Renewables Offer Rural America the Economic Development Opportunity of a Generation
The US pathway to a high-renewables energy future has gained significant momentum in recent weeks, as a new federal administration and Congress take office and begin to work toward the ambitious clean energy goals articulated on the campaign trail. At the same time, wind and solar projects continue to be completed with lowering costs and increasing scale—growing despite the challenges of a global pandemic and policy uncertainty during the past four years. The US Department of Energy’s Energy Information Administration forecast that 24 GW of new wind and solar capacity would be added in 2020, compared with the 14.5 GW installed in 2019.
The prospect of a deeply decarbonized electricity system raises important considerations and questions. What does the industry’s growth mean for rural America, where most onshore wind and utility-scale solar projects will be sited? How will the US electric grid maintain reliability with high percentages of variable renewable generation? How can we plan new clean energy projects to minimize consumer costs? RMI’s newest report, Seeds of Opportunity, addresses the first question, with subsequent reports planned for those that follow.
As the endpoint of a zero-carbon America becomes more clearly defined, the intent of this report series is to provide a playbook for those who will lead the United States in that direction, from the Biden administration, to grid operators, to county commissioners making renewables siting decisions.
A Major Rural Revenue Generator
The numbers tell a powerful story. By 2030, US wind and solar is on track to generate more than $60 billion in annual revenue—on par with the three leading US agricultural commodities: corn ($58 billion), soy ($44 billion), and beef production ($70 billion). Analysis conducted for the Seeds of Opportunity report indicates that the projected 600 GW of new wind and solar projects built between 2020 and 2030 would generate $220 billion in direct, lifetime economic benefits. These benefits are derived from four core value streams generated by onshore wind and utility-scale solar projects:
- Tax revenues collected by local governments (estimated at $2.7 billion annually in 2030);
- Land lease payments to rural landowners hosting turbines or panels on their property ($2.2 billion annually in 2030);
- Construction jobs and wages ($2.3 billion in annual wages by 2030); and
- Operations and maintenance jobs and wages ($3.7 billion in annual wages by 2030).
An On-the-Ground Perspective
An equally critical part of the energy transition narrative is the on-the-ground experience of rural communities with operating wind and solar projects. Seeds of Opportunity uses case studies profiling wind development in eastern Colorado, a solar project in west Texas, and wind manufacturing in Iowa to highlight how the renewable energy industry supports local economies.
The case studies show that behind the tax revenue numbers are upgrades to schools and hospitals, stabilized local budgets, and new community amenities. Behind the land lease payments are farmers hiring an extra hand and investing more in their properties. And behind the jobs and wages created by project development and operations are rural residents able to live and support themselves locally. The place-based excerpts below share the perspectives of three leaders who played integral roles in successfully establishing renewable energy in their communities.
Eastern Colorado
The Eastern Plains of Colorado are home to all 4.5 gigawatts of the installed wind capacity in the state. This contributes greatly to local tax revenues, allowing communities to increase spending on schools, infrastructure, and other social services. “We’re out here in an arid area, with small towns and scarce water resources, so when you build out other industry sectors, like clean energy, that brings much more stability and diversification to our local economy,” says Troy McCue, executive director of the Lincoln County Economic Development Corporation. “What I like about renewables is they’re not subject to the feast and famine cycles of the oil and gas industry.”
West Texas
In Texas, solar installed capacity is expected to grow nearly eight-fold in the next several years. The state’s largest solar project, the 497-megawatt Roadrunner Solar, demonstrates how local communities are realizing the economic development potential of utility-scale solar projects. “Upton County is blessed with abundant sun and wind,” says Upton County Judge Dusty Kilgore. “The greatest thing the Roadrunner project has done for McCamey is support its local businesses.”
Central Iowa
And in Central Iowa, wind manufacturing is helping the town of Newton rebound economically after its primary employer, Maytag, left the community in 2007. According to Frank Liebl, executive director of the Newton Development Corporation, “Wind manufacturing companies TPI Composites and Arcosa have been lifesavers for the community. Their jobs are the highest paying in the community right now. They’re very competitive, with great benefits, and are attracting workers from many surrounding communities that now come to Newton for work.”
A Playbook for Policymakers and Local Leaders
For renewable energy to continue supporting economic vitality across rural America, local, state and federal decision makers need to understand, plan for, and engage with this rapidly growing industry. Experience with operating projects to date suggests an emerging set of best practices that can facilitate thriving renewables development in rural communities.
At the local level, elected officials, economic development directors, and other community leaders can help capture the economic benefits of renewables in a number of ways:
- Revisiting local land use planning, ordinances, and tax policy with renewables in mind
- Developing resources and communications to support landowners and decision makers in engaging with developers
- Preparing local businesses and employment-seekers to apply for project development contracts
- Aligning on specific community development priorities that renewables projects could support
At the state and federal level, policymakers, regulators, and agency leaders can ensure renewable energy development maximizes rural value creation by:
- Articulating a policy framework for renewables that guides local treatment of projects
- Supporting a robust workforce development network, particularly in rural, historically disadvantaged, or fossil fuel-dependent communities, as well as rural asset ownership opportunities
- Incentivizing domestic manufacturing of wind and solar project components
- Creating long-term demand certainty for wind and solar projects
Ultimately, decision makers with authority over renewable energy siting, development, and policy will determine how fast and in what places the industry grows, and the extent to which local communities can capture the resulting economic development benefits. The experiences detailed in our latest report indicate that renewable energy projects are seeds worth planting.