How to Prove Renewable Energy Development Will Revitalize Local Communities
The Problem with a Defense-Only Strategy
Utility-scale renewable energy project developers need to bring good news to the communities where they plan to build. Many times a project is on the defensive, battling objections regarding environmental impacts, property values, and health concerns. In order to prove that renewable energy development will have a great positive impact to the local community, you need to provide evidence from a renewable energy expert.
When looking at the economic impacts of a project, the numbers speak for themselves in terms of these positive effects. An economic impact report can detail the number of jobs, earnings, lease payments, and property tax revenue that will come to benefit the entire community. At Strategic Economic Research, we can show how everyone will feel the positive impact, not just the ones who get the jobs and the lease payments.
How Does the Entire Community Benefit from a Renewable Energy Project?
When I first started producing economic impact reports for wind and solar projects, they were exclusively used for permitting at the state level or for a special use permit. As I’ve continued to work with clients, they’re contacting me much earlier in the process because these reports can be used to convince key stakeholders of the economic benefits. For example, they can be used to convince a school superintendent of the property tax benefits to the local school district. If this superintendent knows they will get X amount of new property tax revenue, they don’t just see dollars – they see new hires and restored programs for their school. If some of these key stakeholders can then become advocates for your project, I’ve seen them testify and convince others of the benefits.
In order to show how the entire community benefits from a utility-scale wind or solar project, I need to briefly explain the methodology of the economic impact analyses. I use the National Renewable Energy Laboratory’s Jobs and Economic Development Impacts model, using the latest year’s county and state level multipliers from IMPLAN. IMPLAN is an input-output software which has 536 different sectors of the economy. We take the project costs from the developer and calculate how that spending filters throughout the economy in these various sectors.
Most developers only highlight the number of direct (onsite) jobs and earnings that a project will create. However, the indirect and induced effects are critically important when showing how a project will impact the entire community. Indirect effects are the equipment production and supply chain impacts – for example, from purchases of concrete and rebar for the wind turbine foundations. These materials have to be purchased locally because the transportation costs to source them from somewhere else and bring them into the local community is cost-prohibitive. Induced effects are the jobs that are created from increased local household spending like entertainment or groceries.
Land Use Analysis
When I produce an analysis for a solar project, a common need developers have is to show landowners that solar is a more cost effective use of the land over agricultural use. I can run a land use analysis as part of my report to compare the uses and explain to farmers the advantages to solar. This analysis primarily focuses on the certainty of the profits received each year compared to the uncertainty of yields and prices for crops such as corn or soybeans. To learn more about our land use analyses, click here.
How Strategic Economic Research Partners with Clients
In order to perform an economic impact analysis, I will need the project costs and local spending by cost category. I have a spreadsheet template that breaks out the different cost categories for developers. I’ll also need a copy of the project layout and/or boundary in a KMZ file, as well as any existing tax analysis or information. Lastly, I’ll need the land lease information (price per acre, total acreage of project, term, and escalation factor)
Once I complete my analysis I provide a rough draft to the client to make any needed revisions, and then produce a final 25-40 page graphically-designed version of the report in PDF format. I’m also available to provide expert testimony to support the analysis. I’ve provided testimony at the state public utility commissions, county boards, and township zoning commissions. I’ve also done media interviews as well as presentations to stakeholders and economic development councils.
85% of the projects in which I provide personal testimony have been successfully permitted. I think this speaks to the comprehensive approach that developers have taken with these projects to defend against objections but also educate the community on the economic benefits.
If you’re interested in performing an economic impact analysis for your renewable energy project, contact me at 815-905-2750 or fill out this contact form on my website.
About the Author
I’m David G. Loomis, Professor of Economics at Illinois State University. I’ve been a professor there since 1996. I was Co-Founder of the Center for Renewable Energy at Illinois State University which focused on education and outreach. Through the center we also created a Bachelor of Science in renewable energy between the Departments of Economics, Technology and Agriculture.
I’ve authored 25 peer-reviewed publications and co-authored numerous renewable energy reports covering economic impacts, supply chains, property values, school district taxation and other topics. I’ve supported over 110 projects through permitting, and filed testimony 6 times at public utility commissions in Illinois, Iowa, Kentucky, Missouri, New Mexico, Ohio, and Wisconsin, and provided in-person testimony in 19 cases at the county level.