This report presents an analysis of the financial returns that a photovoltaic system can provide for the average Arizona household. Special attention is given to construct a full comparison between the financial payoffs of a 4.5 kW photovoltaic (PV) system and an alternative long-term investment, such as a bond or certificate of deposit. The comparison shows that homeowners investing in solar energy can earn healthy untaxed returns, while gaining a hedge against future increases in electricity costs.

 

Numerical figures used for this analysis are largely reflective of statistical means.

 No matter what the regulatory approach, regulation necessarily presents utility managers with a set of economic incentives or disincentives which may favor or disfavor the deployment of renewable energy. Regulators should be attuned to these incentives in their decision making and strive to align them with public policy objectives.

 

Today, Arizona has a real opportunity to initiate this cumulative process of development. One can already witness the forces that economic theory describes at work in certain parts of the state. Arizona will undoubtedly be a hub of solar power generation, with the world’s largest generation plant being developed in Gila Bend by the Spanish company Abengoa. Further, Arizona will also be the home of consumption of solar power. However, the element Arizona is missing is the high-tech manufacturing facilities needed to make the panels to conduct solar power. Within the solar industry chain, these facilities yield the most economic benefit to a state.