Arizona on track for impressive solar industry growth, report says
The solar energy sector continues to gain strength in Arizona, with robust growth anticipated in the coming years, according to a new industry report.
That outlook comes along with good news for the sector nationwide, according to the US Solar Market Insight Q2 2023 report released recently by the Solar Energy Industries Association and Wood Mackenzie, using data gleaned from the first three months of the year through March.
The latest data shows that the industry had its best first quarter ever, with 6.1 gigawatts of solar capacity added nationwide.
In Arizona, 6,457 megawatts of capacity was added to the grid during Q1, giving the state a No. 5 ranking in the nation for total megawatts installed, at 6,457 MW. The report projects that Arizona will rank No. 4 five years from now, with 10,651 MW installed by 2028.
Right now, solar makes up 9.82% of Arizona’s electricity, with enough capacity to power 984,047 homes. In 2022, $1.5 billion was invested into solar, helping to bring the total value of the solar market in the state to $16.5 billion.
The price for solar installation has continued to go down as well, and in Arizona it’s 54% lower than it was a decade ago, according to the report.
Currently, 368 solar companies operate in Arizona, the report found — with 76 manufacturers, 171 installers/developers and 121 other companies. Those businesses account for 8,278 jobs in the state.
Still some questions around solar industry credits
On the national level, the report found that supply chain challenges have tapered off and the federal Inflation Reduction Act’s incentives for the industry have started to kick in. However, questions about the credits remain for the industry and have prevented the law from having its full impact, the report’s authors said.
Even so, the Biden administration has offered some recent guidance regarding credits that can be used in conjunction with the solar Investment Tax Credit. Further guidance could drive more solar investment in underserved communities and boost the industry as a whole, the authors said.
“As the Inflation Reduction Act begins to flex its muscle and drive demand, the U.S. solar and storage industry is eagerly awaiting further guidance on some of the most impactful pieces of the law,” said Abigail Ross Hopper, SEIA president and CEO, in a statement. “Timely, specific, and workable implementation guidance from the administration will have a major impact on our success in both the near and long-term. This guidance is powerful, and if done correctly, it could unlock new market potential across the country.”
The report also indicated that the issues related to the credits, the fact that the U.S. lacks manufacturing capacity for crystalline silicon solar cells, and a lack of clarity on the rules for the residential market, combine to keep the law’s full impact from being felt so far.
Sill, supply chain relief has allowed delayed projects to be completed and helped the industry rebound from a difficult 2022 with a strong first quarter in 2023. A record 3.8 GW of solar capacity was installed to start out the year.
Leading the nation for solar installations in the first quarter was Florida, with 1.46 GW installed. That was 70% more than the next highest state, California.