Renewable Energy Law Changes Going Into 2017
Gov. John Kasich vetoed two bills at the end of 2016 addressing the future of energy in Ohio. The new laws of 2017 represent an opportunity for renewables to expand along with the growing energy market in Ohio.
House Bill Number 554
Since 2008 Ohio's traditional utilities as well as any other power company selling electricity have been required to include renewable energy sources as a percentage of the total generated power they sell. The law was written to increase the amount that comes from renewables at a yearly rate until 2026 to reach 12.5% [Figure 1]. The other goal is to generate 0.5% of the total power through solar power.
However, from 2014-2016 there was a freeze on the yearly increase. As a result, as indicated by the orange highlighted text in [Figure 1], renewable energy resources remained stagnant at 2.5% of total energy generation under state code. Any increases in renewables by utility companies during this time were encouraged but optional.
HB 554 was set to continue the freeze on minimum requirements for renewable power generation. Kasich’s decision to veto the proposed legislation highlights the desire for renewables to capture a significant portion of the energy market in Ohio.
Because of the veto, in 2017 there will be a 1% increase in renewable energy resource use, as a fraction of total power generated, as well as a 0.03% increase in solar. This puts Ohio back on track to reaching its goal of generating 12.5% of its power through renewables by 2026.
Kasich stated that the proposed bill “risks undermining progress by taking away some of those energy generation options, particularly the very options most prized by the companies poised to create many jobs in Ohio in the coming years, such as high technology firms.”
The governor’s statement on the veto ended by saying “…arbitrarily limiting Ohio’s energy generation options amounts to self-inflicted damage to both our state’s near- and long-term economic competitiveness. Therefore, this veto is in the public interest.”
Senate Bill 235
Another veto enacted by Kasich indirectly impacts the future of renewable energy by rejecting several provisions of the SB 235 legislation. The bill was put forth as a property tax exemption for the increased value of property development during the pre-development stage.
However, a notable provision tucked within the bill mandated an estimated $264 million sales-tax break for the oil and gas industry, further incentivizing fossil fuel dependence in Ohio. Kasich’s veto of the provision ensures state, local and transit authorities will continue being funded through the tax code.
In Kasich’s statement, he worried the provision "would result in a situation where oil and gas companies would be exempt from sales tax on almost everything they purchase. This new broadened exemption from the sales tax would create future annual revenue losses to the state, counties and transit authorities in the tens of millions of dollars."
How These Provisions Impact 2017
Now that the freeze on renewable energy requirements is over, utility companies will have to consider renewable energy infrastructure. This provides incentives for commercial as well as residential properties in Ohio to invest in renewable energies such as solar.
While fossil fuels still represent the majority of energy production in Ohio [Figure 2], increased free market incentives (such as cheaper and more efficient solar panels) puts solar energy as an established competitor in the market.
Likewise, legislation limiting tax advantages on fossil fuels indicates a change of direction in the energy market toward renewables. The continued growth and professionalization of solar has already expanded array installation in the state, with a mountain of potential for 2017 and consecutive years.
Better Together Solar is proud to be a leader in Ohio for the growth of renewables, investing in the diversification of the energy market and increasing competition for solar array installations. Early adopters of this growth will be adding to the state’s infrastructure, creating jobs and leading Ohio into the future of energy