The Pew Charitable Trusts recently reported, with regret, that investment in Ohio’s renewable energy industry fell from $750 million in 2012 to $100 million in 2013. But as The Buckeye Institute’s new report explains, ending the renewable energy mandates will only prove to help Ohio’s families and strengthen the economy.
Pew fears that so much lost investment could cost the state thousands of jobs and even wipe out the fledgling Ohio renewable energy sector, spelling disaster for the Buckeye State’s economic future. Their report points the finger for these woes at Senate Bill 310, a state law that temporarily suspended previous government mandates that forced utilities and electricity retailers to use renewable energy and implement energy efficiency measures.
Pew’s comparison of 2012 to 2013 investment is fundamentally unsound. 2012 investment was likely driven to artificially high levels by federal renewable electricity production tax credit policy, which incentivized renewable energy companies to begin projects before December 31, 2012. Pew is wrong to conflate the effects of federal tax policy and state energy policy.
But regardless of where the blame lies, SB 310 is a smart policy move for four reasons.
- It reduces crony capitalism that favors the owners and employees of renewable energy companies at the expense of other Ohioans.
- Any conspicuous harm to the jobs and renewable energy investment with which Pew is concerned masks other unseen benefits for the rest of Ohio’s economy.
- Eliminating the renewable energy standards will help the bottom line for all Ohioans by lowering energy bills.
- Forcing renewable energy companies to compete without subsidies will make them stronger in the long run.
Testimony by Peggy Claytor of The Timken Company illustrates the significant harm of these mandates on Ohio companies:
Consumers don’t need costly portfolio mandates to do what makes good business sense. Make no mistake about it: Ohio’s current mandates are costly. They are particularly costly for large energy users…Together, the portfolio mandates will cost Timken in excess of $2 million this year alone.
Such exorbitant compliance costs prevent such companies from focusing on growing their businesses, giving existing employees better pay and benefits, and creating new jobs. Scrapping these ill-conceived mandates, along with the unnecessary costs they impose on businesses and consumers, is a vital step forward for all Ohioans.