Inflation Reduction Act’s Impact in a Top Renewable Energy State
TL/DR –
The Inflation Reduction Act (IRA) has boosted renewable energy development in the United States by offering billions of dollars of incentives and making renewable energy the same price as energy from burning fossil fuels. However, in Ohio, one of the states most hostile towards renewables, the IRA faces major challenges in overcoming fossil fuel-backed opposition groups and a harsh regulatory regime. Additionally, Ohio’s Senate Bill 52, which gives local governments the power to veto solar and wind farms, has added another layer of difficulty for renewable energy developers, adding to the challenges already present due to misinformation about solar energy and bias in favor of fossil fuels.
Solar Farms and Wind Turbines Struggle in Ohio Despite Federal Incentives
Solar farms and wind turbines are increasingly visible across America, supported by billions in incentives from the Inflation Reduction Act (IRA). However, in Ohio, a state known for its hostility towards renewables, developers face significant challenges.
In a historic shift, renewable energy in the U.S. is now equivalent in cost to traditional fossil fuels. The IRA, which represents the largest ever investment in U.S. climate change mitigation, has boosted tax credits for developers. However, solar advocates in Ohio are doubtful that this will overcome opposition from fossil fuel-backed groups spreading misinformation about solar and a strict regulatory regime.
Ohio’s Biased Energy Laws
Ohio has established a skewed playing field favoring fossil fuels, having redefined gas as “renewable” energy and passing Senate Bill 52, which grants local governments the power to block solar and wind projects. No such veto power exists for fossil fuel developments, causing developers to believe the bill is hampering solar projects in the state.
Moreover, opposition to renewables is growing across 41 states, resulting in close to 400 major local restrictions against wind, solar, and other projects, according to a 2024 report by the Sabin Center for Climate Change Law at Columbia Law School.
IRA’s Impact on Ohio
Despite Ohio’s stance on renewables, new solar construction in the state is projected to rank third among states by 2027. This is primarily due to comparatively cheap land, an adequate amount of sunlight, and an increasing demand from data centers.
The IRA, passed in 2022, aims to reduce greenhouse gas emissions by 40% compared to 2005 levels through $270 billion in tax incentives and $100 billion in other federal subsidies for climate and energy spending. In Ohio, the IRA has brought momentum to projects facing various obstacles such as siting hurdles, interconnection delays, supply chain uncertainty, tariffs, high interest rates, and inflation.
SB52’s Impact on Solar Projects
Despite the IRA’s positive impact, solar projects in Ohio still face significant obstacles due to SB52. The bill has granted counties new regulatory powers to veto individual projects and establish restricted areas where wind and solar projects are not allowed. Consequently, solar applications to the Ohio Power Siting Board decreased steeply in the year the bill was passed and have yet to rebound.
Fossil Fuel Groups Stoking Opposition
It has been suggested that opposition to solar projects in Ohio is being stoked by fossil fuel groups. Developers proposing the Frasier Solar project in Knox County are facing opposition from Knox Smart Development, a group linked to the gas industry. It is widely believed that such groups are trying to promote fossil fuels and oppose clean energy.
Efforts to mitigate climate change via the development of renewable energy sources in Ohio face both legislative and oppositional hurdles. While the IRA has brought certain benefits and momentum to the industry, the state’s stance on renewables and the influence of anti-renewable groups continue to cause significant challenges for developers.
—
Read More US Economic News