Arizona opinion: Clean energy investments fuel state’s growth
The economic news coming out of Washington these days is enough to confuse the savviest of business owners. But let’s be clear: The dual prospect of cuts to federal clean energy investments and the imposition of tariffs could threaten the gains we’ve seen across Arizona’s clean energy sector in recent years.
Recent federal clean energy investments have propelled Arizona’s clean technology sector to heights few could have imagined just a decade ago. And those investments are needed. The state’s energy demands will continue to increase as our economy continues to transition.
Transferable clean energy tax credits are allowing companies to build now and save later, resulting in more private investment to the tune of $12 billion since 2022 in Arizona. That growth has led to 30 projects in the clean energy sector and created more than 18,000 jobs across the state, much of it along the Interstate 10 corridor between Phoenix and Tucson.
For instance, LG Energy Solutions is already hiring for its $5.5 billion electric vehicle (EV) battery plant in Queen Creek, a project that expects to create more than 2,500 jobs. Cirba Solutions is opening a battery recycling plant in Eloy. JA Solar has a $60 million solar panel fabrication facility in Phoenix, creating over 600 jobs locally.
Outside the I-10 corridor, Gunnison Copper is implementing clean tech at its facility in Cochise County in southeast Arizona. Near Wellton, EVelution Energy is building a $300 million facility to process cobalt, a critical mineral in lithium-ion batteries that power EVs.
Consumers are also reaping rewards. Tax credits for energy-reducing appliances are making many household upgrades more affordable. Arizonans who upgrade their windows, skylights and insulation are eligible for tax credits to help them reduce the cost of improvements that will lower their energy needs going forward, creating a win-win for homeowners. Solar energy tax credits are reducing the cost of rooftop solar panel installation for Arizonans by 30%. Small businesses, nonprofit organizations and houses of worship are eligible for the same tax credits.
Fortunately, Arizona leaders on both sides of the aisle recognize how important these investments are for Arizona’s economy and the household budgets of Arizona consumers. While some Republican members of Congress are trying to phase out these tax credits, they haven’t been able to do so. We need our congressional delegation to keep advocating clean energy tax credits as they benefit both business owners and consumers.
Proposed tariffs under the current administration could bring significant short- and long-term challenges to Arizona’s clean energy businesses. Arizonans know Mexico is our largest trading partner, and our shared border with Mexico attracts investment because manufacturers tap into both supply chains. A 25% tariff on Mexico — as well as tariffs on Arizona’s other major international trading partners, Canada and China — threatens our standing as a major player in clean energy manufacturing and undermines businesses that are already here. Beyond the impact on businesses, tariffs drive up costs for consumers across the board.
Arizona’s economic growth in recent years puts us on the forefront of the clean energy transition, and our leaders understand that to remain competitive, we must keep growing and creating new jobs. Arizona’s congressional delegation needs to make the case to the president and other national leaders that clean energy tax credits are good for consumers and good for business, but tariffs threaten the future that Arizonans are working so hard to build.
Steve Zylstra is president of the Arizona Technology Council.