Arizona has one of the most thriving solar energy infrastructure in the entire nation. Sustainable energy consumption, especially solar, is a greener way to lead a lifestyle. Various government-backed tax credits and Arizona specific returns can help you make the switch.

If you have recently made a move to solar or planning to adopt a solar energy system, you need to know about policies regarding net metering in Arizona. Net metering is a crucial factor that influences the solar adoption rate and recently, the state of Arizona has made some changes in its net metering policy.

What is net metering?

Solar systems are connected with the electric grid for a smooth, hassle-free transfer of energy between your home and the grid. Known as interconnection, this transfer is a two-way street, leading to the concept of net metering. If your solar system produces more electricity than you can consume in a month, you will get a bill credit that you can use in the next month. The process of compensating the resident for excess production of energy is called net metering. Usually, retail net metering counts the value of both produced energy and grid energy equally.

Net metering policies depend on the states, utilities, and nature of properties. Some states use different types of net metering to credit the owners. These are:

Aggregate net metering

Aggregate net metering allows a solar owner with multiple meters to credit the surplus amount from one meter to another. This is particularly useful when a property has multiple buildings with multiple meters but the sun shines on a building that doesn’t need much electricity. Through this policy, owners can transfer the credit to balance their electric consumption in the more demanding buildings. Aggregate net metering is often called Agricultural net metering since farm owners more often than not take advantage of this policy.

Virtual net metering

Virtual net metering is particularly helpful for a community-driven solar network. Community subscribers can receive a bill credit based on the energy production of a solar project within the community.

Net metering is an enticing policy to make people invest in solar energy. For a long time, Arizona promoted net metering for a smooth adoption of solar but that’s not the case anymore.

Net metering in Arizona

Net metering in Arizona has gone through drastic changes with the utilities tweaking how much solar residents should get in return. As a result, net metering has gradually become obsolete in most parts of Arizona. Under the changes, your electricity bill will depend on solar export rates and a few other factors.

Rooftop solar customers who joined the program before the revised policies came into place may still enjoy the original rates.

Solar export rate

The solar export rate dictates how much you should be credited for exporting electricity to the grid. Utilities in Arizona create their own solar export rate for their customers. Solar export rates are much lower than net metering in Arizona and it’s set to go even lower. Every year, we can see up to a 10% decrease in solar export rate, making this year the best time to go solar.

Factors in your electric bill

A clear understanding of the various elements of your electric bill will help you control your usage. Utilities in Arizona factor in volumetric charges, fixed charges, demand, and time-based charges.

Volumetric charges keep a record of your actual energy consumption. Fixed charges are the basic service charges that utilities demand even before you start consuming. Fixed charges have seen an increase in recent times to minimize how much you can save on volumetric charges by using a solar system. By lowering volumetric charges, utilities also get to pay you less in credit.

Demand charges control the maximum energy you can consume at a given time while the time-of-use charges dictate the rates during peak hours (afternoon to evening).

By keeping in mind all these factors, you can have a better idea of how much energy you should draw from your utility and how much solar energy can help you offset the electric bill.