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Tax incentive cuts could dim Arizona solar investment

Arizona is among the top five states in the nation for solar energy production.
Антон Сальников - stock.adobe.com
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1146652572
Arizona is among the top five states in the nation for solar energy production.

As part of the Trump administration's new budget, Arizona's burgeoning solar industry faces the elimination of tax incentives that have encouraged people to invest in renewable energy.

Despite being one of the sunniest places on the planet, Arizona only generates about 10% of its power from the sun - but tax credits that were designed to increase that share have been largely eliminated in the federal budget.

Sean Gallagher, senior vice president of policy with the Solar Energy Industries Association, said the move will have consequences for the renewable energy industry - not just in Arizona, but nationwide.

"It has really devastating impacts," said Gallagher, "not just to the solar industry, but to American energy security and national security. Solar energy is putting more new power on the grid than every other fuel source combined in the last several years."

Arizona generates about 6,100 megawatts of electricity from the sun, still far less than other states that have made larger investments in solar power infrastructure.

Despite an abundance of sunny days, Arizona policymakers have long shied away from a large-scale shift to generating power from the sun.

While more solar arrays have been developed, much of the investment has been by small, private companies installing residential systems.

Gallagher said the political climate - both in Phoenix and Washington, D.C. - has shifted away from supporting alternative energy, despite its economic benefits.

"Every dollar spent on clean energy tax credits has a $2.67 return," said Gallagher, "in the form of lower energy costs for consumers, and taxes paid by clean energy infrastructure projects - mostly property taxes."

Arizona and other states are now faced with the prospect of trying to invest in solar energy and other renewable power sources without federal encouragement to do so.

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