We Cannot Afford To Undo Economic And Environmental Progress In Ohio

EDF is working with Ohio elected officials, the small business community and other stakeholders on adopting an on-bill repayment (OBR) program in Ohio.  As a private capital solution to financing energy efficiency (EE) and renewable energy (RE) projects, OBR enables building owners to access low-cost capital, with repayment on their utility bills.  Small businesses in particular have trouble accessing affordable financing for energy projects, as it is hard for lenders to assess small to medium-sized business (SMB) credit risk and SMB properties are likely rentals that experience high turnover rates.  OBR provides lenders with significant credit enhancement, since the repayment obligation is tied to the utility meter and survives changes in rental and ownership.  At the same time, utilities and customers can benefit from a well-designed OBR program – one that compensates utilities for their services and allows utilities to receive credit toward state mandates for the OBR-enabled EE and RE investments.

As we at EDF endeavor to increase demand for clean energy projects in Ohio, other parties, including the American Legislative Exchange Council (ALEC), have proposed rollbacks to Ohio’s energy efficiency and renewable portfolio standards.  The standards were established by SB 221 in 2008, with bi-partisan support,– and there is a strong effort underway to defend them.  EDF is working with other Ohio clean energy stakeholders to keep the existing standards in place.  As we actively participate in this dialogue, EDF vigorously supports the State’s commitment to investing in clean energy – a commitment that has resulted in environmental and economic progress from which we cannot afford to undo.

EDF’s clean energy economic development series documented progress made in Ohio to date, which is extremely promising:

Stimulating Demand

The 1992 Energy Policy Act seeded demand for renewable energy and energy efficiency through tax credits and other programs.  In Ohio, two important state efforts in 1999 expanded on this federal support.

The Advanced Energy Fund, created by the Ohio Electric Restructuring Act, provided funding for energy efficiency and renewable energy projects.  The same bill introduced net metering, which allows homes and businesses that install alternative energy technology — solar, wind, biomass, hydro, etc. — to receive credit for the excess energy their systems generate.  Combined, these two efforts provided ways for individuals to reduce the cost of deploying "clean tech" or even turn it into a revenue generator.  

In 2008, Ohio amended the net metering policy to make it easier for people to participate and the state established an Alternative Energy Portfolio Standard specifying that a minimum of 25% of the state's energy will come from renewable or advanced energy sources by 2025.  Rather than including energy efficiency as a compliance option in the first Alternative Energy Standard, the state also passed an Energy Efficiency Resources Standard mandating 22% reduction in electricity sales by 25%.  (Both efforts passed with bipartisan support.)  In 2009, the Energy Conservation for Ohioans program established reduced rate financing for home energy efficiency or renewable projects.

Seeding Innovation

Between 2002 and 2007, Ohio pushed to meet that demand by promoting in-state technology innovation.  Ohio Third Frontier was established — a $2.3 billion economic development effort to promote technology innovation at Ohio-based companies, universities, research institutions and other organizations.  In 2012, the program was extended by voters to 2015.

In 2004, Stark State University opened the Fuel Cell Prototyping Center, a $4 million testing and commercialization center for fuel cell related companies.  And in 2007, a group of universities, community colleges and public and private research organizations formed the University Clean Energy Alliance of Ohio to develop clean energy curricula and career training programs.

Capturing Economic Development

The list of companies or economic development organizations in Ohio's clean energy sector is long and growing:  First Solar, Ohio Fuel Cell Coalition, Great Lakes Energy Development Task Force, Great lakes Wind Network, Ohio Energy Gateway Fund, Parker Hannifin, GrafTech, Isofoton and many others.

Few would argue that the list of success stories — or inspiring efforts — is complete or that Ohio has reaped every economic opportunity.  But, from 2008-2011, Ohio ranked 6th overall in advanced energy patents as patents in this space increased by 94%, with particular strengths in fuel cells, batteries and wind patents.  Beyond patents, Ohio now claims almost 10% of all manufacturing jobs related to fuel cells across the nation.  In the last decade, deals that infuse capital investment into the sector have grown from only a few in 2000 to 20 different types of deals in both 2011 and 2012.  In sum, the last few decades have shown — without a doubt — that the state's bi-partisan efforts to bring together public and private stakeholders to spark Ohio's clean energy industry is generating results and providing the region a chance to reinvent its economy and help lead the country into the clean, low-carbon energy future we need.

Next up, we'll look at Colorado.  Stay tuned.

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