Battery Energy Storage System is booming in Arizona

Published: October 8, 2025

Arizona has raced into the top tier of states deploying utility‑scale battery energy storage systems. In just a few years the Grand Canyon State has accumulated nearly 3,900 megawatts of operational battery storage and approved plans for another 3,807 MW to come online by 2026, according to the U.S. Energy Information Administration. This surge reflects a strategic push to marry Arizona’s abundant solar resources with large‑scale batteries that deliver power after sundown, providing reliability and flexibility the grid desperately needs. But along with these benefits come questions about cost, regulation and safety. This article unpacks the drivers behind Arizona’s battery boom, the challenges it faces and why pairing solar with storage is the smartest path forward for homeowners and businesses.

From unprecedented capacity approvals by the Arizona Corporation Commission (ACC) — which approved more than 4,700 MW of new generation capacity with about 82 percent coming from solar‑plus‑storage — as detailed in an ACC news release to warnings from safety advocates about thermal runaway in lithium‑ion cells reported by the Associated Press, the conversation around BESS has never been more timely. We’ll explore why utility‑scale batteries are crucial to balancing supply and demand, examine the state and national policies propelling their growth, and address the fears that have sparked local opposition. Along the way we’ll highlight how Solartopps customers can leverage this technology to lower bills and secure energy independence.

Arizona’s Soaring Battery Energy Storage  System Capacity

The most recent Energy Infrastructure Update from the Federal Energy Regulatory Commission shows that solar power made up more than 81 percent of new U.S. generating capacity through the first eleven months of 2024, according to the Arizona Corporation Commission. Arizona mirrored this trend: regulators approved more than 4,700 MW of new generation in 2024, with approximately 82 percent — about 3,850 MW — coming from utility‑scale solar paired with battery storage and only 18 percent (922 MW) from natural‑gas plant expansions as reported by the ACC. Most of these solar and storage projects are already under construction and expected to begin delivering power later this year, effectively catapulting Arizona into the top three states by BESS capacity.

Two of Arizona’s largest utilities are driving this growth. Arizona Public Service (APS) plans to add nearly 2,500 MW of solar and storage by the end of this year through power‑purchase agreements with nine new facilities, according to the ACC. Tucson Electric Power (TEP) is adding nearly 400 MW of solar and battery capacity by 2026 under contracts with independent developers the same release notes. These commitments align with a larger national trend: Wood Mackenzie and the American Clean Power Association report that utility‑scale battery deployments hit 4.9 GW/15 GWh in the second quarter of 2025 — a 63 percent year‑over‑year increase as reported by Utility Dive. California, Texas and Arizona together accounted for 75 percent of that capacity, underscoring how the Southwest is becoming the epicentre of battery investment.

What’s Driving Arizona’s Battery Boom?

Several factors explain why battery storage is expanding so quickly in Arizona. One major driver is the state’s meteoric growth in data‑center and high‑tech manufacturing demand. From the construction of semiconductor fabs to the proliferation of AI‑powered data centres, electric load forecasts have spiked, driven by semiconductor and AI manufacturing growth. Pairing solar panels with utility‑scale batteries allows developers to meet these loads with clean energy rather than building new fossil‑fuel plants. The ACC’s proactive approval of private power‑purchase agreements for solar‑plus‑storage projects encourages independent developers to deploy capital while protecting ratepayers from bearing all the costs as noted in the ACC news release.

Lower Cost for Battery Energy Storage Systems

Falling technology costs and federal incentives also play a pivotal role. Commercial and utility‑scale solar system prices fell by roughly 4 percent in 2024, while module prices dropped 18 percent, according to SEIA’s Solar Market Insight report. The Inflation Reduction Act provides investment tax credits for stand‑alone storage and solar, and additional incentives under the Production Tax Credit further improve project economics. These policies make long‑term PPAs with solar and battery providers economically attractive for utilities and corporate buyers. Wood Mackenzie projects that 356 GWdc of new utility‑scale solar capacity will be added nationwide between 2025 and 2035, and warns that rising electricity demand from AI and data centres cannot be met without significant deployment of solar and storage as outlined in the same report.

Battery technology itself is improving rapidly. Systems today can charge from cheap power during periods of low demand and discharge at a profit during high‑demand hours, reducing reliance on natural‑gas peaker plants. In the second quarter of 2025 developers added 4.9 GW of battery storage capacity, a record for any quarter, and utility‑scale storage deployments grew 63 percent year on year according to Wood Mackenzie and ACP. New York, for example, has set an ambitious goal to add 6,000 MW of storage by 2030, but California, Texas and Arizona together still accounted for three‑quarters of the capacity installed in that quarter, highlighting how favourable policies and market demand can accelerate adoption.

