News > Arizona’s solar community applauds passage of Inflation Reduction Act

Arizona’s solar community applauds passage of Inflation Reduction Act

• Energy democracy & policy

August 12, 2022

Phoenix, AZ – Arizona’s solar community, including the Arizona Solar Energy Industries Association (AriSEIA), Solar United Neighbors Action, and Vote Solar, celebrated the passage of the Inflation Reduction Act on Friday. Among many provisions, the landmark legislation will extend and expand tax credits over the next decade for homeowners and businesses installing solar panels, as well as large-scale clean energy development. The bill earned support from a majority of Arizona’s Congressional Delegation, including Senators Kyrsten Sinema and Mark Kelly, and Representatives Tom O’Halleran, Ann Kirkpatrick, Raul Grijalva, Ruben Gallego, and Greg Stanton. It now goes to President Biden for his signature.

“The Inflation Reduction Act is a huge win for anyone that wants to use solar power in Arizona,” said Bret Fanshaw, Arizona Program Director with Solar United Neighbors Action. “By making solar more affordable for Arizona families, households will directly reap the benefits with lower electric bills for decades to come. We applaud Arizona’s leaders who supported the bill, especially Senators Sinema and Kelly.”

The legislation increases the Federal Solar Investment Tax Credit for residential solar installations from 26% to 30%, beginning this year and extending through 2032. This will lower the cost of an average home solar installation in Arizona by around $6,000. It also makes battery storage technology eligible for tax credits as a standalone resource.

“More solar and storage investment in Arizona will mean tens of thousands more jobs in the renewable energy sector,” said Autumn Johnson, Executive Director with AriSEIA. “With the passage of this bill, Arizona is poised to use our ideal climate and existing solar industry to continue to lead the country on the deployment of solar power.”

In addition to expanding and extending residential tax credits, the bill also provides direct cash payments to tax-exempt organizations installing solar. Traditionally, tax-exempt entities like nonprofits, schools and local governments have not had direct access to federal solar incentives. Rural small businesses and agricultural producers installing solar will also benefit from an expansion of the Rural Energy for America Program (REAP). REAP provides grants that can cover up to half the cost of an eligible rural solar project. The Inflation Reduction Act also includes a $7 billion EPA grant program to enable deployment of zero-emission technologies in lower-income and environmental justice communities.

“We are energized by the solar components within the Inflation Reduction Act. The direct pay and REAP provisions help to reduce barriers to solar for communities and marginalized groups,” said Yara Marin, Regional Director for the Interior West at Vote Solar. “However, we recognize that this bill does not remove every barrier to solar access. Vote Solar will continue to work at the state level to ensure solar for all.”

At the same time the bill is poised to make transformational investments in solar and other clean energy resources, it also has significant shortcomings, such as potential for new fossil fuel development which has an outsized negative  impact on historically marginalized communities. Advocates recognized the need for federal, state, and local government agencies to ensure the bill delivers meaningful results to all Arizonans. As the sunniest state in the country and a burgeoning hub for clean energy technologies from solar panels to battery storage and electric vehicles, Arizona is poised to reap the benefits of this historic $370 billion investment in clean energy and a healthy climate.

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Arizona Solar Energy Industries Association (AriSEIA) is a 501(c)(6) trade organization and the state chapter of the Solar Energy Industries Association (SEIA). AriSEIA works to develop and support policies that create opportunities to advance Arizona’s economy through solar energy and storage. We advocate for sustainable job creation and encourage utilization of Arizona’s greatest natural resource, the sun.

Solar United Neighbors Action is a national 501(c)4 nonprofit. SUN Action represents solar homeowners and everyone who wants to benefit from solar energy. We are fighting for a clean, resilient, and equitable energy system. We do this by putting rooftop solar at the cornerstone. Our grassroots network of solar supporters communicates with lawmakers to implement the policies that will make this vision a reality.

Vote Solar is a 501(c)3 non-profit organization. Vote Solar advocates for state policies and programs needed to repower our electric grid with clean energy. Vote Solar works to remove regulatory barriers and implement key policies needed to bring solar to scale. Vote Solar works to realize a 100% clean energy future through a solutions-driven, people-first approach.