here, especially with views of the Rincon Mountains trapping the heat. While solar seems like a clear solution, a major policy shift from Tucson Electric Power (TEP) has changed the equation. Simply installing panels isn't enough to maximize savings anymore; you need to understand how net billing works first.
Benchmark Cost Analysis
How Much Does a Solar + Battery System Cost in Tanque Verde?
For a typical home, a solar and battery storage system has a gross cost of roughly $23,500. After applying the available state and federal tax credits, the net investment drops to approximately $15,450. While a panels-only setup is cheaper upfront (around $7,050 net), its poor performance under TEP's net billing makes the solar-plus-battery package the financially smarter choice for long-term savings and energy independence.
Incentives & Tax Credits
Arizona Solar Incentives for 2026
Your total system cost is significantly reduced by key incentives. First is the 30% Federal Solar Tax Credit, which is worth $7,050 on a $23,500 system. Arizona adds a state tax credit of up to $1,000. Finally, Arizona law provides both a sales tax exemption and a property tax exemption, so your installation is tax-free and won't increase your property tax bill.
Net Metering: Tucson Electric Power (TEP)
Net Billing (2024)
Critical 🔋
Understanding TEP's Net Billing in 2026
TEP's current "Net Billing" policy means you're paid a very low rate (around $0.07/kWh) for any excess solar power you send back to the grid. This is far less than the retail rate (around $0.135/kWh) you pay to pull power from them after the sun goes down. A solar-only system gives away valuable energy for pennies. The modern solution is to pair your solar panels with a home battery, allowing you to store that excess daytime power and use it yourself during expensive evening hours, effectively bypassing TEP's low export rates.
Projected Savings
Solar Savings: Why a Battery Makes the Difference
A solar-only system in Tanque Verde might save you around $644 annually, as much of your production gets exported for low credit. However, by adding a battery, you can store and use your own energy when electricity is most expensive. This strategic self-consumption pushes your estimated annual savings up to $908, a 40% increase that makes the investment far more effective against TEP's rate structure.