The Economics of Solar Development in Ohio

By Grayson Penland and Brent Sohngen

This report examines a number of economic aspects of solar development in Ohio. Here is a summary of the findings. A PDF of the report can be downloaded here.

• Solar energy constitutes about 1.4% of electricity production in Ohio, but this number is set to grow to 10% in the next decade as many new facilities are either being built or in the planning stages.
• The growth of solar is driven by increasing demand for renewable energy by consumers, businesses, and communities, falling costs, and federal subsidies.
• Solar renewable energy credits, or SRECS, are bought and sold in separate markets from electricity and provide solar energy a higher price than traditional fossil electricity simply because some people want to consume their electricity knowing it is produced with lower environmental impact.
• Federal subsidies have a large impact on the returns to solar, lowering costs of production, and increasing the overall private investment.
• The value of land in solar electricity production is at least ten times greater than the value of the same land used for typical crop production in Ohio.
• Solar energy will not increase jobs in rural Ohio, but by providing renewable energy, could spur new job creation by businesses that locate here because of access to low-cost renewable energy.
• Local tax revenues in rural areas with solar development should increase substantially in the coming years.

If you have questions or comments, please do not hesitate to contact Grayson or Brent.