Is Arizona’s Economy Thriving? Energy Policies Set to Define Its Future

Arizona, historically a beacon for business growth, is facing growing uncertainty in its investment climate. Earlier this year, Kore Power announced the cancellation of its ambitious $1.2 billion battery storage plant in Buckeye, a decision underscoring concerns about the state’s energy sector. Additionally, Arizona’s national ranking in residential solar installations has dropped from 5th to 8th, highlighting ongoing instability in clean energy investment.

As the legislative session wraps up, Arizona stands at a critical juncture. The state must choose between persisting in its current trajectory, marked by inconsistency, or recommitting to policies that foster a welcoming environment for markets and innovation.

In a positive turn, Governor Katie Hobbs vetoed several detrimental bills that threatened clean energy progress. These vetoes represent a significant step toward restoring confidence among investors and businesses.

The reinstatement of the state’s Efficiency Arizona program, bolstered by $153 million from the Inflation Reduction Act, offers additional encouragement. This initiative aims to help residents upgrade to energy-efficient appliances, enhancing grid reliability while reducing energy costs. Such programs not only support families but also generate jobs for local contractors and small businesses.

However, these improvements are merely a start. Arizona must advance beyond maintaining the status quo to ensure long-term growth and competitiveness. Proposed legislation requiring utility companies to invest in advanced grid technologies could be pivotal. An upgraded electric grid would more effectively meet rising energy demands, enabling lower costs and improved reliability.

Policymakers are urged to modernize energy infrastructure planning through streamlined permitting and support for local, customer-owned energy resources. Such measures would not only enhance reliability but establish Arizona as a leader in embracing investment-friendly policies.

With strategic policies, Arizona can secure its energy future, bolster local employment, and create a grid capable of supporting the next decade’s growth. Yet, hesitation is not an option. With abundant sunshine and an evolving energy-driven economy, Arizona should capitalize on opportunities in clean energy rather than lag behind other states.

The stakes are high. Arizona’s choice is clear: embrace competition and innovation, or cling to outdated monopolistic practices that inhibit progress. Both businesses and families are attentively watching this critical transition. If the state fails to modernize, it risks falling behind in the race for a sustainable energy future.

Michael Barrio leads the engagement of the national business association Advanced Energy United in Arizona.