Property tax subsidies for wind and solar projects may be coming to an end in Arizona.
On Wednesday, an Arizona House committee approved HB 2918, legislation to hold renewable energy to the same taxation standards as other forms of energy production. The bill passed the Natural Resources, Energy and Water (NREW) Committee only with support from Republican lawmakers.
According to Joint Legislative Budget Committee estimates, renewable energy companies benefit from about $180 million annually in tax exemptions in the state.
The millions in exemptions come from two “stacked” subsidies: a reduction in the taxable original cost, which reduces a project’s starting valuation base below the actual amount invested through the value of certain federal incentives, and a valuation of 20 percent of depreciated cost, which sets the full cash value of renewable energy and storage equipment at 20 percent of the cost determined following establishment of the taxable original cost.
Republican lawmakers argue this benefit has gone on far enough, given how well-established the renewable energy industry has become. Legislative leaders say these sorts of benefits should be exclusive to emerging industries, like data centers.
Wednesday’s lack of support from Democratic lawmakers indicated the desire to shift resources away from renewable energy is rooted in a partisan desire to shrink the state’s foregone revenues.
NREW Committee chair Gail Griffin (R-LD19) said this legislation would put the merits of renewable energies to the test on the free market while keeping power reliable and affordable. Griffin said the “preferential treatment” of renewable energy lacked justification for further continuance.
“The American public has known from day one that these projects could not stand on their own feet without massive state and federal tax breaks,” said Griffin. “If renewable energy projects like wind and solar are truly the lowest-cost resource, then they should have no problem repealing the massive property tax break for new projects going forward.”
Last month, Gov. Katie Hobbs targeted the benefits given to data centers during her state of the state address.
House Majority Leader Michael Carbone (R-LD25) countered in a press release issued Wednesday that data centers have justification for their tax exemptions — renewable energies, not so much. Data center tax exemptions amount to about $38 million annually, less than one-fourth the amount received by renewable energy.
“The Governor said during her State of the State that, over a decade ago, ‘we made a strategic decision to grow data centers by creating a tax exemption for them,’ but then asked, ‘Should taxpayers continue subsidizing the data center industry?’” said Carbone. “I think the same question should be asked of large, utility-scale renewable energy projects like wind and solar. Years ago, this state gave renewable energy projects a massive tax break, substantially more than data centers, and now it’s appropriate to ask whether it’s fair to have Arizona taxpayers continue subsidizing the renewable energy industry.”
The legislation would impact large, out-of-state corporations. It would not apply to those facilities owned by or engaged in a power purchase agreement with the state’s public utilities — part of a grandfathering provision to ensure tax break eliminations don’t trigger a jump in customer rates.
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Our country is facing an energy crisis. No, not because of new demand from data centers or AI. Instead, it’s because utilities in nearly every state, due to government imposed “renewable” mandates, self-imposed mandates, and the supercharging of the Green New Scam under the so-called “Inflation Reduction Act,” have been shutting down vital coal resources and building out almost exclusively intermittent and costly resources like solar, wind, and battery storage.
A new report from McKinsey & Company, the “Global Energy Perspective,” lays bare what many of us – dismissed as “climate deniers” – have been asserting all along: Coal, oil and natural gas will continue to be the dominant sources of global energy well past 2050.
The McKinsey outlook for 2025 sharply adjusts prior projections. Last year, the management consultant’s models had coal demand falling 40% by 2035. Today, McKinsey projects an uptick of 1% over the same period. The dramatic reversal is driven by record commissioning of coal-fired power plants in China, unexpected increases in global electricity use, and the lack of viable alternatives for industries like steel, chemicals and heavy manufacturing.
The report states that the three fossil fuels will still supply up to 55% of global energy in 2050, a forecast that looks low to me. Today’s share for hydrocarbons is more than 60% for electricity generation and more than 80% for primary energy consumption.
