Arizona’s growing solar industry could soon lose momentum as the Trump administration’s latest budget removes key tax incentives that have fueled investment in renewable energy.
Despite being one of the sunniest places on Earth, Arizona generates only about 10% of its electricity from solar power. Much of that growth came from federal tax credits that have now been largely eliminated.
Sean Gallagher, senior vice president of policy at the Solar Energy Industries Association, warned that the cuts could ripple far beyond Arizona.
“This has really devastating impacts,” Gallagher said. “Not just to the solar industry, but to American energy security and national security. Solar energy has added more new power to the grid than any other fuel source in recent years.”
Arizona currently produces around 6,100 megawatts of solar energy—still behind other states that have made larger investments in solar infrastructure. While the state enjoys an abundance of sunshine, major transitions to solar power have been limited. Most progress has come from small private firms installing residential solar systems rather than from large-scale public initiatives.
Gallagher said political support for renewable energy has declined at both the state and federal levels, even though the economic benefits are clear.
“Every dollar spent on clean energy tax credits returns $2.67,” he said. “That comes from lower consumer energy costs and taxes paid through clean energy projects, especially property taxes.”
With the loss of federal incentives, Arizona and other states now face the challenge of expanding solar energy without national backing.
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