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According to a new report, companies looking for easy access to renewable energy should consider moving to Iowa.
That state, followed by Illinois, topped a ranking released Tuesday by the nation’s retail and tech sectors urging state governments to lower barriers to the further development of renewable energy. Ohio came in 8th.
The report, assembled by Clean Edge on behalf of the Retail Industry Leaders Association and the Information Technology Industry Council, comes just as state legislatures across the country are convening for their 2017 sessions. The report was quite clear about its intentions: to urge changes in state laws and regulations regarding renewable energy, and especially corporate access to it.
The report set out the following five-point action plan for state governments:
- Remove barriers to corporate deployment of both onsite and offsite renewable installations.
- Support the development of next-generation options to purchase renewable energy through utilities in regulated markets
- Expand energy choice options for (commercial and industrial) customers in regulated markets.
- Ensure that an adequate market exists for renewable purchasing through both utilities and third-party programs.
- Ensure that (renewable energy) in both regulated and deregulated markets can scale up rapidly
“Renewables are becoming more and more important for the retail and tech industries,” said Erin Hiatt, the senior manager of energy and sustainability for the Retail Industry Leaders Association. “More of our members are exploring their options. It used to be just some big-box stores that were looking at installing rooftop solar panels. But procurement is getting to where it’s more strategic, and there can be financial benefits.”
At the top of many retailers’ renewable-energy wish lists, she said, is the option of obtaining clean energy through a power-purchase agreement (PPA) with a third party.
“It’s really a lower-cost option that I know a lot of retail companies are looking at,” she said. “They can form a relationship with a third party at little or no cost, but they still have the installation site, with visibility there.”
According to the report, “Fewer than half the states have clearly stated that third-party PPAs for distributed generation are allowed. States would do well to make on-site third-party PPAs 100 percent legal if they are interested in capturing the economic development benefits that third-party DG ownership could bring.”
In Missouri, where the report says PPAs have “uncertain legal status,” a bill was introduced just a week ago to legalize that arrangement.
The report’s authors ranked the states on the basis of three broad categories: utility purchasing options, third-party purchasing options and onsite-direct deployment options. Iowa ranked first in the utility purchasing category, in large part because of the 548 megawatts Google and Facebook have purchased from MidAmerican Energy, a large utility that has made huge investments in wind farms across Iowa.
The report highlights some more unusual arrangements in which utilities have devised innovative structures for providing renewable energy to corporate customers, as when Ikea worked with Apex Clean Energy to fund 263 MW of wind turbines in Illinois and Texas. The facilities are fully owned by Ikea but were constructed and are managed by Apex.
The second category is policies allowing or incentivizing third party purchasing or leasing. Policies regarding community solar were included in this group.
The third is policies affecting on-site direct deployment of renewables. This category includes policies on interconnection standards, net metering and the fixed charges imposed on distributed-generation customers.
Overall, the report illustrates significant state-to-state differences in the policy environment towards corporations’ access to the renewable energy that so many have made a high priority in recent years. While it is focused on policy, the report’s authors pointed out that states can satisfy the burgeoning corporate appetite for renewable power if their utilities simply choose to invest in large amounts of renewable power – as is the case in Iowa.