Inflation Reduction Act’s Impact on ‘Most Biased’ Renewable State
TL/DR –
The Inflation Reduction Act (IRA), a US climate law that provides billions of dollars in incentives to renewable energy, is facing opposition in Ohio, one of the most hostile states for renewables. Major hurdles include a regulatory system that favours fossil fuels, as well as Senate Bill 52 which allows local governments to veto renewable energy projects. Despite these obstacles, Ohio is set to rank third among states for new solar construction by 2027, and the IRA is expected to reduce greenhouse gas emissions by 40% compared to 2005 levels, largely through $270 billion in tax incentives and $100 billion in federal subsidies for climate and energy spending.
Renewable Energy Encounters Resistance in Ohio Despite New Climate Law
As new climate laws stimulate the economics of renewables, solar farms and wind turbines are sprouting across America. Yet, developers in Ohio, known for its hostility towards renewables, are navigating a precarious situation.
Renewable energy in the United States is now equally priced with energy from burning fossil fuels, thanks to the Inflation Reduction Act (IRA), which provides significant tax credits. However, solar advocates and Ohio-based developers remain skeptical that the IRA can overcome the hurdles posed by fossil fuel-backed opposition groups spreading misinformation about solar and a stringent regulatory regime.
“Ohio’s treatment of renewables is heavily biased,” says Dave Anderson, a representative of the Energy and Policy Institute. The state favors fossil fuels, even rebranding gas as a “renewable” energy source and passing a law that allows local governments to veto solar and wind farms, a power not extended to fossil fuel projects.
IRA’s Impact on Ohio
Despite regulatory challenges, new solar construction in Ohio is predicted to surge to third place among the states by 2027. The IRA, enacted in 2022, aims to reduce greenhouse gas emissions by 40% compared to 2005 levels, primarily through investing $270 billion in tax incentives and $100 billion in federal subsidies for climate and energy spending. This legislation is creating momentum for solar projects and driving down costs.
Challenges Posed by SB52
Yet, despite the IRA’s positive impact, solar development in Ohio also contends with the SB52 law. The law, passed in 2021, grants counties the power to veto individual solar and wind projects and create restricted areas where these projects are prohibited. SB52’s restrictive effects are already manifesting, with solar applications to the Ohio Power Siting Board sharply decreasing the year it was enacted.
Fossil Fuel Groups Fueling Opposition
Several solar projects in Ohio are facing opposition allegedly linked to fossil fuel interests. For instance, the Birch Solar project by Lightsource BP faced significant resistance, culminating in it being the first large solar project rejected by the Ohio Power Siting Board. The opposition campaign against Birch Solar involved creating a Facebook group, establishing an LLC, and launching a GoFundMe to raise funds to fight the project.
Another example is the Frasier Solar project, which is encountering opposition from Knox Smart Development, a group linked to Ariel Corp., a major player in the gas industry, and the Empowerment Alliance, an anti-renewable dark-money group allied with the gas industry.
Despite these challenges, some developers believe that the IRA could still sway public opinion in favor of clean energy. “The IRA will result in a significant amount of economic development and jobs in Ohio, which will shift the political tide in favor of the clean energy industry,” says Nolan Rutschilling of the Ohio Environmental Council.
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