Arizona is known for its iconic vistas, from the Grand Canyon and Monument Valley in the north and east to the deserts in the southwest Although it is the most populous state in the Mountain Census Division, the majority of Arizona’s residents live in a few dense urban areas, leaving the rest of the state lightly populated. Elevations in Arizona vary from peaks more than 2 miles high in the northeast to nearly sea level in the lower deserts of the Basin and Range region to the southwest. Some of the highest elevations in the state are along the 200-mile long, steep-sided Mogollon Rim, the area with Arizona’s greatest wind potential. Although higher elevations receive greater amounts of precipitation, including significant snowfalls, most of Arizona is semiarid, and abundant sunshine gives the entire state some of the nation’s greatest solar power potential.

The Basin and Range region of southwestern Arizona is rich in minerals, and the state drew Spanish explorers seeking gold, silver, and copper as early as the 1600s. Arizona mines also have produced uranium. Northern Arizona is the site of some of the nation’s major uranium reserves, including the highest-grade uranium mine in the nation. Mining has long been a significant contributor to Arizona’s wealth, but the economy has diversified. Real estate, professional and business services, trade, and health care services are among the largest contributors to the state’s gross domestic product. Other key industries in Arizona include computer and electronic products manufacturing, aerospace and defense, renewable energy, biosciences, and optics and photonics. Arizona still produces more copper than any other state.

Transportation is the largest end-use energy-consuming sector in Arizona.

Arizona’s primary economic activities are not energy intensive, and the state’s per capita energy consumption is among the lowest in the nation. The transportation sector is Arizona’s largest end-use energy consumer, followed by the residential sector. Mild summers in the north and mild winters in the south make Arizona a popular vacation and retirement destination. The mild weather draws seasonal residents, and about 1 in 13 Arizona homes is occupied only part of the year. The state’s year-round population has rapidly increased in recent decades.

Renewable Energy

Quick Facts

  • Arizona’s Palo Verde Nuclear Generating Station, rated at 3,937 net megawatts, is the largest net generator of electricity in the nation. By capacity, it is the second-largest power plant of any kind in the nation.
  • Arizona ranked second in the nation in utility-scale electricity generation from solar energy in 2015.
  • Arizona, the 14th most populous state, ranked 45th in the nation in per capita energy consumption in 2014, partly because of the state’s small industrial sector.
  • Arizona’s only operating coal mine, Kayenta, on the Navajo and Hopi reservations, supplies the 7-to-8 million short tons burned annually by the Navajo Generating Station’s three 750-megawatt units.
  • Arizona’s Renewable Environmental Standard requires 15% of the state’s electricity consumed in 2025 to come from renewable energy resources; in 2015, 9.5% of Arizona’s utility-scale net electricity generation came from renewable resources, primarily from the Glen Canyon and Hoover Dams.

The Glen Canyon and Hoover Dams, among the largest power plants in the state, provide the bulk of Arizona’s net hydroelectric generation.

The Glen Canyon Dam and Hoover Dam, both located on the Colorado River in northern Arizona, are among the largest power plants in the state and provide the bulk of Arizona’s net hydroelectric generation. Hydroelectric power has long dominated Arizona’s renewable electricity generation. However, increasing amounts of electricity generation capacity from other renewable sources, especially solar, are coming online. Arizona has one of the largest solar energy resources of any state. The state’s first commercial solar photovoltaic (PV) array opened in 1997, and one of the world’s largest solar PV facilities, located in Yuma, Arizona, was completed in 2014. There are also facilities in Arizona that use concentrating solar power technology. Arizona was one of the top five states in the installation of new solar facilities in 2015 and ranked second in the nation after California in total installed solar electric capacity. In 2015, solar energy contributed about 4% to Arizona’s net electricity generation, about one-fourth of it from distributed (customer-sited small-scale) generation. The state has some wind potential, mainly along the 200-mile-long, steep-walled Mogollon Rim that cuts across central Arizona. The state’s first commercial-scale wind farm became operational in 2009, but, in 2015, wind provided less than 0.5% of Arizona’s net generation. Arizona has geothermal resources; however, the state does not have any utility-scale power plants that use geothermal energy. Arizona has many hot springs, a few small spas, and several direct-use applications, including an active aquaculture industry that uses geothermal resources to raise shrimp and other fish. Some deeper high-temperature resources, particularly in the central and southern parts of Arizona, may be suitable for power generation. Arizona has participated in a federal effort to map geothermal potential across the nation.

Arizona’s renewable energy standard requires that increasing amounts of electricity sold in the state must come from renewable sources. The state’s overall renewable goal for regulated electric utilities is 15% by 2025. Key to developing renewable resource potential on a large scale in Arizona is the transmission capacity needed to carry the electricity from remote sites where it is generated to urban markets. State, regional, and federal stakeholders are developing expanded transmission infrastructure in Arizona. Each year, a total of 30% of the required renewable energy target must come from non-utility distributed generation. Half of the non-utility distributed generation requirement must come from residential sites and the other half from non-residential non-utility installations. The state allows net metering for distributed (customer-sited) renewable generation. In addition, Arizona’s energy efficiency standards require investor-owned electric utilities, electric cooperatives, and natural gas utilities to increase energy efficiency to reduce consumption of both electricity and natural gas.


Arizona’s Palo Verde Nuclear Generating Station is the nation’s largest nuclear power plant and is second only to the Grand Coulee Dam in total generating capacity.However, in the past, coal fueled the largest share of net electricity generation in the state. Coal-fired generation has decreased and, in 2015, coal, nuclear, and natural gas each fueled about three-tenths of the state’s net electricity generation. Renewable resources, mostly hydroelectric power and solar photovoltaic (PV) generation, provide the balance.

Power plants in Arizona generate more electricity than the state consumes, and Arizona generating stations supply electricity to consumers throughout the southwest. Transmission lines have become congested in peak demand periods. Arizona has been working with other states and stakeholders on multiple projects to improve transmission capacity. Among them are projects to bring electricity from Wyoming, Colorado, and New Mexico to urban areas in the desert southwest, including Las Vegas in Nevada; Phoenix and Tucson in Arizona; and Southern California. Another transmission project is in development that will connect areas of southeastern California to southwestern Arizona. However, changes in future demand forecasts have caused several projects to be deferred.

Per capita retail electricity sales in Arizona are below the national average, even though about 3 in 5 households rely on electricity as their primary energy source for home heating, and more than 9 in 10 homes have air conditioning. Electricity is also crucial for pumping water for drinking and irrigation from the Colorado River in the north to the drier central and southern parts of Arizona. More than four-fifths of the state’s population lives in south-central Arizona.

Natural Gas

With only a few producing wells and little new drilling activity, Arizona’s natural gas production has declined to less than 100 million cubic feet per year from a peak of more than 2 billion cubic feet per year in 1990. Almost all of the natural gas consumed in Arizona comes from other states via interstate pipelines that enter Arizona at the New Mexico border. More than two-thirds of that natural gas entering the state continues on to California. Arizona has no natural gas underground storage capacity, and attempts to build storage fields to buffer against supply disruptions have encountered financial and environmental issues. A natural gas distribution company in the state is planning to construct a liquefied natural gas (LNG) storage facility in southern Arizona to assure supply.

The electric power sector consumes almost three-fourths of the natural gas used in Arizona. The residential sector, where about one-third of Arizonans use natural gas as their primary home heating fuel, is a distant second, accounting for about one-tenth of the state’s natural gas consumption. Overall per capita consumption of natural gas in Arizona is less than in four-fifths of the states.

Source: U.S. Energy Information Administration (Dec 2016)

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