Thousands of Arizonans invest in solar each year to lower their electricity bills and contribute to creating a cleaner, more sustainable community. Congress is currently debating a $3.5 trillion budget bill that, if passed, will drive long-term economic growth and promote sustainability here in the Grand Canyon State and across the country. But as it stands today, it is still missing a critical component that would begin to address disparities in access to the benefits of solar energy and create good paying jobs in Arizona communities.
The good news is that one of our senators, Krysten Sinema, will have major influence on the final legislation. She should use that power to push for changes to the federal solar Investment Tax Credit, the tax incentive that helps homeowners cover the upfront costs of residential solar panels.
In its current form, it’s very easy for higher income households and businesses to take full advantage of this credit. Utilities have leveraged the credit to install large scale solar projects, and the big players in the financial markets have benefitted tremendously by providing “tax equity” and financing for billions of dollars of projects. But for families with annual incomes low enough that they pay little or no taxes, it can take years for them to access the full value — if they can benefit at all. That includes many retirees living on a fixed income and families with children making a modest income. In other words, affordable solar energy has been put out of reach of many who need it most for far too long.
A recent RAND Corporation report found that lower-income homeowners would be able to access solar energy if the credit was made refundable, or what is commonly known as “direct pay.” It’s a simple solution that will have an indelible impact on families all over, and Senator Sinema can make it a reality.
It’s no secret that climate change is one of the most pressing issues of our time. It’s also one that individual American families can play a significant role in solving, with 42% of carbon emissions coming out of household decisions. Solar technology produces clean and emissions-free electricity that reduces the emissions pumped into our atmosphere by burning fossil fuels.
But what many may not consider is that expanded access to solar comes with vast economic benefits. The clean energy economy is a proven boon for job creation, with more than 250,000 solar workers in the United States spanning across manufacturing, installation, distribution, and other industries. Arizona has seen significant growth in advanced energy jobs, with a recent industry report showing 69,000 jobs in the sector and a growth rate of 3.5%.
These are also good-paying jobs that cannot be exported. According to an October 2020 report from leading business and renewables groups, clean energy jobs pay 25% more than the national median wage and pay more than many jobs in the fossil fuel industry.
There is no indication that the solar energy industry will slow down. Supplies of renewable electricity are growing faster than anyone could have expected. Last year, the solar industry was able to generate more than $25 billion of private investment in our nation’s economy. Making the tax credit accessible to even more families will help ensure that all communities can benefit from that investment.
Senator Sinema herself has been a leader on solar. Along with Sen. Mark Kelly, Sinema introduced the La Paz County Solar Energy and Job Creation Act, which would transfer 4,800 acres to La Paz County for renewable energy usage. It’s clear that we can usher in a cleaner Arizona through the help of common-sense legislation — but we need to make sure that we are implementing the right policies to get us there.
To ensure an equitable and more sustainable future — one that creates good-paying jobs and opportunity for Arizonans — Senator Sinema should push for changes to the section 25D ITC in the budget reconciliation bill that would offer a direct pay option. The clean energy revolution cannot meet its full promise unless the pool of those who can participate is expanded.
Kevin Koch is the co-owner of Technicians For Sustainability, an Arizona-based company specializing in renewable energy and sustainable technologies for residential and commercial settings.