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Incentives/Policies for Renewables & Efficiency

Printable Version
Net Metering   

Last DSIRE Review: 10/20/2014
Program Overview:
State: Arizona
Incentive Type: Net Metering
Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Municipal Solid Waste, CHP/Cogeneration, Hydrogen, Biogas, Anaerobic Digestion, Small Hydroelectric, Fuel Cells using Renewable Fuels
Applicable Sectors: Commercial, Industrial, Residential, Nonprofit, Schools, Local Government, State Government, Institutional
Applicable Utilities:Investor-owned utilities, electric cooperatives
System Capacity Limit:No capacity limit specified, but system must be sized to meet part or all of customer’s electric load and may not exceed 125% of customer’s total connected load
Aggregate Capacity Limit:No limit specified
Net Excess Generation:Credited to customer's next bill at retail rate; excess reconciled annually at avoided-cost rate
REC Ownership:Not addressed in net metering rules; customer owns RECs unless participating in a utility incentive
Meter Aggregation:Not addressed
Authority 1:
Date Enacted:
Date Effective:
ACC R14-2-2301 et seq.
Authority 2:
Date Enacted:
Date Effective:
ACC Decision 74202

Net metering is available to electric utility customers who generate electricity using solar, wind, hydroelectric, geothermal, biomass, biogas, combined heat and power (CHP) or fuel cell technologies.* The Arizona Corporation Commission (ACC) has not set a firm kilowatt (kW)-based limit on system size capacity; instead, systems must be sized to not exceed 125% of the customer’s total connected load. If there is no available load data for the customer, the generating system may not exceed the customer’s electric service drop capacity. Additionally, the ACC has not set an aggregate capacity limit for all net-metered systems in a utility’s territory. The utility must instead demonstrate to the ACC why such a cap should be allowed.

The ACC requires that net metering charges be assessed on a non-discriminatory basis. Any new or additional charges that would increase an eligible customer-generator's costs beyond those of other customers in the rate class to which the eligible customer-generator would otherwise be assigned must be proposed to the ACC for consideration and approval. In December 2013, in response to an application from the Arizona Public Service Company (APS) to address cost shifting, the ACC ordered a $0.70 per kW charge for all residential distributed generation systems installed on or after January 1, 2014.** This charge to recover lost fixed cost revenues will remain in effect until reviewed in the next APS rate case. The charge does not apply to customers with systems installed by December 31, 2013. APS is required to file quarterly reports with the number of new distributed generation installations per month, the size of those installations in kW, and the revenue collected from customers through the interim lost fixed cost revenue charge. ACC's decision may be found here

Net metering is accomplished using a single bi-directional meter. Any customer net excess generation (NEG) will be carried over to the customer's next bill at the utility's retail rate, as a kilowatt-hour (kWh) credit. Any NEG remaining at the customer’s last monthly bill in the annual true-up period will be paid to the customer, via check or billing credit, at the utility’s avoided cost payment.

For customers taking service under a time-of-use rate, off-peak generation will be credited against off-peak consumption, and on-peak generation will be credited against on-peak consumption. The customer’s monthly bill is based on the net on-peak kWh and net off-peak kWh amounts. Any monthly customer NEG will be carried over to the customer's next bill as an off-peak or on-peak kWh credit.

Under the ACC rules, each utility must file an annual report listing the net metered facilities and their installed capacity for the previous calendar year. 

*SRP and municipal utilities do not fall under the jurisdiction of the ACC, and therefore are not subject to the state rules.

**The charge applies specifically to "distributed generation" systems, not "net metered systems". However, as net metering only applies to systems located on the customer's premises, the charge applies will affect net metering customers. The charge only applies to APS customers. 

  Barbara Keene
Arizona Corporation Commission
1200 W. Washington St.
Phoenix, AZ 85007
Phone: (602) 542-0853
Fax: (602) 364-2270
Web Site:
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2014 - 2015 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.