Renewable Energy Generates Billions for Rural America

A report published last week by Bloomberg New Energy Finance (BNEF), an investment research arm of Bloomberg news service, highlights a principle that 25x’25 has been preaching since its origins in 2004: Renewable energy offers farmers, ranchers, forestland owners and rural communities huge income opportunities.

Focusing principally on wind energy, the BNEF analysis says more than $100 billion has been invested by companies in low-income counties, where some 70 percent of the nation’s wind farms are located. Alex Morgan, North American wind energy analyst at BNEF, says that by 2030, rural landowners will receive up to $900 million a year from wind developers for land leases.

The projections from BNEF build off of data released earlier this year by the American Wind Energy Association (AWEA). The data showed U.S. wind farms currently pay more than $220 million a year to farming families and other rural landowners, and more than $156 million of that is going to landowners in counties with below-average incomes. Those lease payments range from $3,000 to $6,000 per megawatt of installed capacity, along with payments for power line easements, road rights-of-way, or royalties based on the project’s annual revenues.

These payments not only better the lives of farmers, ranchers and forestland owners – in some cases, says AWEA, they allow producers to keep their family farms, giving owners the chance to pass their operations on to the next generation – they also help boost local tax revenues that allow rural counties to renovate roads, build schools and update infrastructure, as well as pay down debt. An Oklahoma State Chamber analysis released last year shows that owners of wind farms will pay some $1 billion in ad valorem taxes over the projects’ 40-year life span.

The solar energy sector also makes massive financial contributions to rural landowners and the counties and states where solar farms are being located. Through June of this year, solar has reached 31.6 gigawatts (GW) of total installed capacity. With more than 1.1 million residential solar installations nationwide and utility-scale solar facilities in the construction pipeline totaling more than 20 GW, the industry is on pace to nearly double in size over 2016.

These solar facilities, including a number being built by an array of electric cooperatives around the country, are pumping more than $15 billion a year into the U.S. economy. The North Carolina Sustainable Energy Association says that landowners in that state are leasing sites for solar farms for $300 to $700 an acre per year, three times the average rent for cropland and pastureland.

The biogas industry is a renewable energy sector that is only beginning to make an economic impact in rural America. The American Biogas Council (ABC) says that as more biogas systems are built, many sectors of our nation’s economy will be strengthened, including agriculture and renewable power. Later this month, ABC will recognize biogas projects and technology advancements from across the country for their innovation and potential for replication during their 16th annual conference.

Citing a recent study by the Innovation Center for U.S. Dairy, ABC says the dairy sector alone could create $3 billion in products from biogas/anaerobic digestion systems. Biogas industry experts say building 11,000 new systems would result in at least $33 billion in capital expenditures for construction activity, generating approximately 275,000 short-term construction jobs and 18,000 permanent jobs to run the digesters.

Meanwhile, as one of four pillars USDA has identified to boost the country’s rural economy, the department has invested heavily in growing the biobased economy. USDA has been working closely with farmers and ranchers to make investments that spur a new generation of renewable fuels and biobased products. A new USDA report released last week shows that in 2014, the biobased products industry contributed $393 billion and 4.2 million jobs to America’s recovering economy. The report also indicates that the sector grew from 2013 to 2014, creating or supporting an additional 220,000 jobs and $24 billion over that period.

It is worth noting the job creation that is generated by renewable energy development, especially in rural areas. A study released earlier this year by Environmental Entrepreneurs, a clean energy advocacy group of business executives, shows nearly 414,000 people work in the sector, many in rural areas.

As we often remind policy makers, the 25x’25 Vision – by 2025, America’s farms, ranches and forestlands will meet 25 percent of our nation’s energy needs through renewable resources – brings with it vast environmental and energy security benefits. The third takeaway from the vision is the enormous range of economic returns it offers, not only to consumers who pay less for cleaner, domestically produced power and fuels, but also to rural America where energy innovation is being nurtured.

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