TEP Net Billing in Tucson: Solar Export Rates Explained (2026)

Tucson Electric Power (TEP) serves the Tucson metro area and surrounding communities — Oro Valley, Marana, Sahuarita, and parts of Green Valley. If you're a TEP customer considering solar, the export credit structure matters enormously to your savings calculation, and TEP's rate is the lowest of the three major Arizona utilities.

This guide covers TEP's current net billing structure, which rate plans work best for solar, and strategies to maximize savings given TEP's specific rate design. For a broader view of all Arizona solar incentives, see our complete Arizona solar incentives guide. For Tucson-specific pricing, see our Tucson solar cost guide.

TEP Territory: Are You a TEP Customer?

TEP serves most of Tucson, including:

• Central and south Tucson
• Oro Valley and Marana (northern suburbs)
• Sahuarita and Green Valley (south)
• Parts of Vail and Rincon Valley (east)

Some Tucson-area homes are served by other utilities including Trico Electric Cooperative (rural areas) or UNS Electric. Check your utility bill to confirm TEP is your provider.

TEP's Solar Export Rate (Net Billing)

TEP moved from true net metering to a net billing model following Arizona Corporation Commission (ACC) decisions. Under the current structure:

• Export credit rate: Approximately $0.057/kWh for electricity sent to the TEP grid
• Retail rate: Approximately $0.13/kWh for electricity you draw from TEP
• Gap: You earn about 44 cents for every dollar's worth of electricity you export — making self-consumption the primary value driver

TEP's retail rate is lower than APS's ($0.13 vs. $0.15), which reduces total savings per kWh self-consumed. However, Tucson's excellent solar resource (similar sun hours to Phoenix) helps offset this with strong production.

Key implication for Tucson homeowners: Because TEP's export rate is low, oversizing your solar system is particularly costly — extra production exported at $0.057/kWh earns very little. Size precisely for your actual consumption.

TEP Rate Plans for Solar Customers

Standard Residential Rate (ET-1)

TEP's basic residential rate with tiered usage and a time-of-use component. Solar customers on this plan benefit from reduced consumption during daylight hours. This is the most common plan for TEP solar customers and generally works well if you have minimal on-peak evening loads.

Time-of-Use Rate (TOU)

TEP offers a time-of-use option where electricity prices vary by time of day. On-peak hours (typically late afternoon and evening) are more expensive, while off-peak hours (overnight, morning) are cheaper. Solar production during the afternoon helps, but Tucson's on-peak window often extends into the early evening when production is declining.

Demand Charge Plans

Like APS's Saver Choice Max, TEP has demand charge options where your bill includes a charge based on your peak 15-minute power draw. These can be problematic without a battery — a brief demand spike during on-peak hours adds cost that solar doesn't directly offset.

System Sizing Strategy for TEP Customers

Given TEP's low export rate, the optimal sizing strategy is clear:

• Size for 85–95% of annual consumption: Don't chase 100%+ offset — the export value doesn't justify overbuilding
• Annual offset, not monthly: Solar produces much more in summer (Tucson's peak sun months) than winter — sizing for annual balance means winter grid imports and summer exports, which is fine
• Battery consideration: A battery lets you shift midday summer surplus to evening, boosting self-consumption and avoiding low-value exports
• West-facing panels: Can extend afternoon production into the higher-value early on-peak hours

TEP Interconnection Process

Before your TEP solar system can be activated, your installer must complete TEP's interconnection application:

1. Installer submits interconnection application to TEP
2. TEP reviews the application (technical review, grid capacity check)
3. TEP issues approval — typically 4–8 weeks
4. City of Tucson or Pima County inspection of completed installation
5. TEP final review and Permission to Operate (PTO)
6. TEP installs bi-directional meter (at no cost to you)

TEP's Solar Incentive Programs

TEP has offered various incentive programs over the years. Current programs are limited compared to what was available in earlier years, but TEP does participate in:

• Residential Energy Efficiency Programs: Rebates for energy efficiency upgrades that reduce baseline consumption before solar is added
• EV Charging Programs: Special rates for EV charging that complement solar self-consumption
• Green Power Program: Not a solar incentive, but relevant for understanding TEP's renewable energy portfolio

Always check TEP's current program offerings directly at tep.com, as programs change. The federal ITC (30%) and Arizona state solar tax credit ($1,000) are available to all TEP customers regardless of what TEP programs are active.

How to Maximize Solar Savings on TEP

1. Size precisely: Get 12 months of your actual TEP usage data from TEP's online portal before getting quotes
2. Self-consume more: Run dishwasher, laundry, pool pump, and EV charging during peak solar production hours (10 AM–2 PM)
3. Consider a battery: Shifts midday surplus to evening, avoiding low-value TEP exports
4. Choose the right rate plan: Ask your installer to model your specific usage on each TEP rate option
5. Monitor your system: Use your inverter's monitoring app to track production and consumption daily