Tucson Electric Power (TEP): how it credits the solar power you send to the grid
5.1 cents per kWh for applications from October 1, 2025, locked for 10 years.
Checked November 12, 2026. Utilities change these rules; check the current tariff before you sign.
How it works
Tucson Electric Power (TEP) credits exported power at 5.1 cents per kWh, about 33% of Arizona's average electricity price.
Like APS, TEP credits all exported power at a fixed rate under Arizona's net billing rules, and resets the rate for new applicants once a year, on October 1.
At about 5 cents, a kWh you export earns a fraction of what a kWh you avoid buying saves.
The 10-year lock protects you from later cuts but not from TEP raising its retail prices or fixed charges.
Tip: Ask the installer which year's export rate their savings estimate uses.
What it means for a typical Arizona home
An average Arizona home uses about 12,360 kWh a year. A 6.5 kW system costs about $16,705 at the 2026 median price and makes about 11,408 kWh in its first year, of which we assume about 6,845 kWh goes out to the grid because no one is home to use it.
| First-year savings | Payback | 25-year savings, after the price | |
|---|---|---|---|
| With Tucson Electric Power (TEP)'s credit | $1,045 | 16 years | $14,101 |
| If every exported kWh earned the full price | $1,741 | 9 years | $36,340 |
The difference, about $22,238 over 25 years, is what Tucson Electric Power (TEP)'s rules cost a typical system compared with full net metering. Using more of the power at home, while the sun is up, closes some of that gap. Uses Arizona's average electricity price; Tucson Electric Power (TEP)'s own prices may be higher or lower. Paid in cash, no federal credit, prices rising 2.5% a year, one inverter replacement.
Also in Arizona: Arizona Public Service (APS) (6.17¢), Salt River Project (SRP) (3.45¢).
All 55 utilities · Solar in Arizona · Lease and PPA terms by company
Sources: Palmetto: Arizona utility guide; U.S. Energy Information Administration (EIA), final 2025 data: Annual State Historical Spreadsheets (Form EIA-861, released October 7, 2026) and Electric Power Annual (October 21, 2026); EnergySage: median quoted price, first half of 2026.