With its abundant sunshine and clear skies, Prescott is an ideal location for generating solar power. However, the financial benefits in 2026 depend entirely on understanding how Arizona Public Service (APS) compensates you for surplus energy. The days of simple 1-for-1 credits are gone, and a modern solar system is designed to maximize what you use at home, not what you send back to the grid.
Installing solar is not only about today's bill. If grid electricity from APS becomes more expensive over time, your rooftop generation can offset costlier power in future years, making your investment more valuable down the road.
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2026 Solar & Battery Costs in Prescott
For a typical home in Prescott, a 6.2 kW solar system is sized to offset the average electricity bill. The estimated gross cost for this system is $13,950. After applying Arizona's state tax credit, the net cost comes down to approximately $12,950.
To maximize your solar energy usage, adding a 10 kWh battery is recommended. A combined solar-plus-battery system has an estimated gross cost of $28,950, or $27,950 after the state credit. While the upfront cost is higher, a battery allows you to store solar energy for use at night, reducing your reliance on the grid when the sun isn't shining.
Incentives & Tax Credits
Arizona's Solar Incentives for 2026
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 reduce the overall cost and improve your return on investment:
- State Tax Credit: Arizona provides a personal tax credit of 25% of the system's cost, capped at a lifetime maximum of $1,000.
- Sales Tax Exemption: You won't pay state sales tax on the purchase of your solar equipment, which provides significant savings on the upfront cost.
- Property Tax Exemption: Installing a solar energy system increases your home's value, but it won't increase your property taxes. An owned solar system can also be an attractive feature for potential buyers, supporting your home's resale appeal.
Net Metering: Arizona Public Service Co
APS Reduced Compensation
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Understanding APS Export Rates (Net Billing)
Under the current APS net billing program, any excess solar energy you send to the grid is credited at a discounted rate—not the full retail price. For 2026, this export compensation is modeled at approximately 6.2 cents per kWh. Since you pay APS around 15.6 cents per kWh for electricity, it's far more valuable to use your solar power yourself or store it in a battery than to sell it back to the utility for less than half the price. This value gap is why energy storage is now a central part of the solar conversation in Prescott.
Projected Savings
How Solar Saves You Money with APS
Your primary savings come from 'self-consumption'—using the solar power your panels generate directly in your home. This avoids buying expensive electricity from APS, currently priced around 15.6 cents per kWh.
- A 6.2 kW solar-only system is modeled to save an estimated $1,004 per year, leading to a payback period of about 11.8 years.
- Adding a 10 kWh battery increases self-consumption by storing excess daytime energy for evening use. This boosts annual savings to an estimated $1,256. The higher initial investment results in a longer payback period of around 16.2 years, but provides greater energy independence and higher monthly bill reduction.
These figures are based on current rates and are modeled estimates. Actual savings will vary based on your household's energy usage patterns.