Renewable Energy Brings Economic Boost to Rural Communities

A new NRDC report released today documents the impact of clean energy on the rural Midwest using employment data and case studies of the benefits of solar, wind, and energy efficiency projects. However, the figures and data only tell half the story (see topline findings here)—beyond job growth, renewable energy provides a slew of indirect economic benefits that are equally important to create thriving rural economies.

Wind energy brings revenue and new investments

Rural areas of the Midwest gained 2.2 gigawatts (GW) of new wind capacity in 2017. Those additions build on strong growth over the last decade to provide rural Midwesterners with revenue from lease payments, infrastructure improvements, and attractions for new investments.

Wind developers will often pay people to host wind turbines on their land, providing farmers and ranchers with a consistent source of income while allowing them to continue to farm. Throughout the country, wind farms provide $245 million every year in lease payments to farmers and ranchers for hosting wind turbines. Within the Midwest, rural landowners in Iowa, Illinois, and Kansas receive more than $10 million annually from wind leases. Farmers and ranchers in North Dakota, Minnesota, and Indiana receive between $5 million and $10 million.

NREL

Wind developers often pay landowners to host wind turbines, providing farmers and ranchers with a consistent source of additional income while still allowing them to use these lands for farming as well. Wind farms provide $245 million every year in lease payments to farmers and ranchers for hosting wind turbines. Within the Midwest, rural landowners in Iowa, Illinois, and Kansas receive more than $10 million annually from wind leases. Farmers and ranchers in North Dakota, Minnesota, and Indiana receive between $5 million and $10 million.

Wind energy projects also provide a new source of tax revenues for local governments, which can be invested into school districts and economic development projects. For example, in Colfax, Illinois, a town of 1,000 people, new wind projects increased the property tax base from $61 million in 2006 to $102 million in 2008. This new revenue allowed the local schools to fund new projects, pay off debt, and weather the 2008 recession.

Wind projects are also magnets for further investment. Businesses from around the country are flocking to the rural Midwest to build data centers and other facilities that will run on clean energy. Corporations drawn to an area because of cheap, clean electricity create local jobs and greater local economic activity. These new industries can also drive further tax revenue and infrastructure improvements.

Solar energy: improving access through community solar

Rural areas are also experiencing new growth in solar energy. Jobs in the solar industry make up more than 45 percent of the renewable energy jobs throughout the Midwest. Rural electric cooperatives (co-ops), which are utilities owned by their customers, have taken great strides to bring solar energy to more rural communities. Co-ops have especially taken advantage of one great avenue for expanding solar access: community solar programs.

Community solar programs allow participants to buy a share of a solar project and then benefit from the electricity generated. These projects bring solar energy to people who cannot or do not want to install their own rooftop solar panels. This can apply to homeowners who can’t afford the large up-front costs or have rooftops that are shaded or inconveniently oriented. It can also benefit those who don’t own their home and can’t alter their roofs. More and more rural areas are subscribing to community solar programs, with more than 190 co-ops offering community solar in 31 states. When designed properly, community solar programs can address many of the barriers that prevent households from adopting solar and, in doing so, can reduce electricity bills and lower household energy burden—which is especially high for rural families.

Dennis Schroeder

Solar energy projects are also enabling other economic benefits. For example, the Farmers Electric Cooperative in Kalona, Iowa, generates 15 percent of its power from solar energy and distributes 2.5 kilowatts (kW) per member. That’s more locally produced energy per customer than any other utility in the country has been able to achieve. The cooperative has also encouraged smart financial investments in the area. Farmers Electric bought nine acres of vacant land for a 1.7-MW solar farm. The original landowners then invested the income from the sale in a nearby facility for four new businesses. All four businesses now purchase electricity from the solar farm.

All in all, rural renewable energy projects are laying the foundation for a clean energy economy that meets the needs of local communities and provides clean and affordable energy throughout the region. It’s exciting to see the growth unfolding, and policymakers at all levels would do well to accelerate and guide the transition.

About the Authors

Arjun Krishnaswami

Policy Analyst, Climate & Clean Energy Program

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