"One ray of sunshine managed to break through the stormy final hours of the Legislature. Lawmakers approved a package of incentives for the solar-power industry and other alternative-energy enterprises.

Senate Bill 1403, sponsored by Paradise Valley GOP Sen. Barbara Leff, gives us the economic development tools we've been missing to compete with other states."

- Brightening our Economic Future, Arizona Republic Editorial, 7/2/09


News Room


This article was written in 2009 by Senator Barbara Leff (R, Dist 11), the Chairman of the Senate Commerce and Economic Development Committee.

Arizona needs to diversify its economy if we want to better weather economic downturns. We need to focus on creating new, high paying jobs for the residents of our state. Arizona has the potential to become a central location for the rapidly growing solar industry. In fact, Arizona should be the solar capital of the world as a producer, distributor and consumer of solar energy. We have a growing demand for solar products in Arizona and easy access to large markets for solar in California as well as a large semiconductor workforce that can easily translate into a solar manufacturing workforce. 

We should be the leader in manufacturing, research and development and headquarters but we are not. These jobs are going elsewhere because Arizona does not have specific incentives in place to attract these companies. If we can'€™t compete with other states, we will lose our natural competitive edge in this rapidly growing renewable energy sector.

Senate Bill 1403 Quality Jobs through Renewable Energy provides tax incentives for renewable energy manufacturing, research and development and for renewable energy headquarters. We are competing with other states to land this industry and as a result of not have any incentives in place, have lost out on 3800 jobs and $2.3 billion in investments that have gone to other states, according to the greater Phoenix Economic Council. 

Currently, there are 12 solar energy companies representing 4,835 jobs and 4.4 billion dollars in investments that are scouting Arizona as a potential location for new manufacturing, headquarters and research and development. We want to bring those companies here. We want to compete for the thousands of jobs and billions of dollars in investments these businesses would bring to the state. Becoming a leader in renewable energy, especially in solar, would provide Arizona with a new base industry that will supply high paying jobs to Arizonans

SB 1403 offers tax incentives based on the capital investment and the number of jobs created. The wages need to be above the median wage for the state and the companies must provide health insurance for the employees. There is an income tax component and a property tax component and the program must produce a positive economic return for the State. Companies still pay taxes, they just get a tax credit based upon the amount of capital investment and the number of new jobs. It is a one time income tax credit after the company is up and running taken over a five year period and a property tax reclassification based on the amount of capital investment and the wages paid to the employees. The property tax reclassification would be for ten years or fifteen years depending on the wages and investment made and would then return to full taxation.

Once the solar industry is established here in Arizona, other companies will be created to service that industry and economic activity will naturally grow around this industry. That will enhance the economic bottom line of the state for years to come. This is our chance to become the solar capitol of the world, a designation that is ours to lose if we don'€™t act.