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TEP Rates: Electric and Solar Buyback Insights for 2024 in Tucson

TEP electric Rates


In an era marked by increasing energy costs and economic inflation, understanding Tucson Electric Power's (TEP) rates is more crucial than ever for residents of Tucson, Arizona. This comprehensive guide delves into TEP's current pricing structures, discusses the contentious changes in solar buyback rates, and forecasts the future trends in energy costs. It serves as an essential resource for anyone looking to make informed decisions about their energy usage and how to best manage their energy expenditures amidst rising costs.

TEP Electric Rates: A Detailed Overview

TEP's rate structures are designed to meet the diverse needs of its customers through various pricing plans, including a tiered system that impacts monthly bills based on energy consumption levels.

Current Electric Rates

  • First Tier: Applies to the first 500 kWh per month, encouraging moderate energy use.

  • Second Tier: Rates increase between 501 kWh and 1,000 kWh, incentivizing energy conservation.

  • Third Tier: Consumption above 1,000 kWh is priced at the highest rate, aimed at reducing excessive energy use.

Rate Trends

Currently, Tucson residents face an average rate of 19 cents per kWh, significantly above the Arizona state average of 15.55 cents per kWh. This disparity is influenced by local economic and infrastructural factors that drive up costs. In 2024, the average monthly electric bill for residents in Tucson, AZ, is approximately $225. This translates to an annual electricity cost of $2,700. Here’s a detailed breakdown of the figures:

  • Monthly Electricity Usage: The average electricity consumption for a typical Tucson household is about 1,175 kilowatt-hours (kWh) per month.

  • Annual Electricity Usage: Over the course of a year, this amounts to approximately 14,100 kWh.

  • Comparison with National Average: The average annual electric bill in Tucson is 24% higher than the national average, which stands at $2,179.

Future Trends in Electricity Rates

Forecasting the next five years, Tucson's energy consumers are likely to encounter increasing rates due to several factors:

  • Inflation: As general inflation continues, it exerts upward pressure on energy prices.

  • Infrastructure Investments: Upgrades to grid infrastructure may lead to higher costs being passed down to consumers.

  • Environmental Regulations: Stricter regulations designed to curb emissions may increase production costs for energy providers.

Predictive Cost Analysis

By 2024, average residential rates could rise by an estimated 3-5% annually, influenced by these macroeconomic and sector-specific dynamics.

TEP Solar Buyback Rates and the Shift in Solar Energy Economics

The economics of solar energy in Tucson are currently at a turning point due to adjustments in TEP's solar buyback rates.

Current Challenges in Solar Buyback

  • Reduced Buyback Rates: TEP has adjusted its buyback rates for surplus solar energy to as low as $0.06 per kWh, significantly impacting the return on investment for solar users.

Strategies for Maximizing Solar Benefits

  • Oversizing Systems: Installing solar systems that offset up to 130% of a household's energy consumption can maximize financial returns under the new rate structures.

  • Choosing the Right Vendor: Companies like SunPower by Nova offer competitive rates for solar installations, ranging from $2.25 to $2.40 per watt, providing cost-effective solutions for residents.

The Broader Impact of Rising Energy Costs in Tucson

The increase in energy rates is just one aspect of the broader economic challenges facing Tucson residents:

  • Overall Living Costs: Alongside rising energy costs, Tucsonans are grappling with higher expenses for food, housing, and transportation due to inflation.

  • Economic Pressure: These compounded costs are creating significant financial pressure for households, necessitating more strategic energy and financial planning.


As Tucson navigates these turbulent economic waters, understanding TEP's rate structures and the dynamics affecting them is essential. By staying informed about current rates and future trends, residents can better strategize their energy usage to mitigate the impacts of rising costs. This guide serves as a vital resource for those aiming to achieve energy efficiency and financial stability in an ever-changing economic landscape.


  • What are the current electric rates offered by TEP?

  • TEP's tiered rate system increases with higher energy consumption, starting from a base rate for the first 500 kWh.

  • How can Tucson residents best prepare for rising electricity rates?

  • By optimizing energy usage, considering solar solutions, and staying informed about rate changes and their drivers.

  • What is the future outlook for electricity rates in Tucson over the next five years?

  • Rates are projected to increase annually by 3-5%, influenced by inflation, infrastructure costs, and regulatory changes.

  • How have solar buyback rates changed recently?

  • TEP has reduced the buyback rates for surplus solar energy, affecting the economics of solar installations.

  • What strategies can maximize the benefits of solar energy under the new rate structure?

  • Installing systems that offset more than 120% of energy use can optimize returns, especially with competitively priced solar solutions.

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