In any case, McKinsey’s report confirms what seasoned energy analysts and pragmatic policymakers have long maintained: The energy transition will not be swift, simple, or governed solely by climate targets. In fact, this energy transition will not happen at all without large scale deployment of nuclear, geothermal or other technological innovations that prove practical.
In places such as India, Southeast Asia and sub-Saharan Africa, the top energy priorities are access, affordability and reliability, which together add up to national security. Planners are acutely aware of a trap: Sole reliance on weather-dependent power risks blackouts, industrial disruption, economic decline and civil unrest.
That is why many developing nations are embracing a dual track: continued investment in conventional generation (coal, gas, nuclear) while developing alternative technologies. McKinsey says this in consultancy lingo: “Countries and regions will follow distinct trajectories based on local economic conditions, resource endowment, and the realities facing particular industries.”
In countries like India, Indonesia and Nigeria, the scale of electrification and industrial expansion is enormous. These countries cannot afford to wait decades for perfect solutions. They need “reliable and good enough for now.” That means conventional fuels will be retained.
McKinsey’s analysis also underscores what physics and engineering dictate: Intermittent and weather-dependent sources, such as wind and solar, require vast land areas, backup batteries and generation and power-grid investments, none of which come cheaply nor quickly.
The technologies of wind and solar branded as renewable should instead be called economy killers. They make for expensive and unstable electrical systems that have brought energy-rich nations like Germany to their knees. After spending billions of dollars on unreliable wind turbines and solar panels and demolishing nuclear plants and coal plants, the country is struggling with high prices and economic stagnation.
The Germans now have a word for their self-inflicted crisis: Dunkelflaute. It means “dark doldrums”—a period of cold, sunless, windless days when their “green” grid fails. During a Dunkelflaute in November 2024, fossil fuels were called on to provide 70% of Germany’s electricity.
If “renewables” were truly capable, planners would shut down fossil fuel generation. But that is not the case. While wind and solar are pursued in some places, coal and natural gas remain much sought-after fuels. In the first half of 2025 alone, China commissioned about 21 gigawatts (GW) of new coal-fired capacity, which is more than any other country and the largest increase since 2016.
Further, China has approved construction of 25 GW of new coal plants in the first half of 2025. As of July, China’s mainland has nearly 1,200 coal plants, far outstripping the rest of the world.
McKinsey points to a dramatic surge in electricity demand driven by data centers, which is estimated to be about 17 % annually from 2022 to 2030 in the 38 OECD countries. This kind of growth in electricity use simply cannot be met by wind and solar.
When analysts, journalists and engineers point out these realities, they’re branded as “shills” for the fossil fuel industry. However, it is not public relations to point out the physics and economics that make up the math for meeting the world’s energy needs. Dismissing such facts is to deny that reliable energy remains the bedrock of modern civilization.
The cost of foolish “green” policies is being paid in lost jobs, ruined businesses, disrupted lives and impoverishment that could have been avoided by wiser choices.
For those who have repeated energy realities for years, the vindication is bittersweet. The satisfaction of being right is tempered by the knowledge that many have suffered because reality has been ignored.
Vijay Jayaraj is a contributor to The Daily Caller News Foundation andScience and Research Associate at the CO2 Coalition, Fairfax, Va. He holds an M.S. in environmental sciences from the University of East Anglia and a postgraduate degree in energy management from Robert Gordon University, both in the U.K., and a bachelor’s in engineering from Anna University, India.
The Green New Scam got its start in Arizona two decades ago when a 5-0 Republican Commission (including then Republican Kris Mayes) adopted the Renewable Energy Standard and Tarriff Rules, or the REST Rules. Among other things, most significantly it ushered in the first “renewable” mandates in our state, forcing utilities to obtain at least 15% of their power from “renewables.” Ratepayers have been paying the costs (over $2 billion) ever since.
The REST Rules had a target date: 2025. Well, it’s now 2025, and the utilities have not only met that mandate, but they have also voluntarily exceeded it. Now our current 5-0 Republican Commission has started the process of repealing them.
