AriSEIA's Radio Interview on the Solar Market in Arizona

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Arizona, with its abundant sunshine, seems like a natural leader in solar energy. Yet, according to Autumn Johnson, an advocate for solar energy, the state is facing a significant decline in residential solar installations. Data from Ohm Analytics shows a 31% year-over-year drop in solar permits as of May 2024, marking the lowest level since 2021.

Economic and Policy Challenges
Several factors contribute to this decline. High interest rates, currently above 8%, make financing solar systems more expensive, deterring potential customers despite the federal tax benefits available under the Inflation Reduction Act.

Beyond economic barriers, state policies are also to blame. Arizona has reduced the export rates for excess solar energy, meaning homeowners are paid less for the energy they send back to the grid. Additionally, recent increases in fixed fees for solar customers, such as the grid access charge introduced by the Arizona Corporation Commission, have made solar less financially attractive.

A Missed Opportunity
While other states continue to support solar growth through net metering, Arizona's policies are pushing it in the opposite direction. Johnson points out the irony that Arizona, with over 300 sunny days a year, ranks only fifth in solar capacity nationally—a position that should be much higher given the state’s natural advantages.
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Looking ahead, Johnson is concerned about the state’s direction. With increasing political skepticism toward both residential and utility-scale solar projects, Arizona risks missing out on a significant economic opportunity. In a state where solar should be thriving, policy and economic barriers are holding it back, leaving the future of solar in Arizona uncertain.