Last June, Ohio became the first state to roll back the standards it had set for electric utilities to get power from renewable or alternative energy sources such as wind and solar. Lawmakers instead voted for a two-year freeze on those standards while they study their effect on utilities and ratepayers.
But a new report says that freeze has cost the industry dearly. Lynn Abramson is with the Pew Charitable Trusts’ Clean Energy Initiative. Abramson says in 2012, Ohio was a leader in both wind and solar installations.
“We saw that slip dramatically, and we’re seeing right now that over 2015 and 2016, there’s going to be either a bottoming out or at least a stall on the clean energy investment here in Ohio as a result of the freeze," Ambramson says.
National rank drops
Abramson says her research shows Ohio dropped from 12th in the nation in solar installations in 2012 to 20th the following year. And in one year, it went from 13th in the country in wind-project installations to the bottom of the list -- with no installations in 2013.
She points to discussions changing and even repealing the standards, which began more than a year before the law was passed, as a likely reason for the drops in growth in the clean energy industry in Ohio.
Jay Troger says he’s experienced this personally. He’s the CEO of Nextronex, a solar-manufacturing company in Holland, near Toledo. Troger says none of his project development is in Ohio right now, largely because solar projects are developed with a 20 year timeline.
“People make the investment and they’re looking at that 20-year cash flow to get their investment back. Well, if the legislators said we’re going to change the rules in two years, we can’t tell you how now – why would you make a 20-year bet?," Nextronex asks.
Comparing freeze to Apple
One of his clients has been Al Frasz of Dovetail Solar and Wind in Cleveland. He says big projects in municipalities and school districts have dried up, though he acknowledges home installations are still moving along. While he says he’s not opposed to the idea of a study of the impact of the energy standards, he says instituting a freeze while such a study is underway doesn’t make sense.
“It’d be like Apple Computer basically freezing all sales of iPads for two years while they study whether they’re profitable or not. It’s just absurd, and I think that right away showed the agenda that was already going on,” Frasz said.
The leader of the Legislature’s Republican opposition to the standards is Sen. Bill Seitz of Cincinnati. He declined an interview on tape, but released a statement addressing several of the report’s conclusions.
Seitz says the law eliminated the mandate for wind and solar because it was costly and unconstitutional. And he says a refocusing by Ohio businesses on wind and solar projects in other states has more to do with lower costs and the failure of clean-energy-based businesses, especially solar companies, than the freeze.
The statement from Seitz also says that the report is biased because it's based on sources such as the industry itself and the left-leaning blog Plunderbund.
He writes, “It nowhere examines the cost of compliance with the mandates, nor does it demonstrate the least bit of effort to seek the views of Ohio’s core industries, for whom the spiraling cost of compliance threatens job losses for a much higher number of people than the renewable energy sector employs in Ohio."
Seitz concludes, “It is a fool’s errand to examine only the benefits of the state mandates without also examining their cost.”
The law requires lawmakers to take some action after the two-year study is done, or the standards go back into effect.