Are Solar Homeowners Getting a Fair Deal from SRP?
If you have solar panels on your home, SRP takes your extra power and sells it. But right now, SRP only pays you about half of what that power is actually worth on the open market.
The Short Version
If you have solar panels on your home, SRP takes your extra power and sells it. But right now, SRP only pays you about half of what that power is actually worth on the open market.
During the 2018–2019 SRP rate hearings, I pushed for a fairer standard – one based on the actual average market value of solar energy. That number is 6.1 cents per kilowatt-hour (kWh). SRP currently pays just 3.45 cents.
This isn’t a small difference. Over years of ownership, it adds up significantly for the families who invested their savings in rooftop solar.
How Does This Even Work?
Here’s what happens when your solar panels produce more electricity than your home is using at that moment:
- The extra power flows back onto SRP’s grid automatically.
- SRP uses that electricity to power other homes and businesses.
- SRP then pays you a “buyback rate” for that power.
The question is: how much should that buyback rate be?
What Was the Dispute?
In the 2018–2019 rate hearings, SRP management proposed paying homeowners based on the single cheapest solar contract SRP had ever signed – a bulk deal with a giant utility-scale solar farm.
| Why is that unfair?Huge solar farms negotiate rock-bottom prices because they deliver massive amounts of power under long-term contracts. A homeowner with rooftop panels has none of those advantages. Comparing the two is like comparing a single worker’s labor to a bulk factory discount – and only paying the worker the factory rate. |
Anything less than the median is a “tax” on the homeowner’s private investment; anything more is a cost-shift to the neighbor. By sticking to the median, we ensure a “break-even” grid that respects every ratepayer. By contrast, SRP’s current 3.45-cent export rate -barely half of that fair-market median – continues to undervalue the decentralized power you provide to your community.
The 6.1¢ Standard: Why It’s the Fair Number
I looked at all of SRP’s wholesale solar power contracts – not just the cheapest one, but every single one. The average value SRP receives for wholesale solar power is 6.1 cents per kWh.
That average is the right benchmark because it reflects what solar power is actually worth to SRP in the real market.
| Buyback Rate | Who Benefits? | Is It Fair? |
| Less than 6.1¢ (e.g., today’s 3.45¢) | SRP acquires discounted power; homeowners lose out | ❌ No – penalizes solar homeowners |
| More than 6.1¢ | Solar homeowners get a bonus paid by non-solar neighbors | ❌ No – unfair to non-solar customers |
| Exactly 6.1¢ (the fair market average) | Everyone — homeowners paid fairly, non-solar customers protected | ✅ Yes – fair to all ratepayers |
Why Does This Matter to You as a Voter?
SRP is a public power utility governed by an elected board. That means you – as a ratepayer – have a direct say in who makes these decisions.
The 2018–2019 rate case was a critical moment. I stood up publicly and alone on the SRP Board to argue for the 6.1¢ standard, knowing management would push back. I did it because protecting ratepayers sometimes means saying no to everyone else.
I took the same stand in 2015, casting the lone “no” vote against large fixed-charge increases that hurt retirees and people on fixed incomes.
| The bottom line:Rates should reflect real costs, real value, and real impacts on real people. |
Looking Ahead: Your Home as Part of the Grid
Rooftop solar doesn’t have to be treated as a problem. It can be a resource.
Imagine a smarter approach where home batteries, solar panels, and even electric vehicles work together as a “Virtual Power Plant.” During the hottest part of the day – especially from 5:00 to 9:00 p.m. – this network of home systems could help reduce the strain on SRP’s grid, avoid the need for expensive new power plants, and lower long-term costs for everyone.
That future only works if SRP treats homeowners as partners, not as discounted suppliers.
What I’m Asking For
Residential solar customers in the SRP service territory have invested in their homes. They deserve to be paid what the wholesale power is actually worth – not less, not more. Exactly fair.
That is what the 6.1¢ standard represents. And it is the kind of clear, transparent, ratepayer-first thinking I will keep fighting for on the SRP Board.
