New carbon standards proposed on June 2, 2014 have the potential to impact the solar industry here in Arizona. States will be given the latitude to create their own plans for acheiving a 30% reduction in carbon emissions over 2005 levels by 2030.

Currently a 30% federal tax credit for installing renewable energy systems makes solar and geothermal affordable for home and business owners. That credit is set to expire in 2016, but the new carbon standard might create the need for a new financial incentive to take its place. States have the option to include new renewable energy capacity as part of their plan for meeting the 2030 target. Although it will be several years before the plan for reducing carbon emissions here in Arizona is finalized, increased renewable energy capacity will no doubt be a factor. Arizona may choose to incentivize renewable energy generation through an increased state tax credit, the return of utility incentives, the opening of a market for trading renewable energy credits, or some combination of these. Any of these options would help level the playing field for renewables, which have not received subsidy levels anywhere near the magnitude of those historically provided to nuclear and coal in Arizona.