Economic Impact of Wind and Solar Energy in Illinois and the Potential Impacts of Path to 100 Legislation
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Economic Impact of Wind and Solar Energy in Illinois and the Potential Impacts of Path to 100 Legislation December 2020 Strategic by David G. Loomis Strategic Economic Research, LLC S E R Economic strategiceconomic.com Research , LLC 815-905-2750 About the Author Dr. David G. Loomis Professor of Economics, Illinois State University Co-Founder of the Center for Renewable Energy President of Strategic Economic Research, LLC Dr. David G. Loomis is Professor of Economics Dr. Loomis has published over 25 peer-reviewed at Illinois State University and Co-Founder of the articles in leading energy policy and economics Center for Renewable Energy. He has over 10 years journals. He has raised and managed over $7 of experience in the renewable energy field and has million in grants and contracts from government, performed economic analyses at the county, region, corporate and foundation sources. Dr. Loomis state and national levels for utility-scale wind and received his Ph.D. in economics from Temple solar generation. He has served as a consultant for University in 1995. Apex Clean Energy, Clean Line Energy Partners, EDF Renewables, E.ON Climate and Renewables, Geronimo Energy, Invenergy, J-Power, the National Renewable Energy Laboratories, Ranger Power, State of Illinois, Tradewind, and others. He has testified on the economic impacts of energy projects before the Illinois Commerce Commission, Missouri Public Service Commission, Illinois Senate Energy and Environment Committee, the Wisconsin Public Service Commission, and numerous county boards. Dr. Loomis is a widely recognized expert and has been quoted in the Wall Street Journal, Forbes Magazine, Associated Press, and Chicago Tribune as well as appearing on CNN. Strategic S E R Economic Research , LLC Table of Contents I. Executive Summary ................................................................................ 1 II. Introduction............................................................................................. 3 III. Illinois Wind Industry Growth ............................................................. 4 IV. Illinois Solar Industry Growth .............................................................. 8 V. Economic Impact Methodology ............................................................ 10 A. Direct Impacts ........................................................................... 12 B. Indirect Impacts ......................................................................... 13 C. Induced Impacts ........................................................................ 14 D. Research Data ............................................................................ 15 VI. Economic Impact of Existing Wind Energy Projects ...................... 18 VII. Historical Property Tax Revenues ...................................................... 21 A. Background ................................................................................. 21 B. Data Collection .......................................................................... 22 C. Results ......................................................................................... 23 VIII. Future Economic Impacts Resulting from Path to 100 .................... 35 A. Assumptions ............................................................................... 35 B. Results ......................................................................................... 38 IX. Conclusion ............................................................................................. 45 X. References ................................................................................................ 46 Suggested Citation: Loomis, D. G., (2020). Economic Impact of Wind and Solar Energy in Illinois and the Potential Impacts of Path to 100 Legislation. Strategic Economic Research, LLC. The author gratefully acknowledges the American Wind Energy Association for their funding of this research and members of the Path to 100 Coalition and Power Up Illinois for research support. Power Up Illinois is an initiative of the American Wind Energy Association. Strategic S E R Economic Research , LLC Table of Contents - Figures Figure 3.1 – Annual Illinois Wind Capacity by Calendar Year .....................................................4 Figure 3.2 – Percentage Wind Capacity Installed by County in Illinois ......................................5 Figure 3.3 – Illinois Wind Turbines by Manufacturer Installed in Illinois ..................................6 Figure 3.4 – Percentage Ownership of Wind Farms in Illinois .....................................................7 Figure 4.1 – Solar Company Locations in Illinois ...........................................................................8 Figure 4.2 – Illinois Annual Solar Installations ...............................................................................9 Figure 5.1 – Map of Illinois Wind Farm Projects Larger than 50 MW ......................................17 Figure 6.1 – Economic Impacts from Illinois’ 39 Largest Wind Projects ..................................19 Figure 7.1 – Illinois Tax Revenue per Year .....................................................................................23 Figure 7.2 – Property Tax Revenue by Taxing Area ......................................................................24 Figure 7.3 – Tax Revenue by County ..............................................................................................25 Figure 7.4 – Tax Revenue by Jurisdiction by Year .........................................................................26 Figure 8.1 – Economic Impacts from Illinois’ Projected Solar & Wind Projects ................ 39-40 Figure 8.2 – Job Growth during Construction for Projected Wind and Solar Projects ...........41 Figure 8.3 – Job Growth during O&M Period for Projected Wind and Solar Projects ...........42 Figure 8.4 – Property Taxes from Projected Utility-Scale Wind and Solar Projects ................44 Strategic S E R Economic Research , LLC Table of Contents - Tables Table 5.1 – Illinois Wind Farm Projects Larger than 50 MW with Project Details .................... 16 Table 6.1 – Economic Impacts from Illinois’ 39 largest Wind Projects (5,865 MW) ................. 20 Table 7.1 – Illinois Tax Revenue per Year ......................................................................................... 23 Table 7.2 – Property Tax Revenue by Taxing Area.......................................................................... 24 Table 7.3 – Tax Revenue by County .................................................................................................. 25 Table 7.4 – Tax Revenue by Jurisdiction by Year ............................................................................. 27 Table 7.5 – County Tax Revenue by Year ................................................................................... 28-29 Table 7.6 – Top 50 Taxing Entities ............................................................................................... 30-34 Table 8.1 – Estimated Procurement of Renewable Energy Capacity ............................................ 35 Table 8.2 – Estimated Renewable Energy Construction ................................................................ 36 Table 8.3 – CAPEX Cost Assumptions 2020-2033 ($/kW) ........................................................... 37 Table 8.4 – O&M Cost Assumptions 2020-2033 ($/kW) ............................................................... 37 Table 8.5 – Economic Impacts from Illinois’ Projected Solar and Wind Projects ...................... 38 Strategic S E R Economic Research , LLC 1 I. Executive Summary Path to 100 Wind and Solar Project Property Taxes3 Building upon the efforts of the Future Energy Jobs As a result of legislation defining their valuation, Act (FEJA), the Path to 100 Act (HB 2966 / SB 1781) Illinois wind and solar energy projects are will provide adequate funding to meet existing significant contributors to the tax rolls of many policy requirements and establish stable policy for counties, townships and school districts. Based on continued job growth. The key items of the bill our analysis of historical property tax records in include expanding Illinois’ Renewable Portfolio every county that has an existing utility-scale wind Standard (RPS) from the current requirement of or solar project, we found that they paid: 25% renewable energy by 2025 to 40% by 2030, as well as ensuring that sufficient funding exists to • Over $306 million in total statewide since 2003 fully implement the Illinois RPS. According to this • Over $41.4 million in property taxes in 2019 analysis, by 2033, Path to 100 will result in: alone; and $49 million in all combined state and local taxes • 53,298 jobs created or supported during • Over $193.7 million to school districts; $38.9 construction periods1 million to county governments; $19.1 million • 3,215 jobs created or supported annually during to community colleges; and $15.9 million to fire operations districts • $8.27 billion in increased economic output2 • Over $53.0 million in McLean County; $30.9 during construction million in Lee County; $30.4 million in LaSalle • $571 million per year in increased economic County; $22.9 million in Henry County; and output during operations $21.5 million in Bureau County • Over $17.9 million to CUSD #19 Ridgeview School District; $8.4 million to CUSD #3 Tri Valley School District; $7.6 million to CUSD #5 in Normal, IL; $7.2 million to Unit #124 School District in Iroquois County; $7.1