Iowa’s potential to be the “Saudi Arabia of wind” is widely acknowledged, but the state’s capacity to harness solar power for producing electricity or thermal heating is a better-kept secret. A five-year program to install 300 megawatts of solar power could create nearly 5,000 jobs and add more than $332 million in value to Iowa’s economy, according to a new report commissioned by the Iowa Policy Project, the Iowa Environmental Council, Environmental Law and Policy Center and the Vote Solar Initiative.
After the jump I’ve posted the summary of the new report. Click here to download the full report (18-page pdf).
Iowa State University economist Dave Swenson (known to be cautious about calculating economic impacts) did the analysis for the report.
In his analysis, ISU’s Swenson estimated during the five years of installing 300 MW of solar the average annual impact would be:
• $174 million value added to the economy
• $302 million increased industrial output
• $99 million increased labor income.
Those numbers include sizable indirect effects – spinoff economic effects caused by the initial investment.
“Growth in the solar industry means direct jobs for more than just rooftop installers but also for electricians, builders, contractors, engineers, technicians, financiers, lawyers, marketers and salespeople,” the report stated.
Swenson’s estimate does not include new manufacturing jobs in the solar industry that might be created if Iowa adopted incentives to produce more solar power.
State Senator Joe Bolkcom has introduced a bill to spur more solar installation in Iowa:
Other states have jump-started the growth of solar panel manufacturers by providing tax credits to businesses and homeowners who buy from manufacturers in their states, Bolkcom said.
His proposal in Senate File 99 is not that specific, but it would provide up to $10 million in state-sponsored rebates to home-owners and businesses to help defray the cost of installing solar energy panels. The grants would cover 30 percent of the cost of installation, up to a maximum of $15,000 for farms and businesses and up to $3,000 for residences.
Later this month, the Iowa Policy Project’s David Osterberg is planning to take some state legislators on a tour of solar sites in Waterloo, Cedar Falls, Cedar Rapids and Iowa City. I hope to see bipartisan support for expanding solar power generation here.
So far, the main energy policy moving through the Iowa legislature during the 2011 session relates to nuclear power. In 2010, lawmakers approved a bill to allow MidAmerican Energy “to pass along up to $5 million per year in study expenses to customers for three years” as it studies potential locations for a new nuclear power plant. Now MidAmerican and utility industry groups are pushing “Construction Work in Progress” legislation that “would allow Iowa public utilities to charge ratepayers higher rates now to cover potential future costs of a yet to be constructed nuclear reactor, even if such a reactor is never built.” The Iowa House Commerce Committee unanimously approved one of the bills this week, and a companion bill has support in the Iowa Senate. Paul Deaton explains here and here why these bills are a bad idea. I recommend clicking through to read both posts, but here’s an excerpt:
The State of Georgia may build the first new nuclear plant in 30 years and adopted a CWIP [Construction Work in Progress] . Iowa legislators should study the impact the Georgia CWIP has on ratepayers. Other CWIPs were passed in South Carolina and Florida and they should also be studied. People familiar with the Georgia CWIP say Iowa’s proposed legislation shifts more risk to customers than does Georgia. There are other things to consider regarding CWIPs before the legislature passes one.
It boils down to this. If MidAmerican Energy builds a nuclear power generating station, for each billion dollars in costs, on average, $1,597 will be passed along to each of MidAmerican’s 626,223 Iowa retail customers. Are Iowa households ready for this? Are Iowa households ready to foot the bill knowing that a nuclear power generating station may never be built?
Nuclear power is expensive compared to other methods for generating electricity. It is “not viable” without huge government subsidies and “shifts financial risks to taxpayers.”
Iowa could expand solar power without passing along millions of dollars in costs to utility company customers. Hundreds of megawatts of solar power generating capacity could be brought online in Iowa over a few years, whereas a new nuclear plant would not be completed until 2020. Moreover, a nuclear plant would probably employ several hundred people in one locality. (Iowa’s only existing nuclear power plant employs roughly 500 people in the Palo area.) Ramping up Iowa’s solar capacity could create jobs for thousands of people spread out all over the state, wherever buildings are retrofitted to accommodate solar power.
Any comments about energy policy are welcome in this thread.
UPDATE: Today’s Des Moines Register contains an outstanding guest piece by Mark Cooper, senior fellow for economic analysis at Vermont Law School’s Institute for Energy and the Environment. Click through to read the whole thing. I’ve posted some excerpts below.