How communities can take control of their energy futures
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Energy self-reliant states have stronger economies. And new data on wind power potential reveals that five Midwestern states could match their current electricity use with domestic wind power.
But along with the good news, these states -- Missouri, Illinois, Indiana, Ohio and Michigan -- should take note of the stakes.
"I live out on the Buffalo Ridge [in southwest Minnesota]...I look out my window and I see hundreds of wind turbines. When I look at those turbines I'm happy and I'm sad... Most of those turbines are owned by our friends, the foreign multinationals. Out of two counties in Minnesota we export about $80 million a year to France, Florida, Italy, Portugal, Spain. All of our energy future is going out the door when we could be turning that into something real for us." -- Minnesota community wind developer Dan Juhl.
How can these five states get "something real"? There are 32 states that have enough in-state renewable energy to be energy self-reliant. And successful models in these states illustrate how local ownership, energy efficiency and innovative local government financing can maximize the economic returns of this resource.
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A single wind turbine creates $1 million in economic activity, according to the American Wind Energy Association. And that's just a generic, utility-scale turbine.
The National Renewable Energy Laboratory has shown that a locally owned wind turbine creates twice the jobs, and three to four times the economic impact, of a turbine that's planted next door but "absentee"-owned by someone far away.
How important is local ownership? Ohio's wind potential could generate 94 percent of the state's electricity and -- if locally owned -- $173 billion in economic activity.
States can also move toward energy self-reliance by reducing demand. Efficiency Vermont -- the state's nonprofit clearinghouse for energy efficiency -- used aggressive, targeted programs to keep electricity consumption flat in 2008.
It's not just about self-reliance for Vermont, it's also about saving ratepayer money. The energy efficiency program participants -- Vermont homes and businesses -- average a 6 percent rate of return on their efficiency investments.
Vermont is not the only state saving its grid and growing its economy with efficiency. California's newly instituted television efficiency standard will save enough electricity to power 1 million homes for a year. The projected additional costs for consumers? Zero.
States are also empowering cities and counties to pursue energy self-reliance, with "property assessed clean energy" (PACE). PACE enabling legislation lets local governments use their bonding authority to give citizens full financing for substantial energy efficiency and renewable energy improvements on their property.
The costs of the improvements are covered via a loan that is paid back on the person's property taxes over a period up to 20 years.
The PACE approach has two key benefits. Because property owners are responsible for the entire loan, there's no general taxpayer liability and no impact on city budgets or county credit ratings. Additionally, the PACE loan removes the upfront costs of investing in renewable energy and efficiency, and the loan terms match the payback period of the improvements.
Whole house renovations can reduce energy consumption by 20 to 30 percent, or even turn energy consumers into energy producers with on-site geothermal or solar power.
Sixteen states have enacted PACE bonding authority for their communities, and the economic impact can be significant. In Boulder County, Colo., more than $10 million has been doled out to 282 local contractors. If every county in America had the same size program, it would inject more than $10 billion into the economy.
The five Midwest states with newly identified wind potential stand at a fork in the road. They can watch their livelihood spin away on a field of absentee-owned wind turbines, or they can act.
State policies to support local ownership can triple or quadruple the economic benefits of their wind resource. Energy efficiency standards can bring self-reliance closer and reduce consumer costs. And PACE programs can bring the energy home, putting the power of self-reliance in every community.
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John Farrell is a research associate with the Institute for Local Self-Reliance, which describes its mission as "to provide innovative strategies, working models and timely information to support environmentally sound and equitable community development."