Addressing Safety and Community Concerns

As battery storage becomes ubiquitous, it has also sparked local opposition. Lithium‑ion cells can undergo thermal runaway, a chain reaction of uncontrolled heating that leads to fire or explosion. Opponents point to past incidents — such as a major battery storage facility in Moss Landing, California, that caught fire in January 2025, sending plumes of toxic smoke into the atmosphere and forcing the evacuation of about 1,500 people as reported by the Associated Press. Such events fuel fears in communities considering new projects: “We’re not guinea pigs for anybody … we are not going to experiment,” said Michael McGinty, mayor of Island Park, New York, after his village passed a moratorium on a proposed storage system according to the same article.

Despite these concerns, experts emphasise that modern battery systems are significantly safer than earlier designs. Odofike Ezekoye, a combustion researcher at the University of Texas at Austin, notes that failures are “relatively infrequent” and that engineers are rapidly improving system design according to AP reporting. Fire codes in states like New York require modular enclosures and minimum spacing to prevent fires from spreading, and battery proponents argue that facilities like Moss Landing — where batteries were stored indoors — would not be permitted under these codes as the article notes. In Washington state, the city of Maple Valley enacted a six‑month moratorium to “protect us until we know more,” but other communities have since resumed project approvals after safety reviews the report adds.

Misconceptions with Battery Energy System Storage

Developers are also investing in public outreach to address misconceptions. They point out that battery storage systems behave much like electric vehicles, with thousands of safe, everyday deployments. Terra‑Gen, for example, says its proposed 250‑MW lithium‑ion storage project in Ulster County, New York, poses no credible scientific threat to neighbours according to the same AP story. New York State Energy Research and Development Authority President Doreen Harris stresses that properly scaling up battery storage “will strengthen and modernize our grid” and notes that early concerns about solar farms have largely given way to recognition of their benefits as quoted by the Associated Press.

Policy and Regulatory Challenges

While Arizona’s energy landscape is transforming rapidly, its regulatory framework has not kept pace. ACC Chair Kevin Thompson notes that the statute authorizing the Commission to regulate power plants hasn’t been substantially updated since 1971. As a result, the Commission has limited authority over non‑thermal generation like battery storage and solar, the ACC acknowledges. Senate Bill 1538, passed by the legislature earlier this year, would have expanded ACC jurisdiction to include renewable generation, but it was vetoed by the governor. The Commission currently approves only transmission‑related infrastructure and cost‑recovery requests for battery systems, leaving zoning decisions and project approvals to local governments according to the ACC release.

This patchwork of authority can slow deployment. Communities sometimes impose temporary moratoriums because they lack clear guidance on siting and safety. The Pacific Northwest National Laboratory reports that the number of localities passing moratoriums rose in 2023 and 2024, with a cluster in New York where residents opposed large projects as noted in AP coverage. For Arizona to fully realize the benefits of BESS, policymakers must modernize statutes to treat all generation sources equally and ensure that environmental and community considerations are balanced across project types. Clear state‑level standards would help avoid piecemeal bans and accelerate responsible development.

Why Solar‑Plus‑Storage Is Arizona’s Future

Despite the challenges, the case for battery energy storage paired with solar is overwhelming. Solar generation peaks during Arizona’s bright, cloudless days, coinciding with soaring air‑conditioning demand. When coupled with batteries, excess midday power can be stored and dispatched during evening peaks, reducing strain on transmission lines and minimizing the risk of brownouts. Batteries can also provide fast‑responding frequency regulation and voltage support, functions that traditional generators perform less efficiently.

Economically, solar‑plus‑storage offers price stability because sunshine has no fuel cost. Each additional solar project drives down costs as economies of scale and technological learning take hold, SEIA reports. Batteries allow utilities to avoid running expensive natural‑gas peaker plants, insulating consumers from volatile gas prices. For homeowners, rooftop solar paired with a home battery can reduce bills and provide backup power during outages, adding resilience amid extreme heat and increasingly frequent grid emergencies.

Environmentally, BESS helps Arizona meet its sustainability goals. Batteries produce zero emissions during operation and use little to no water — a crucial advantage in an arid state facing severe droughts. By enabling higher penetration of solar and wind, battery storage reduces dependence on imported fossil fuels and decreases greenhouse‑gas emissions. In 2024, renewable energy sources generated more electricity than coal and almost as much as nuclear power, according to an analysis of FERC data. This highlights how clean energy, combined with storage, is already transforming the grid.

Building Resilience Through Battery Storage

Arizona’s approval of 3,850 MW of solar and storage capacity in a single year marks a watershed moment for the state’s energy future, according to the ACC. The surge reflects a broader national trend of record‑setting battery deployments and confirms that solar‑plus‑storage is a cornerstone of modern grid planning as reported by Utility Dive. While some residents worry about safety and regulatory challenges persist, advances in battery technology, robust fire codes and proactive community engagement are addressing those concerns. Policymakers must continue modernizing statutes to keep pace with innovation and ensure that all generation sources are evaluated equally.

For homeowners and businesses, the takeaway is clear: investing in battery storage and solar today hedges against rising energy costs, enhances resilience and contributes to a cleaner, more reliable grid. The experts at Solar Topps can help you design a custom solution that leverages the latest incentives and technology. Together we can ensure Arizona’s energy future shines bright.