Keith Woods is a 24-year veteran of the SRP Board and CEO of KB Woods Inc. He is running for SRP Vice-President to restore common sense and transparency to the Valley’s energy and water future.
Research Notes & Sources
The following notes provide current market data (as of 2025) to contextualize the 6.1¢ fair-market standard originally proposed by Keith Woods during the 2018–2019 SRP rate hearings.
1. SRP’s Current Export Rate: 3.45¢/kWh (2025)
As of the SRP Board’s February 27, 2025 final pricing vote, the fixed residential solar export rate is 3.45 cents per kilowatt-hour – a modest increase from the prior rate of 2.8¢/kWh. Notably, SRP plans to update this rate annually rather than offering a multi-year lock, making long-term financial planning difficult for solar homeowners. Source: SRP Solar Price Plans (srpnet.com); Vote Solar / Solar Power World Online (March 2025).
2. What Arizona’s Other Major Utilities Pay Solar Customers
For direct comparison within Arizona: Arizona Public Service (APS) currently pays residential solar customers approximately 6.85¢/kWh, locked in for 10 years (with a scheduled reduction to ~6.17¢ after September 2025). Tucson Electric Power (TEP) pays 6.33¢/kWh with a 10-year rate lock. UNS Electric pays 7.55¢/kWh. SRP’s 3.45¢ rate is roughly half of what APS pays for the same type of exported solar energy. Sources: Palmetto Solar Arizona Guide (2025); Solar Topps APS Buyback Rate Guide (2025).
3. National Utility-Scale Solar Wholesale PPA Prices
Lawrence Berkeley National Laboratory’s “Utility-Scale Solar, 2024 Edition” report found that newly signed long-term utility-scale solar power purchase agreements (PPAs) averaged $35/MWh (3.5¢/kWh, levelized in 2023 dollars). This is the type of bulk, institutional-scale contract SRP has historically used to justify its low residential export rate – the very cherry-picking argument at the center of Keith Woods’ 2018–2019 position. Source: Lawrence Berkeley National Laboratory, emp.lbl.gov (2024).
4. Lazard Levelized Cost of Energy (LCOE) for Utility-Scale Solar, 2025
Lazard’s 2025 LCOE+ report puts the levelized cost of generating utility-scale solar power between $38–$78/MWh (3.8¢–7.8¢/kWh), with an average of approximately $58/MWh (5.8¢/kWh). This represents the true cost of producing new solar energy – not the floor price of the cheapest bulk contract. The 6.1¢ standard proposed by Keith Woods in 2018–2019 aligns closely with Lazard’s 2025 midpoint estimate, suggesting the benchmark remains well-grounded. Source: Lazard LCOE+ Version 18, June 2025.
5. “Value of Solar” Studies: What Rooftop Solar Is Actually Worth
Independent “Value of Solar” studies – which attempt to calculate the full benefit rooftop solar provides to the grid, including avoided transmission costs, peak demand reduction, and environmental value – consistently find values well above SRP’s current export rate. A review of available studies cited in 12News (February 2025) found that half of all studies place the value of rooftop solar between 8¢ and 20¢/kWh, and none placed the value below 5¢/kWh. SRP’s own commissioned study is disputed by advocates including Vote Solar, who argue it undercounts grid benefits and overstates cost-shifting. Source: 12News Arizona (February 2025).
| Summary: How the Numbers Compare in 2025BenchmarkRate (¢/kWh)SourceSRP export rate (2025)3.45¢SRP.netUtility-scale solar PPA avg. (LBNL)~3.5¢LBNL 2024Lazard LCOE avg., utility-scale (2025)~5.8¢Lazard 2025Keith Woods’ 6.1¢ fair-market standard (2019)6.1¢SRP Rate HearingAPS residential export rate (2025)~6.85¢APS / Solar ToppsTEP residential export rate (2025)6.33¢TEP / PalmettoValue-of-solar studies midpoint8–20¢12News AZ (2025) |