Repealing the REST Rules is important, but the targets have already been met, and the price has already been paid. Substantively, the repeal won’t really affect ratepayers all that much. Why? Because mandate or no mandate, our utilities are completely committed to going “Net Zero” by 2050, and so far, they’ve been allowed to do it…
Arizona Corporation Commissioner (ACC) Rachel Walden brought an amendment during the commission’s Wednesday meeting to require detailed, extensive oversight over electrical utilities. Gaining unanimous approval in a 5-0 vote, Walden pushed to ensure Arizona’s electrical grid doesn’t become a ratepayer-funded venue for green projects.
At the October 15th open meeting, Walden pushed through an amendment demanding a more granular kind of report than the industry has provided for the past 26 years, exceeding what is required under Arizona Revised Statutes. Utilities like APS and SRP already owe the ACC their ten-year forecasts under state law, but Walden’s call for more detail: business confidential filings on line congestion, load-growth hotspots, and every grid-hardening method from reconductoring to storm-proofing—are a seismic departure from the more hands-off era that preceded.
Commissioners' Corner: The Commission voted unanimously in September 2025 to initiate the official repeal process for the state's mandatory energy efficiency rules, which were adopted 15 years ago. Commissioner Rachel Walden shares how her vote delivers her promise to ratepayers. pic.twitter.com/se9xwiwv4P
“Finding the least cost, most reliable model includes transmission, not just electricity generation. None of the answers from our state utilities today inspired any confidence in me that these issues are a priority,” Commissioner Walden told the meeting. “I am not convinced that additional build out of renewables, while also having to add firm capacity as well as back up generation, is saving Arizonans money. I know that Arizonans are concerned with these issues, especially as we head into accelerated growth in our state. The Commissioners, as elected by the public, are faced with these questions and comments almost daily, and our actions are held accountable to the public.”
The move from Walden and the ACC seems to have been carefully timed. The Thirteenth Biennial Transmission Assessment projects a 3 percent annual growth surge through 2033, significantly faster than previous forecasts, reflecting Arizona’s population boom colliding with a deluge of intermittent ‘renewable’ sources. With solar and wind flooding the system, utilities are rerouting power across state lines, inviting operational headaches from California’s aggressive decarbonization push.
“Arizonans will not bear the costs and impacts of supporting neighboring states’ Green New Deal policies,” Walden said.
Walden’s amendment mandates confidential reports on congestion and bottlenecks, where new solar farms fail to provide a consistent load or data centers increase demand, along with projections to gauge how interconnection requests ripple through the system. Supporting Commissioner Lea Márquez-Peterson’s additions, Walden is requiring complete disclosures on enhancement efforts, ensuring the ACC can vet if utilities are truly fortifying the state’s transmission system.
With major data centers like Microsoft and Google cropping up in Maricopa County, pulling gigawatts from an already strained grid, peak demand strains are a genuine concern. The disastrous 2023 heat wave that had Texas utilities scrambling is fresh in mind. Arizona is hardly immune to such issues. As renewables providers require load balancing and battery installations, the costs are passed on to ratepayers, and Walden is questioning the utilities’ math.
“Ensuring our utilities have sufficient generation capacity to serve our customers during peak demand along with a reliable transmission grid to handle that capacity is paramount,” she said. “The Commission must ensure that any transmission or generation solutions to mitigate grid concerns, such as line congestion created by the interconnections from new generation sources, or offtakes from the grid by large customers such as data centers and hyperscalers, are borne by the creators of those grid concerns, not Arizona ratepayers.”
Walden pledged to scrutinize future Biennial Assessments and Integrated Resource Plans in a distinct pivot from the ACC’s historically more hands-off stance.
“I will be watching the Biennial Transmission Assessments and Integrated Resource Plans closely, and investigating these issues in all future rate cases,” Walden concluded.
