The Sun Rises in the Midwest: Solar Policy Momentum America's Heartland

The region is no stranger to renewable energy. It’s already a cornerstone of the nation’s growing wind energy market. Aiming to capture even more green economic opportunity, three states — Illinois, Ohio and Missouri — have recently taken steps to expand the solar portion of their renewable mix as well. It’s worth noting that these are BIG energy markets. Home to both large populations and heavy industry, Illinois and Ohio rank in the nation’s top ten electricity consumers. So even small percentages of their total power mix translate into major new solar opportunities. Collectively, the new solar requirements in these three states add up to nearly 2,000 megawatts (MW) by 2025.

But setting an aggressive solar target is one thing, and achieving it is entirely another. In order to successfully hit their solar destination by 2025, these states need to start paving the road for market growth today. Already proving that point, Ohio’s utilities failed to meet their initial 2009 solar requirements because the right regulatory structure and market drivers weren’t in place. Now a slew of recent legislative wins is helping build the needed policy infrastructure so a robust Midwestern solar market can take root.

Illinois: Paving The Way To 750 MW

Last year Illinois amended its renewable energy requirement to include a solar carve-out: 6% of the RES must come from photovoltaics in 2015. That amounts to a whopping 750 MW of solar, an aggressive initial target for a state that currently has less than 1 MW deployed. And just as Rome wasn’t built in a day, new energy markets need time to scale.

So last month, the state passed a Solar Ramp Up Bill to establish interim annual targets that help avoid a 750-MW solar cliff in 2015. . The new solar targets will require approximately 40, 100 and 180 MW of new solar in 2012, 2013 and 2014 respectively.

It may sound incremental, but it’s an absolutely critical framework for easing electricity providers into the world of solar and protecting Illinois energy consumers from sticker shock. Plus it helps get solar projects and jobs started now – when the Illinois economy can use it most. This year’s legislation sends a clear message to the solar industry to gear up to meet tremendous demand from Illinois in the next two years.

Ohio: Removing Tax Barriers To Renewable Development

In 2008, Ohio passed renewable energy procurement legislation that included a 0.5% by 2024 solar carve-out. At the same time that the state was working to develop a local solar market, existing tax rules placed a crippling financial burden on the development of those very same renewable energy projects. The inordinately hefty taxes cost renewable energy developers up to $100,000 per MW, approximately ten times the rates of neighboring states. Needless to say, solar development was extremely restricted under those tax rules.

Just last week, state legislators passed a tax reform bill, which removes that undue financial barrier to solar development. The legislation sets a new flat-rate tax of $7,000 per MW of generating capacity for clean energy projects including solar and wind. It effectively clears the way for solar growth in the state while ensuring that any renewable development still provides much-needed financial support to Ohio’s communities. The bill now awaits Governor Strickland’s signature to become law.

Missouri: Supporting Customer Adoption Through Pace

In 2008, the Show Me State showed its support for solar by voting overwhelmingly in favor of a renewable energy ballot measure. Proposition C required Missouri’s investor owned utilities to get 15% of their electricity from renewable sources by 2021, 2% of which must come from solar photovoltaics. Looking to translate the momentum from Prop C into more good solar policy, we sought opportunities for growth on the energy customer side as well.

One such bill passed last month when Missouri became the 21^st state to enable PACE programs.  The new law gives Missouri municipalities the authority they need to start these innovative finance programs for green retrofits.  Now it’s up to pioneering cities to get these programs up and running. Missouri’s PACE passage is particularly timely as the state’s solar rebates and rooftop solar renewable energy credit (SREC) incentives programs are being rolled out as well — ready to help make solar even more accessible for Missourians.  The final rules on those solar rebates and SREC purchases will be published within the month.

Data courtesy of Galen Barbose, Lawrence Berkeley National Laboratory

There’s still plenty of work to be done as each of these states continues tackling the ins and outs of solar program implementation through their respective regulatory bodies. But there’s no denying that there’s some impressive momentum in the heartland. The Midwest solar market is looking sunny indeed.

Claudia Eyzaguirre is a senior policy advocate at Vote Solar.  Claudia leads municipal and state level solar advocacy efforts at Vote Solar with a particular focus on the Midwest. Claudia is a GreenCorps-trained campaigner and joined Vote Solar from the Audubon Society, where she served as the California Chapter Coordinator. She holds a B.S. in Conservation and Natural Resources from UC Berkeley.

Rosalind Jackson is director of communications & development at Vote Solar. Rosalind manages media, member and donor relations for Vote Solar. Previously Rosalind spent five years directing and implementing PR campaigns for all manner of clean energy and sustainable business innovators. She has a degree in Environmental Science and Mass Communications from UC Berkeley.

Vote Solar is a non-profit organization working to combat climate change and foster economic opportunity by bringing solar energy into the U.S. mainstream. Claudia is a Senior Solar Advocate leading Vote Solar’s Midwestern campaigns, and Rosalind is the organization’s Director of Communications & Development.  www.votesolar.org