Arizona offers several incentives to make the change to solar energy as cost-effective as possible. One of the incentives that has caused quite a bit of confusion, but is important to understand, is commonly referred to as Arizona’s net metering, or net billing, system.
What is net metering, or net billing? How does this incentive system encourage installing solar panels as soon as possible? What changes could make investing in solar now an even better investment for the future? This article will tell you everything you need to know about Arizona net metering rules.
What is Net Metering?
Net metering is, by definition, the structure provided by a utility company to buy back the excess solar energy generated by homeowners at full retail price. This is a highly beneficial incentive to install solar panels, as it ensures that you are fully compensated for your investment, either by the power you use or by the full-retail price of your excess energy.
Arizona’s Net Billing Policy
Since 2016, Arizona does not offer a true net metering system but instead incentivizes solar panel installation through a program more aptly called a net billing program.
The key difference is that instead of homeowners being compensated for the entire retail price for the energy they send back into the electric grid, they receive only a portion of the retail value for the excess kilowatts of energy they produce. The exact amount offered by the utility company varies throughout the state.
Even though Arizona’s net billing system does not compensate homeowners for the entire value of their excess energy production, the buy-back system is still a convenient way to offset energy costs even further than simply using solar panels alone.
The exact amount offered per kilowatt returned to the power grid can vary between utility companies, but is generally between 70% to 95% of the retail price.
Why You Should Consider Installing Solar Panels Right Now
One important aspect of Arizona’s net billing policy is that it allows utility companies to lower the buy-back rate every year. However, the idea is to incentivize installing solar panels sooner rather than later.
How does this work? The utility companies are required to offer the opportunity to lock in the utility companies’ purchase back rate for 10 years after the installation. This means that someone who installs solar panels this year can lock in the utility company to credit them at the current rate, no matter what the company chooses to offer homeowners who wait another year to install their solar panels.
Because the price per kilowatt bought back will go down every year, you can save substantially over time by installing solar panels now. You will save not only from the energy you use but also by receiving more per kilowatt you sell back to the utility company by locking into the higher rates now.
Go Solar Sooner Rather Than Later
Arizona’s net metering or more accurately net billing, the system creates an opportunity for you to save more by choosing to make the change to solar energy sooner rather than later. You will be compensated for the extra energy you produce, and you will be part of the sustainable future we need to be working towards now.
Learn how to get started with solar power by speaking with one of our Energy Consultants. Contact Solar Optimum today!