By several metrics, Arizona is the sunniest state in the nation.
But solar advocates worry that headwinds at the state and federal levels are preventing Arizonans from taking full advantage of all of that sunshine and the energy it could provide the state.
According to federal climate data, Yuma experiences sunshine during more than 90% of its daylight hours every year, making it one of the sunniest cities in the country. And the Phoenix and Tucson metro areas aren’t far behind.
Arizona ranks fourth nationwide for total installed solar capacity, trailing California, Texas and Florida.
But advocates said there is still plenty of untapped potential in the state.
“There are specific policy factors that are unique to Arizona that disadvantage it and would impact that ranking,” said Autumn Johnson, executive director of the Arizona Solar Energy Industries Association. “You also have national policy factors at play now that are going to impact all markets, not just Arizona.”
Residential solar
Johnson acknowledged that larger states like Texas and California benefit from larger markets, meaning Arizona likely won’t match the sheer amount of solar energy they are producing.
But data shows that smaller states, like Nevada, produce a similar amount of solar energy as Arizona and derive a larger share of their overall portfolio from renewable sources.
“Some of the Arizona specific factors are things like the export rate,” Johnson said, referring to the amount of money residents with solar panels installed on their homes are paid when they sell excess energy back to utilities.
Johnson says Arizona regulators adopted a stepped down export rate a decade ago that gets lower every year.
And she criticized a recent decision by Arizona utility regulators to allow Arizona Public Service, the state’s largest electric utility, to charge an extra fee on customers with rooftop solar to cover costs associated with keeping them connected to the utility’s grid.
Solar advocates called the fee “discriminatory” and said it isn’t justified because solar-powered homes are net positive for the utilities that buy back their excess power.
But the regulators on the Arizona Corporation Commission have defended that decision to approve the charge for solar customers.
Chairman Kevin Thompson, who leads the all-Republican commission, noted that an administrative judge who oversaw the case found the charge was not discriminatory.
“Should it be the same cost that the next door neighbor pays, probably not, because you're not using all the power during a 24-hour cycle,” he said. “But there's still a cost to being hooked up to the grid, because the utility still has to maintain the grid and the connection.”
Meanwhile, data shows that fewer and fewer Arizonans are choosing to install solar on their rooftops.
According to APS, the amount of new residential solar capacity added to its grid dropped from 216 megawatts in 2023 to 108 megawatts in 2024. Through March of this year, APS added 20 megawatts in residential solar additions.
That coincides with a drop in residential solar applications. According to data from Arizona Goes Solar, a collaborative effort between the Arizona Corporation Commission and utilities, applications for new solar installations from APS residential customers dropped from 21,735 in 2022 to 10,193 in 2024.
This year, there were 4,337 permit applications filed as of July 12, falling behind the 2024 pace.
What about the utilities?
Solar groups say state-level decisions are now being compounded by changes in federal policy, including tariffs on countries that produce key solar components and the removal of tax incentives for residential and for larger solar projects. President Donald Trump’s so-called "Big Beautiful Bill" also ended tax credits for homeowners who install solar panels and phased down other incentives for utility-scale clean energy.
Thompson said regulators shouldn’t be in the business of picking winners and losers when it comes to which sources of energy utilities purchase. Those decisions should be driven by the need to provide reliable, affordable energy for Arizonans, he said.
“We want whatever it's going to take to keep the lights on,” Thompson said.
He said solar should be part of a diversified energy portfolio in Arizona.
“In Arizona, if we don't keep the lights on, keep the air conditioners on when it's 120, people suffer,” Thompson said. “And so whether that's solar, whether it's wind, whether it's batteries, whether it's coal, whether it's natural gas, hydro, nuclear — it's an all the above approach.”
But he argues other sources are still necessary to ensure grid reliability on cloudy days.
“For that base load generation, you're still going to have to have natural gas. I don't think there's a way around it,” Thompson said.
Johnson, the solar advocate, argued that rationale doesn’t hold water. She said a state as sunny as Arizona can avoid cloudy day blackouts by using batteries to store energy and strategically building solar facilities throughout the state.
“There's no way there's going to be clouds that are blanketing the entire state at the same time for a long period of time … that's not really how storms work, right?” she said.
The Trump administration has defended its decision to roll back incentives for solar and other renewables while attempting to boost the production of fossil fuels like coal.
But, much like Thompson, Energy Secretary Chris Wright told CNBC the administration is opposed to subsidies, not solar itself.
“Our opposition to solar and wind is the subsidies,” Wright said. “The government’s been paying people to build wind and solar, and the impacts have not been good. They’ve just driven up electricity and destabilized the grid.”
Red tape
But Rich said it's not just the end of subsidies standing in the way of more solar production. He said regulatory roadblocks at the local and federal levels are a main impediment.
He said some counties “are making it really, really difficult to get the land use approvals for this stuff that's absolutely essential for new batteries and new solar projects.”
Solar providers often can’t build anything without first clearing red tape controlled by local governments and counties who regulate the land where those projects will be built.
More and more of those governments are opposed to solar projects.
For instance, the Mohave County Board of Supervisors approved a temporary moratorium on any large-scale solar project in the county in 2023. And, last year, the Yavapai County Board of Supervisors created new restrictions on large solar projects.
And building solar projects on federal land will also feature more red tape in the future. Politico reported solar and wind projects on federal public lands must now be personally approved by Interior Secretary Doug Burgum.
Rich says the wave of new federal solar policies doesn’t align with President Trump’s declaration of a national energy emergency, which he used to justify calls to reopen an antiquated coal power plant in northern Arizona.
“So, you know, just definitely mixed messages,” he said.
Rich said Arizona is “in a full-blown energy crisis,” saying the state has enough energy to meet demand now but not to facilitate growth.
“And you can build solar and batteries and bring them online so much faster than you can go build a new gas plant,” he said.
However, the Trump administration continues to back fossil fuels, pointing out they make up the vast majority of the country’s energy portfolio.
“That’s just such a naïve, destructive view. You’re going to end something that’s 82% of our energy,” Wright told CNBC, referring to former President Joe Biden’s stated goal to reduce reliance on fossil fuels.
In 2024, natural gas (45%) and nuclear power (27%) made up the majority of electricity generated in Arizona. Solar accounted for about 13% of the state’s energy portfolio, while coal made up 8%.
While opinions differ on where the state should get most of its energy moving forward, most stakeholders agree Arizona will need to continue increasing its production to meet demand driven by increasing temperatures, a growing population and the proliferation of energy-intensive industries like data centers.
Many of Arizona’s utilities now break their own energy demand records year after year when temperatures peak in the summer months.
APS delivered a then-record 8,212 megawatts on an extremely hot day last August.
This year, the utility’s peak demand hit 8,527 megawatts on July 9, more than the 8,491 megawatts APS officials told regulators they would need at a summer preparedness meeting earlier this year.
