By Francis Hodsoll and Melody S. Gee
Melody S. Gee is a business and technical writer in St. Louis, MO.
Richmond-based Mangum Economics has just released an in-depth analysis of the the fiscal impact of utility-scale solar facilities over projects’ 35-year lifetime. The detailed report examines factors driving solar development and how Virginia localities are impacted.
The surge in solar interest is notably reflected in the rise in megawatt hours generated. According to the U.S. Energy Information Agency, solar facilities across the U.S. increased from 0.9 million megawatt hours in 2008 to 63.8 million megawatt hours in 2018. Virginia alone went from zero megawatt hours in 2015 to 0.8 million megawatt hours in 2018, and 16,605 megawatts of interconnection requests were filed across 54 Virginia localities between 2015 and 2018.
What’s driving this rise in solar? Mangum lists the following factors:
Production costs have dropped by more than half, according to the U.S. Energy Information Administration (EIA) estimates, and now solar production are even lower than some advanced carbon capture natural gas facilities.
Increased desire for clean and sustainable energy that reduces greenhouse emissions. In 2018, one-third of the reduction in coal produced electricity was attributed to increased renewable energy sources, with a net decline in carbon dioxide emissions of 25% in 2018.
Solar offers substantial fiscal benefits via capital investments and tax revenue, especially to rural communities facing declining populations, shrinking tax bases, and loss of labor force. These communities are especially hard hit because they see an increase in tax revenue—a situation indicative of struggling to maintain local services for a shrinking tax base.
Solar offers a high benefit-to-cost ratio, generating substantial local tax revenue on equipment and land assessment, while imposing relatively few costs on services, especially compared to agricultural, residential, and many industrial developments.
Solar aids business recruitment, with industry leaders (Facebook, Apple, Google, Amazon, Microsoft) having already committed to 100% renewable sources for their high energy needs and taking notice of attractive long-term solar purchasing agreements with stable pricing.
A rise in data centers which support 45,290 jobs in Virginia, along with $3.5 billion in labor income and $10.1 billion in state economic output. Spending on average $7.4 million each year on energy costs, data centers are leading the way on developing utility-scale renewable energy projects.
The numbers in the Mangum report make clear that solar in Virginia and across the U.S. serves as a major contributor to economic growth, while maintaining commitments to environmental stewardship and affordability. With ever increasing corporate commitments, new legislative agendas, and market trends, demand and need for solar will continue to grow and bring benefits to host communities.