With the passing of the Inflation Reduction Act (IRA), the future of solar energy in Arizona has changed dramatically. Various companies, local and national, have recently started developing or have already developed projects in the state. Solar energy development will create more economic incentives toward green energy, advance diversity in energy capture, and establish a more community- and tribal-based approach to natural resources while prioritizing renewable energy as a primary source of the state’s power.
One of the most notable incentives for solar energy is tax credits. The IRA has restored and extended the federal solar energy tax credit which allows homeowners to write off 30% of the cost to install solar panels. A separate property tax exemption includes pool heaters, space heaters, thermal electric and water heaters powered by solar energy. This economic incentive will encourage many Arizonans since one of the largest barriers to installing solar is the financial burden. Even so, this will likely have little impact on low-income communities who are still unable to afford the initial installation(s). However, the IRA proposes “community solar” projects which will allow those who cannot install rooftop solar to also lower their energy bills. The Nonprofit Solar Project in Arizona provides free solar installations to nonprofits in the Tucson area with donations from local businesses.
An incentive for Arizona residents to install solar is net billing. Three major electric companies in Arizona (Arizona Public Service, Tucson Electric Power, and UNS Power) provide net billing to customers, allowing homeowners to earn credits for having solar power systems by selling back their unused energy to the grid. Unfortunately, Arizona does not currently have a net metering program where, as opposed to the credit program involved with net billing, utility companies pay homeowners the retail rate of electricity when they have installed solar. The Arizona Corporation Commission repealed the net metering requirement in 2016, but its re-installation could save Arizona residents even more money when they decide to invest in solar power.
Various companies, local and national, have recently developed projects in the state. In 2021, Tucson Electric Power (TEP) built the Wilmot Energy Center (WEC), a solar farm in southeast Tucson. This development will help TEP reach its goal of 70% renewable energy generation by 2035. TEP plans to charge the batteries in the mornings so it can deliver stored energy during peak hours. TEP has also established a wind energy project in New Mexico. What makes these renewable energy projects special is TEP’s acceptance of public input; it held an online workshop that helped develop the decade-long plan it is currently striving to implement effectively. Both the WEC and the Oso Grande wind energy project in New Mexico help power the University of Arizona’s main campus. The collaboration of energy companies across Arizona, and the country, with renewable energy production will be determinative of energy generation of the future.
In the summer of 2022, Tesla announced the construction of the first Tesla V4 Supercharger station with solar power that is to be built in Yuma County, Arizona. The station is expected to have increased charging speeds and will generate electricity to charge electric vehicles through solar panel arrays. The V4 station will also have a Megapack which will store enough energy to charge 40 electric vehicles, which is about the number of stalls expected by the building permit if not more. The Supercharger will be available to all electric vehicles, including non-Teslas. There is no date set for when the station will be fully operational, but it is expected in the first quarter of 2023.
The influences of tribal communities in their push for energy sovereignty will likely have an immense impact on energy production in Arizona. Tribal nations already face energy poverty due to lower median per capita income, higher poverty rates, and generally greater distances from power grids. The Native Sun Community Power Development and the Indigenized Energy Initiative are non-profit organizations that work on creating clean energy projects among tribal communities due to the immense renewable energy potential across tribal lands. These organizations, along with tribal leaders, want to avoid exploitation from large energy companies by creating jobs and developing affordable, cleaner energy sources. Navajo Power, a public benefit corporation, has established the Painted Desert Solar Project which is a 750-watt photovoltaic solar farm and battery storage system near Cameron, Arizona. This will be the largest solar project on tribal lands and will be instrumental in the employment and energy spheres.
The IRA has committed to ensuring climate resiliency and adaptation, and accounting for the adverse impact on tribal communities and lands. The IRA sets out the Tribal Electrification Program for tribal organizations to provide electricity to unelectrified homes through zero-emission energy systems, and to transition electrified homes to zero-emission energy systems. The IRA also expands tax credits for projects built in “low-income and disadvantaged communities,” which applies to many tribal communities. The upcoming focus on solar development and the IRA provisions intended to promote equity among all families will be extremely powerful in reducing the impact of coal-powered energy plants.
Overall, solar power in the American West is generating popularity. In Arizona, the sun is a valuable future asset to renewable energy and will continue to be a promising resource with respect to developing projects and plans in the state.
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Solar Reviews, What you need to know about Arizona’s net billing program (last visited October 25, 2022), https://www.solarreviews.com/blog/arizona-net-metering
Solar Energy Industries Association, Net Metering (last visited October 25, 2022), https://www.seia.org/initiatives/net-metering
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TEP, Our Path to a Sustainable Energy Future (last visited October 25, 2022), https://www.tep.com/tep-2020-integrated-resource-plan/
TEP, Wilmot Energy Center (last visited October 25, 2022), https://www.tep.com/wec/
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