Time-of-Use (TOU) & Net Metering Explained

🔋 How TOU Utility Rates Work in Arizona

Arizona utilities generally structure electricity rates to vary by time of day and season. For example, APS divides the year into summer (May–October) and winter (November–April), with distinct on-peak, off-peak, and (winter-only) super off-peak time windows. On-peak (e.g., Mon–Fri 4–7 PM) carries the highest rate, off-peak (weekends and holidays) is mid-tier, and super off-peak (e.g., winter midday) is the lowest.

SRP and other providers follow similar TOU schedules: SRP’s Time-of-Use Export Plan has on-peak (highest), off-peak (moderate), and super off-peak (lowest, often for EV charging late at night) periods.

TOU pricing means shifting energy consumption (like running washers, EV charging, or HVAC pre-cooling) to off-peak hours can dramatically reduce costs.

🌞 Understanding Net Metering vs. Net Billing

Arizona no longer offers standard net metering (1:1 retail credit) on new solar systems. Instead, utilities use a net billing approach, crediting exported solar energy at a reduced avoided cost or wholesale rate—typically 30–50% lower than retail electricity rates.

Key distinctions:

• Net metering (legacy): 1 kWh sent = 1 kWh credit at full retail rate.
• Net billing (current): Exported kWh earn a lower, fixed credit (e.g. APS ~6–8 ¢/kWh vs. retail ~12–22 ¢/kWh) .

Some customers on SRP maintain limited net metering via grandfathered demand-based plans (E-27, E-15), but these are being phased out by late 2025.

💡 Tips to Maximize ROI with TOU + Net Billing

1. Maximize on-site solar usage
   Consume solar energy as it's produced to offset full retail prices—especially during on-peak.
2. Shift high-usage appliances
   Run dishwashers, EV chargers, pool pumps, etc., during off- or super off-peak windows (e.g., late night to early AM).
3. Leverage battery storage
   Store midday solar output for use during peak evening hours when rates are highest and export credits are low.
4. Pre-cool or pre-heat
   For example, set your AC lower around noon so your home stays comfortable through afternoon peaks—using solar power rather than grid energy.
5. Pick the best rate plan
   Evaluate utility-specific offerings:
   • APS: purely net billing.
   • SRP: choose between net metering via demand-based plans or TOU Export with lower export credits.
   • TEP: net billing with reduced credits, battery storage is critical.
6. Watch for policy changes
   Export rates have recently been trending lower—Arizona’s ACC is exploring further reductions, making on-site consumption and batteries even more essential.

By understanding your utility’s TOU windows and export-credit policy—and aligning solar production, storage, and usage accordingly—you can dramatically improve ROI. Advanced Electric & Solar can help Arizona homeowners with tailored system design, advice on rate-plan selection, and smart battery integration to ensure you’re minimizing grid reliance and maximizing savings.